Public Accounts Committee

0:00:26 > 0:00:31Welcome to the Public Accounts Committee on Monday the 5th of March

0:00:31 > 0:00:352018. We are here today to look at the sustainability and

0:00:35 > 0:00:39transformation in the NHS on the back of a National Audit Office

0:00:39 > 0:00:43report on the subject. This is a subject we return to perennially as

0:00:43 > 0:00:47a committee sadly and last year we were very critical of the short-term

0:00:47 > 0:00:53measures used to balance the NHS budget. And last year, that was when

0:00:53 > 0:00:57the trust sector reported a deficit of nearly 800 million and

0:00:57 > 0:01:00forecasting a deficit of over 900 million this year so the system

0:01:00 > 0:01:04still has a long way to go before it is sustainable. As the Olivia

0:01:04 > 0:01:09highlights and we have Cedric before, the NHS is focused still on

0:01:09 > 0:01:13survival with growing demand but it's not the case with that and the

0:01:13 > 0:01:18transformation funding schemes cropping up the system rather than

0:01:18 > 0:01:22doing the transformation it was intended for, and in that system,

0:01:22 > 0:01:27there are clear winners and losers as the waiter but it is formulated.

0:01:27 > 0:01:30We have spent time talking to finance directors or working with

0:01:30 > 0:01:34colleagues around the House to do that and two concerns from the

0:01:34 > 0:01:38trusts was the issue around stuffing. And the concern that they

0:01:38 > 0:01:44are getting mixed messages from the top. So we will probe some of that

0:01:44 > 0:01:48today. I want to introduce our witnesses. From my left-to-right,

0:01:48 > 0:01:52David Williams, Director-General of finance at the Department of Health

0:01:52 > 0:01:56and Social Care Act. The permanent Secretary at the Department of

0:01:56 > 0:02:00Health and social care. Simon Stevens, Chief Executive of NHS

0:02:00 > 0:02:04England, not yet of social care. I'm sure that will come! And Ian Dalton,

0:02:04 > 0:02:10the new Chief Executive of NHS improvement replacing Jim Mackie,

0:02:10 > 0:02:15who retired last Christmas. It is your first hearing since Christmas?

0:02:15 > 0:02:25Welcome. Before we get into the main session, and wanted to ask both the

0:02:25 > 0:02:27permanent Secretary and Simon Stevens about the NHS winter crisis

0:02:27 > 0:02:33funding provided to trusts who bid for it and met certain criteria last

0:02:33 > 0:02:40year. And our reckoning, in about November, it will arrive, and have

0:02:40 > 0:02:47you any indication of how that is being spent? I want to know how that

0:02:47 > 0:02:53is being spent and where it has been spent and how you are monitoring

0:02:53 > 0:02:59that from a central level?David Williams first. I can set out how

0:02:59 > 0:03:06the funding was allocated and planned to be spent. And then you

0:03:06 > 0:03:13may want to hear from NHS colleagues how in practice it is being deployed

0:03:13 > 0:03:19into the system. So the Chancellor announced 337 million pounds of

0:03:19 > 0:03:27additional funding at the budget in Artur Mas chair. £150 million that

0:03:27 > 0:03:33has flowed straight through to providers to cover costs and

0:03:33 > 0:03:43pressures which they had already incurred or been forecasting. 137

0:03:43 > 0:03:50million was put into the system to buy additional capacity. Some of

0:03:50 > 0:03:58that around additional beds in the acute trust. Some for increased

0:03:58 > 0:04:03access, particularly over the Christmas holiday period to GPs, as

0:04:03 > 0:04:10well as resources for mental health services, ambulance trusts and NHS

0:04:10 > 0:04:17111 services. We retained essentially £50 million of that

0:04:17 > 0:04:28additional money against the point where winter was over. Which is a

0:04:28 > 0:04:33point we have not yet reached! And we are currently in discussion about

0:04:33 > 0:04:40how best to release that.So that money is for this financial years,

0:04:40 > 0:04:45so winter has to be over by the 31st of March?We hoped there might be

0:04:45 > 0:04:49some opportunity for investment towards the end of February and

0:04:49 > 0:04:55March into elective care but in practice, the continuing high levels

0:04:55 > 0:05:00of flu and the bad weather that we have been having means that we

0:05:00 > 0:05:07focused more heavily on A&E performance.Sorry, so the money,

0:05:07 > 0:05:10the 50 million you have held back century, it has to be spent by the

0:05:10 > 0:05:1631st of March? As you are the finance Director, you might not want

0:05:16 > 0:05:20it spent.It has been voted the department through supplementary

0:05:20 > 0:05:25Estimates and we have put it into the mandate. So there is no question

0:05:25 > 0:05:28about whether there is anything sensible we can do with it over the

0:05:28 > 0:05:34next four weeks. Or whether it is simply a relief to the bottom line.

