As people who know me well will tell you, I’ve always been something of an idealist, daydreaming about some abstract political philosophy whilst everyone else deals with more pragmatic concerns – or ‘living in the real world’ as I believe it’s known. I make this point as what I’m about to write alludes to an apparent confluence – potentially at least – of strands of abstract political thought and practical everyday policy that I believe should gain prominence as the general election approaches.
First of all let’s deal with the practicalities (unusual for me but there you go…). Earlier this month Norman Lamb MP launched The NHS: A Liberal Blueprint, a Lib Dem policy briefing on the future of the NHS. Accompanying the launch of this paper was an article in the Guardian, detailing not only the specific policies but the overarching principles guiding them. There is a great deal to applaud in both, not least the recognition that large-scale and indiscriminate slashing of the health budget would lead to cuts in ‘public health programmes and mental health services, hitting the most vulnerable the hardest.’ Another welcome note was the way in which local democratic control over health services would make practitioners and service providers accountable to those using their services – a model that could well be applied to many public services, including utilities and transport.
The majority of both the policy briefing and the Guardian article focus on the fact that despite record government investment in the NHS, far too much goes to waste before reaching the coal face. Allow me to quote verbatim from the introductory paragraph to the policy paper:
A lot of money has been invested in health in recent years but too much of that has been wasted on bureaucracy rather than investing in frontline services. Doctors and nurses are forced to spend too much time trying to meet government targets rather than caring for patients. And government ministers make decisions about closing local services from the comfort of their offices rather than facing the people it affects.
It’s worth emphasising that every word in this paragraph is true – despite the deployment of mountains of cash, far too little of it is being used for frontline clinical services. And yes, top-down targets and paperwork do impinge on healthcare professionals’ ability to care for their patients. In fact the policy briefing goes on to discuss how unaccountable Strategic Health Authorities would be abolished, as an example of tackling the bureaucracy – a good thing, arguments over how the NHS’ vital population-level health planning role would function aside. So I don’t have a problem with what’s in the paper as much as with what isn’t – if we accept that the large sums of money thrown at healthcare are not being used effectively, what is the hulking great elephant in the room we’re ignoring?
Norman himself gave us all the answer as it happens, in the form of a strong press release just a few days later. Detailing the enormous burden that the Private Finance Initiative has left the NHS with, this press release was picked up by a few media outlets including London’s freesheet Metro, which said that the NHS was liable for paying £63bn for PFI projects ‘worth only £11bn.’ Now at this point I want to make clear that this isn’t some ideologically dogmatic rant against private involvement in the provision of healthcare. For reasons I won’t go into – some of you may be eating as you read this – I had to have an endoscopy this morning, and to speed up the process I was seen by a private hospital in Hertfordshire. Whilst my personal experience was pleasant and efficient, I was left wondering how much more this approach had cost the taxpayer. Allyson Pollock, author of NHS plc, may well know, much as she knows the impact PFI bills are having on frontline services across the health service.
As an alternative to the disastrous PFI, Norman’s press release mentions setting up an infrastructure bank to ensure high levels of investment whilst retaining the fairness and accountability that comes with public-sector service provision. This is worth reiterating – the Liberal Democrats are proposing to create an infrastructure bank, to give us an alternative funding model to the PFI which threatens to cripple schools and hospitals with unaffordable repayments. And yet, throughout the policy briefing and the accompanying article, there’s no mention whatsoever of what to my mind could be the single greatest factor in preventing the effective delivery of healthcare in this country – the insistence that PFI and private, for-profit providers become more and more integral to the ethos of the NHS.
In many ways the policy paper provides a strong, liberal model for how healthcare can be effectively delivered – locally accountable, flexible and with high levels of excellence for all. And yet I feel that we may have missed a trick as a party with the general election coming up – here is a policy that truly differentiates our plans for the NHS from the other parties, that puts fair funding at the heart of a fairer service – but no mention of it in the policy briefing, nor, disappointingly, of healthcare reform at all the draft agenda for the imminent spring conference. As far as this policy paper goes, then, it does well – trouble is, it just doesn’t go far enough.