0:05:34 > 0:05:37Simon Stevens, from your perspective, has been money been

0:05:37 > 0:05:42spent well and have you kept track of it?It has been allocated in the

0:05:42 > 0:05:47way David described. Short notice. To trusts and a small amount to

0:05:47 > 0:05:50macro 3 and for the first time in terms of winter funding, mental

0:05:50 > 0:05:56health trusts also reserve that received funding -- and a small

0:05:56 > 0:06:01amount to GPs. To help the winter crisis and A&E departments. That has

0:06:01 > 0:06:07collectively helped the NHS perform under demanding circumstances over

0:06:07 > 0:06:12the December and January period. The key fact to have in your mind is

0:06:12 > 0:06:19that we looked after at one people within the four-hour A&E target in

0:06:19 > 0:06:22December and January this year than we did December and January the year

0:06:22 > 0:06:26before.Given the money arrived quite late into the trust covers and

0:06:26 > 0:06:31there is still money not yet spent with four weeks to go, is there not

0:06:31 > 0:06:35a risk it gets spent on short-term expense of options by Kylie paid

0:06:35 > 0:06:39locums if you can find them, although the evidence from finance

0:06:39 > 0:06:45is hard to find stuff even if you have the money, is it not better to

0:06:45 > 0:06:50look at this in a more long term sustainable way?Yes, ideally, you

0:06:50 > 0:06:55allocate money very early for the reasons you say. In this case, as I

0:06:55 > 0:06:58think I may have said to the committee before, what we were

0:06:58 > 0:07:06investing in was the NHS existing plan for winter. A lot of what David

0:07:06 > 0:07:12has described were plans that were already there in the system that we

0:07:12 > 0:07:19were back funding through money that people had already spent.Let me be

0:07:19 > 0:07:22clear, plans, but without the funding attached, so you still had

0:07:22 > 0:07:28to find stuff. David Williams talked about adding capacity including

0:07:28 > 0:07:32beds, it sounds easy to open up a bed, but that is the staff cost you

0:07:32 > 0:07:37are paying for, so you have to find the nurses and ancillary

0:07:37 > 0:07:40professionals to support that at short notice. So even with the plans

0:07:40 > 0:07:47in place, you need the stuff. Yes, that's true. Have you monitored

0:07:47 > 0:07:52whether they have overpaid for the staff?I don't think we have seen

0:07:52 > 0:07:58any evidence of overpaying.Yes, trusts had been planning ahead of

0:07:58 > 0:08:03the budget money becoming available having additional services online

0:08:03 > 0:08:07over the holiday period, what the budget money has done is provide a

0:08:07 > 0:08:11funding source for that. Over and above that, I would say that there

0:08:11 > 0:08:16are a range of nonhospital related services that were put in place for

0:08:16 > 0:08:21this winter that were not available last winter such as the fact that

0:08:21 > 0:08:25everybody, every major A&E had clinical GP streaming available this

0:08:25 > 0:08:31year such as the fact that we had a much higher proportion of calls to

0:08:31 > 0:08:3911 on being dealt with by a nurse, a paramedic or GP. They are additional

0:08:39 > 0:08:42services put in place for this winter and the budget money has

0:08:42 > 0:08:47helped fund some of those costs.So just to be clear, if they were put

0:08:47 > 0:08:50in place before the money was available, where their staff trusts

0:08:50 > 0:08:54were saying, we hope we can pay them and we hope the department will pay

0:08:54 > 0:08:58more money, or was this money, the plans were there, but the people

0:08:58 > 0:09:03will not and they had to find the people to fill those?Trusts had

0:09:03 > 0:09:07been asked to and they were planning for expanded services over this

0:09:07 > 0:09:11holiday period, head of the budget money becoming available.So had

0:09:11 > 0:09:15they recruited the stuff already?To give a concrete example, before I

0:09:15 > 0:09:20came here, I was privileged to be the Chief Executive of one of our

0:09:20 > 0:09:24largest trusts, Imperial health care. We had plans to increase our

0:09:24 > 0:09:29capacity at risk by a significant amount going into winter. It is a

0:09:29 > 0:09:34legitimate call on the resource to meet in part costs that trusts knew

0:09:34 > 0:09:40that they were going to incur.How would Imperial have fun to do that?

0:09:40 > 0:09:46Without the money, we would have had to make additional savings or see

0:09:46 > 0:09:50the budget go out as a result.You had staff and doctors and nurses in

0:09:50 > 0:09:56positions, salaried staff to fill this capacity?Inevitably, when you

0:09:56 > 0:10:00plan this, you work on an assumptive you can feel your chefs and we know

0:10:00 > 0:10:05there is a significant with vacancies across the service. --

0:10:05 > 0:10:09chefs. That is the basis on which you plan, in advance, to build the

0:10:09 > 0:10:13capacity. Give the point with mentioning, management information

0:10:13 > 0:10:23tells us that if one compares the bed state in January with November

0:10:23 > 0:10:3530, we had moved up from 96,000 298 ( 299,116 (. So there is no question

0:10:35 > 0:10:42that the NHS steps is capacity up. As a result, some of the really

0:10:42 > 0:10:46impressive work that clinicians across the NHS have done to see

0:10:46 > 0:10:50patients within four hours, despite the pressure, relied on that. So it

0:10:50 > 0:10:54is an important contribution, notwithstanding all the other debate

0:10:54 > 0:11:02we have just had.Mr Dalton, you Chief Executive of a large trust.

0:11:02 > 0:11:05With that hat on, is not more sustainable tap that money built

0:11:05 > 0:11:10into your budget, giving you are planning for this? And you are now

0:11:10 > 0:11:13sitting next to the Department, what would you say to them about how

0:11:13 > 0:11:16sustainable this approach to funding is and what they should be doing in

0:11:16 > 0:11:21future years?I would say two things. First is that the money was

0:11:21 > 0:11:25really welcome for the reasons talked about. And secondly, this is

0:11:25 > 0:11:32something we have signalled, NHS England and ourselves in the

0:11:32 > 0:11:36planning guidance, that it is absolutely right that people should

0:11:36 > 0:11:41be planning for this on the basis of their projections for the year

0:11:41 > 0:11:44rather than receiving the money late in the year although it was welcome.

0:11:44 > 0:11:48I think that is a signal we have sent the NHS for next year partly to

0:11:48 > 0:11:56address this issue.In terms of how the winter money is spent, so Chris,

0:11:56 > 0:12:04you said you are not sure whether that means we have been overpaying.

0:12:04 > 0:12:10I said we have not seen any evidence we have been overpaying. We monitor

0:12:10 > 0:12:13agency spend extremely closely indeed and have a series of controls

0:12:13 > 0:12:19around agency spend and NHS improvement and we were looking at

0:12:19 > 0:12:23the numbers earlier today and we have not seen any evidence in those

0:12:23 > 0:12:28numbers that there was a loss of control on agency spend over that

0:12:28 > 0:12:30period.So where is the extra capacity coming from, who is filling

0:12:30 > 0:12:36these additional hours that can be created through the funding?

0:12:36 > 0:12:44Normally, Ian will comment further, it will normally be existing members

0:12:44 > 0:12:48of staff doing extra shifts either as part of overtime or as part of

0:12:48 > 0:12:55bank arrangements. What we have seen as agency spend has declined is a

0:12:55 > 0:13:02big expansion in trust run bank arrangements. That being the way in

0:13:02 > 0:13:08which temporary cover is funded, which is of course more efficient,

0:13:08 > 0:13:14but also, it fits better with the staffing model of the hospitals.Do

0:13:14 > 0:13:19you want to add anything? Later in the discussion, we may talk in the

0:13:19 > 0:13:24reduction of agency spend, which has been really quite extraordinary, 20%

0:13:24 > 0:13:28projected reduction issue, that is a dramatic reduction. But

0:13:28 > 0:13:34specifically, normally, the best way of staffing a surgeon capacity, and

0:13:34 > 0:13:37bear in mind hospitals have to maximise their capacity to cope with

0:13:37 > 0:13:40the emergency patients coming through the door on a daily basis as

0:13:40 > 0:13:45well as just across winter, is absolutely to offer your own staff

0:13:45 > 0:13:49who know the hospital and the patients and the protocols and the

0:13:49 > 0:13:54wards, work through the bank and you will have seen I think a very

0:13:54 > 0:13:59successful move from agency to bank as part of the overall staffing plan

0:13:59 > 0:14:05for the NHS. That was the case again this winter.