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8 Comments
I’m curious about the figures in the press release. I do wonder if there was any analysis of the bald figures to establish how much of the 63Bn was the capital element of the service delivery, how much is for the services, that would have to be paid for anyway, and how much is the cost of funding. Unfortunately given that Cowley Street don’t seem to add any value to the responses that they get from FOI requests.
There are fairly significant questions to be answered about revenue funding across the public sector, and the accounting treatment of PFI investment, Mr Lambs interventions don’t really get close to scratching the surface.
I would observe that these contracts are rarely exploited by those responsible for doing so on the public sector side of the relationship. some smart commercial practice would help drive down the costs and improve value for money. Of course nobody ever mentions where that is happening.
@Meandering Mammal: I agree that a further breakdown of the £63bn would have been useful, although extensive research by others has shown that a large proportion of the ‘extra’ spending on the NHS in the last ten years or so has gone to costs other than those associated with service delivery – i.e consultancy fees, lawyers fees and PFI maintenance.
Not sure I follow your last paragraph though. Are you suggesting that commercial providers of services drive down costs and provide value for money? Evidence to date is that in protecting their bottom line, services are in fact cut – thereby reducing the quality/quantity of service. Not in all cases by any stretch I acknowledge, but certainly this happens. So in introducing ‘smart commercial practice,’ if there is no obligation on the provider to maintain levels of service, cost-cutting and all that follows is inevitable…
I assume by ”PFI maintenance” you mean servicing the cost of finance rather than the ”services” component of the PFI deal?
With respect to the other elements, in procuring any service then there is a need for procurement expertise and legal assistance, so the consultancy and legal fees aren’t going to disappear if the service is delivered in another way. We could take the view that the public sector should have its own cadre of procurement specialists who could do that, but to be perfectly honest the public sector doesn’t pay enough to keep good people and procurement isn’t a career stream in the CS that leads to the top of the tree. As a result of that there is a need for outside support, from a cultural perspective that also gives a low risk scapegoat.
If you want to build a hospital are you going to trust a doctor to go out and negotiate and write the contract to build it, manage the project to deliver it, inhabit it,establish where demand is for various services within that hospital? In much the same way that I wouldn’t wan’t an architect fishing about inside me during surgery it’s a question of getting the right people to do the things that they’re skilled in. A lot of that money is going to end up needing spent anyway.
My latter point was about public sector contract managers. Once these contracts are in place they need someone looking after them from the client side; assuring standards of service delivery are adhered to, running the benchmarking exercise that are in the contracts but rarely conducted, managing the client to minimise the need for variations, and then negotiating variations where they’re required.
In my experience these things don’t happen, so the suppliers are allowed to run things. Standards are allowed to slip and the service recipient, whether helth service user or school pupil, suffers as a result.
fwiw I see a lot of the programme benefits of PFI as having disappeared following the recent changes to accounting treatments, however there remain a number of operational benefits that should leave it as an option, but that’s dependent on having people who actively participate in delivery, not turn the handle and present the cheques to the Finance Director once a month for signature.
I can believe that PFI is a mess and that we ought to be able to find something better. But what is this “infrastructure bank” of which you speak, and how can you convince me, preferably in bite-size slogans, that it is the Holy Grail we are looking for?
Apologies, short on time – will try my best!
@MM: I agree that even in the case of the delivery of a public good, procurement needs expertise, but if unaccountable outside agencies are responsible for procurement decisions are they not more likely to take their own bottom line into account more than public benefit? Now I have absolutely no objection to private firms doing the procurement/management side of things (and not I wouldn’t like to have a doctor decide these things), provided there was some accountability – here the ‘assuring standards of delivery’ you speak of is what’s vital, and the client-side enforcement is what’s missing – and what leads to enormous bills for very little on the ground IMHO.
@David Allen: an infrastructure bank would be set up along the lines of the European Investment Bank, which is a publicly-owned policy-driven bank whose major shareholders are European govts. Private equity firms, anyone with money, could gain a return on their capital through such an institution, whilst the public sector retains control over how things are built/run.