0:14:05 > 0:14:09I appreciate NHS staff may welcome that opportunity to earn extra money

0:14:09 > 0:14:14and do additional hours but is that sustainable in the long run given

0:14:14 > 0:14:17that it must be a highly pressurised environment for those staff over the

0:14:17 > 0:14:22winter period although they clearly do this of their own free will? Are

0:14:22 > 0:14:26we not better to look at longer term solutions around creating those

0:14:26 > 0:14:30positions in earlier in the year even if it comes at a cost, but is

0:14:30 > 0:14:36more sustainable for managing some of those winter pressures?I think

0:14:36 > 0:14:41the key message we give the NHS and we have given clearly in the

0:14:41 > 0:14:46planning guidance for next year is that absolutely the NHS needs to

0:14:46 > 0:14:51plan for the capacity it expects to see, particularly the emergency

0:14:51 > 0:14:54demand which we have seen as this committee has commented on recently

0:14:54 > 0:15:01moving ahead significantly over the last two years to give one

0:15:01 > 0:15:06particular number which is on my mind during December, the NHS

0:15:06 > 0:15:12admitted 400,000 people through as medical emergencies into hospitals

0:15:12 > 0:15:17which is a 5.9% increase in the same period in the previous year so there

0:15:17 > 0:15:22is a significant rise in demand and it's absolutely right that hospitals

0:15:22 > 0:15:26plan for that, winter is, we have had a particularly demanding winter

0:15:26 > 0:15:29and I think NHS staff of done a phenomenal job. Nonetheless... At

0:15:29 > 0:15:37THEY TALK OVER EACH OTHER They might plan for this but if they don't have

0:15:37 > 0:15:43the funding they cannot recruit the people?The bottom line is yes,

0:15:43 > 0:15:48would it be desirable to have the extra money earlier in the year if

0:15:48 > 0:15:53it was there, sure, we are nothing other than grateful for the extra

0:15:53 > 0:15:58money, and our message to the NHS for 2018-19 is we have to plan on

0:15:58 > 0:16:03the assumption we don't have it again and thus build plans for the

0:16:03 > 0:16:07year with the emergency capacity built up for December and January.

0:16:11 > 0:16:23Are we saying, last year you planned, you used the phrase "At

0:16:23 > 0:16:27risk". He did not have the budget capacity, you took the risk that

0:16:27 > 0:16:31either you would get the funding or you'd be allowed to have a

0:16:31 > 0:16:42deficit...Not quite.So let me carry on a second. Then, this year

0:16:42 > 0:16:46if I understand rightly, the plan is that you will plan earlier for the

0:16:46 > 0:16:51peak you will have during the winter? You will have more staff on

0:16:51 > 0:16:56board, does that mean you will have the money already allocated to you,

0:16:56 > 0:17:08what does it mean exactly about funding?When you get a winter

0:17:08 > 0:17:13pressure, the bit of the NHS which sufferers is the discretionary bit,

0:17:13 > 0:17:18the elective bit, not the emergency bit. You would always expect a trust

0:17:18 > 0:17:23to meet and resource itself to meet its emergency demand. In the absence

0:17:23 > 0:17:27of extra money to pay for that, what it would need to do is cut its

0:17:27 > 0:17:33collective activity and its other discretionary activity. So every

0:17:33 > 0:17:38trust will plan for the emergency part, so what we did essentially

0:17:38 > 0:17:42wars we funded what would otherwise have been reductions in service

0:17:42 > 0:17:48elsewhere in the hospital. That is why it's perfectly possible to have

0:17:48 > 0:17:53a planned....THEY TALK OVER EACH OTHER The NHS is being fought to rob

0:17:53 > 0:18:01Peter to pay Paul.Which is why we wanted to invest the extra money. As

0:18:01 > 0:18:06Simon says, would it be even better to have that money right at the

0:18:06 > 0:18:11beginning, of course it would, but we didn't. And clearly it is better

0:18:11 > 0:18:18to remove from trusts they need to make those reductions in other

0:18:18 > 0:18:22services by funding the existing winter plans, than it is not to. But