Let me be clear, such an infrastructure bank is not a Holy Grail. It simply allows the public sector to tap into some of the vast sums of money in the markets without relinquishing the reigns of how public services are delivered. I hope that helps…!
In practice any procurement programme should have a Senior Responsible Owner, someone in the client organisation who takes responsibility for the delivery and the decision making. It’s wholly inappropriate for a service provider to be making the decisions, just advising on the benefits, risks and issues around the various options available. Leadership, or the lack of it, is always the public sector responsibility.
Accountability is always enabled through a contract, or more likely a series of contracts. For a large PFI procurement it would probably be run in several stages, re-letting for service at each stage, although generally an incumbent would have a degree of advantage in later stages. Clearly different advisory service providers are going to take different approaches to how that service is delivered, some will drive as much cash out of the individual contract, others will work to drive their profit over the longer term relationship. I’m not going to pretend that some aren’t applying some pretty sharp practices, but we end up back in the ”contract management” debate.
In my experience public sector clients are all too ready to accept lower standards than that contracted for in the interests of pleasant relationships. From a legal perspective the contract resets if the CM doesn’t enforce it on a regular basis. I’ve found myself out of step with others for demanding a compliant delivery.
The mechanisms are all available, they’re not used well.
With respect to an infrastructure bank, I’d be surprised if private sector investors would be prepared to hand over significant amounts of capital to the public sector to use without a fair degree of control over how it’s used. But there is already an organisation that has some similarities, essentially a 49%/ 51% Public Private Partnership that does the commercials for PFIs and PPPs. The private sector backers are predominantly large banks. Private Equity and Venture Capital are unlikely to be interested as the return on investment period is too long. One PFI I was involved in required the private sector service provider to plan for a five year interval until they broke even, never mind made a profit. I don’t know the detail of the accounting treatment so I’m not sure if that included cost of financing.
I have worked in the NHS for almost 30 years, big changes occured during the Thatcher years with the development of the internal market and the formation of trusts and the”purchaser provider split” which served no purpose other than to ease the way to privatising services or having some kind of insurance funded NHS. This is what led to a massive increase in beurocracy and a bizzare internal accountancy system.
Succesive governments, instead of scrapping this system have continued to add to it. The NHS is now like Marx brothers humour; “logic built on an illogical base”. In this respect it can only become sillier and sillier as well as costing more. What we need is a fundamental rethink of the NHS: What do we want from it? What are people prepared to pay for it? What can’t we provide? I believe that we shoukld adopt a utilitarian ethic by looking at what the NHS could do to provide the most good for the most number of people. A utilitarian approach may mean that some people miss out on expensive life saving treatments and that might be a bitter pill to swallow and very politically sensitive. Unfortunately we need to address this so that the majority of people can benefit. We need to focus on what has the most benefit to society as a whole, this means renewed focuss on public health issues, vaccination programmes and dental health which probably have the most benefit.
The benefits may mean that at last we start taking responsibility for our own health by watching our diets, watching what we drink and stopping smoking when we know the safety net is no longer there. If people want to spend money on limited extension to life through expensive drug treatments or surgery or on cosmetic surgery etc then they can pay into insurance schemes to fund these. Perhaps savings could be spent on helping the third world where small amounts spent on help can have much greater benefits for more people or be used to pay off the national debt.
We have got to a point of diminishing returns within the health service and should accept a point has come where perhaps small improvements to the health of small numbers of people at greatly increasing cost cannot or should not be afforded.
For all the billions poured in by Labour I don’t think we’ve seen value for money to be honest. You’ve got any Conservative politician so scared of making any changes to the NHS that could be seen as ‘radical’ that they can only make these tiny little changes that are, for the most part, not changes at all. Meanwhile Britain plods along with the 14th ranked health system (out of 33 European countries). How can it be that the 3rd largest economy in Europe has the only 14th best health system? Although the UK has always been the world leader in IVF treatment, we go for treatment overseas. Den Campbell, an article in the Guardian: “Thousands of women leaving UK for fertility treatment abroad”
How are we happy with that?