0:18:22 > 0:18:30we're not denying, is it better to have all the money at the beginning

0:18:30 > 0:18:34of the financial year to spend properly, that is: the optimum, the

0:18:34 > 0:18:43second of done is to get it through the year.Another point, there was

0:18:43 > 0:18:50quite a lot of speculation about the amount of non-urgent surgery

0:18:50 > 0:18:54operations in January which would have to be deferred, we will have

0:18:54 > 0:18:57the definitive figures later this week but the early indications are

0:18:57 > 0:19:01that partly because of the extra funding that was available the

0:19:01 > 0:19:07number of operations deferred was substantially, substantially lower

0:19:07 > 0:19:11than speculated in the press at the time. We will have those figures

0:19:11 > 0:19:19definitively on Thursday.So a lower than very bad figure is a good

0:19:19 > 0:19:26result? You see optimism in every bad figure.I wanted to come back to

0:19:26 > 0:19:30the question about bank staff and flexibility, this is all about

0:19:30 > 0:19:34balance. For something the size of the NHS or indeed a trust it's

0:19:34 > 0:19:38perfectly sensible to have a bank of flexible staff to allow you to

0:19:38 > 0:19:42manage peaks and troughs, you don't want to staff for the maximum for

0:19:42 > 0:19:47the entire year. It is also true we have more vacancies in the NHS that

0:19:47 > 0:19:55we would like. If your vacancy position was perfect you would still

0:19:55 > 0:19:59want a bank of flexible staff so we are definitely not saying we want

0:19:59 > 0:20:07that out of the system. We want much less agency and more bank to meet

0:20:07 > 0:20:11those flexibility needs.Wore the reliance on those bank staff create

0:20:11 > 0:20:14broader pressures which mean it more difficult, part of the reason there

0:20:14 > 0:20:20is the struggle to fill vacancies is that staff find the pressure of

0:20:20 > 0:20:22working in understaffed and overstretched environment is too

0:20:22 > 0:20:28much. Are we not just continuing the cycle?Well-run banks help you with

0:20:28 > 0:20:34the problem rather than hinder. There are members of staff who

0:20:34 > 0:20:38rather like bank work, you choose when you work and it's very flexible

0:20:38 > 0:20:46and you can do it at points in the year where you want to earn more so

0:20:46 > 0:20:49there is positive advantages to flexibility of bank work. But you

0:20:49 > 0:20:53also as you say need a properly staffed kora which is one of the

0:20:53 > 0:21:06reasons we are consulting on future workforce strategy at the moment.

0:21:06 > 0:21:12One of the key points at the beginning was the inability to

0:21:12 > 0:21:16recruit vacancies, the danger we are talking up the bank as if it is a

0:21:16 > 0:21:22solution but...It is why I made the point, it's all about balance, a

0:21:22 > 0:21:25well-run bank has a part to play but it does not take you away from some

0:21:25 > 0:21:32of those underlying issues.Does not fill gaps in the workforce.

0:21:32 > 0:21:40INAUDIBLE The winter money still left held

0:21:40 > 0:21:45centrally, how many trusts asks for more money than they were allocated

0:21:45 > 0:21:49as part of the winter pressure funding and as an example my

0:21:49 > 0:21:53hospital trust was given around £2 million but it calculated the actual

0:21:53 > 0:21:58additional cost was around £10 million so there is an £8 million

0:21:58 > 0:22:02bill to pick up and you are sitting on 50 million, so how many trusts

0:22:02 > 0:22:07would have liked that money earlier in the year rather than new thinking

0:22:07 > 0:22:12about how to spend it now?I don't have that information, the way in

0:22:12 > 0:22:18which the money was allocated was through a series of engagements by

0:22:18 > 0:22:27the national lead Pauline Phillips with regional directors and trusts

0:22:27 > 0:22:34to come up with the allocations which we have been talking about. In

0:22:34 > 0:22:37practice I think the 50 million will help offset some of those additional

0:22:37 > 0:22:44pressures that trusts have faced in managing winter. It's just at the

0:22:44 > 0:22:48moment those pressures are being offset with the money on the

0:22:48 > 0:22:53commissioner side of the equation rather than individual providers and

0:22:53 > 0:22:57that is one of the things we need to work through over the next few

0:22:57 > 0:23:04weeks.Would you be able to send to that information as though specifics

0:23:04 > 0:23:08if someone came back and asked for more at a particular time? It would

0:23:08 > 0:23:12be interesting to know what trusts were seeing the reserves is where

0:23:12 > 0:23:16they needed at the time as opposed to what the Department was offering.

0:23:16 > 0:23:20Has anyone done any work to say what the total cost of the winter

0:23:20 > 0:23:25pressures was to the NHS and how much money was allocated Allah that

0:23:25 > 0:23:29was as a percentage because to pick up the point, we have winter next

0:23:29 > 0:23:34year and it's likely we will have winter pressure points again and if

0:23:34 > 0:23:39we know what the cost of winter is going to be we should be looking now

0:23:39 > 0:23:42to create the circumstances while the trusts are thinking about how

0:23:42 > 0:23:45they can make small surpluses throughout the year to meet those

0:23:45 > 0:23:49costs or in the cases of those trusts which will not get into

0:23:49 > 0:23:53surplus they can start talking to commissioners about how they can get

0:23:53 > 0:23:59the demand without relying on one-off payments.We do a review of

0:23:59 > 0:24:03how winter has gone at the end of winter every year and Bill back into

0:24:03 > 0:24:10the planning. Do we look specifically at that?We do. What I

0:24:10 > 0:24:15will say, I think as was said earlier, the going assumption has

0:24:15 > 0:24:18got to be that the funding made available with realistic planning

0:24:18 > 0:24:22assumptions around emergency growth with the right seasonal has to be

0:24:22 > 0:24:26built into capacity plans at the start of the year. I think that is

0:24:26 > 0:24:32kind of pretty much a statement of the obvious. There was a significant

0:24:32 > 0:24:36positive this year and a significant negative when it came to pressure,

0:24:36 > 0:24:41the significant positive was we have generally turned a corner on the

0:24:41 > 0:24:45delayed transfers of care problem which has been brewing over many

0:24:45 > 0:24:52years and we were able to free up almost 2000 delayed transfer of care

0:24:52 > 0:24:59beds come this January which means it's the best we had into a half

0:24:59 > 0:25:04years and that was in the zone of the 2000-2000 we had plans to free

0:25:04 > 0:25:10up. That is good news. The bad news is the Bobsleigh had the worst flu

0:25:10 > 0:25:16season in seven years. The

0:25:17 > 0:25:23even today we've got around 5000 hospital beds occupied by people

0:25:23 > 0:25:31with flu or no rotavirus is the equivalent of having ten acute

0:25:31 > 0:25:36hospitals solely looking after those patients which would not normally be

0:25:36 > 0:25:44the case, on 100,000 bed base its unusual incremental pressure compare

0:25:44 > 0:25:49with the last six or seven years. Great progress or not the whole

0:25:49 > 0:25:55system working as evidenced by the reduction, set against this pressure

0:25:55 > 0:26:01from flu and norovirus which we have experienced this year at a far

0:26:01 > 0:26:09higher rate than recent memory. Surely the ideal situation is that

0:26:09 > 0:26:14no elective surgery is cancelled and trusts and commissions planning for

0:26:14 > 0:26:22winter pressure but at the same time planning to carry on their normal

0:26:22 > 0:26:28elective work, should that not be the ideal?Yes and his extent that

0:26:28 > 0:26:31is what the national emergencies pressures panel reminding people of

0:26:31 > 0:26:36when they said at the beginning of January don't engage in last-minute

0:26:36 > 0:26:39cancellations the night before, the morning of when people are coming in

0:26:39 > 0:26:44for surgery. The assumption should be given the extra flu pressures,

0:26:44 > 0:26:51norovirus I have thought about you have two free up. Hospitals and

0:26:51 > 0:26:58surgeons rightly want to try to use of a last available bed which can be

0:26:58 > 0:27:00deployed for patients on waiting lists who have got non-urgent needs

0:27:00 > 0:27:05for surgery. There is always that balancing act. But as I see the good

0:27:05 > 0:27:11news is that actually the number of elective deferrals for routine

0:27:11 > 0:27:16operations in January is going to come in substantially more low than

0:27:16 > 0:27:19was feared at the beginning of January.Whilst it is the government

0:27:19 > 0:27:24's ambition to recruit more nurses and doctors it's having great

0:27:24 > 0:27:29difficulty doing so, doesn't it therefore make it even more urgent

0:27:29 > 0:27:33with these constant winter pressures that the government puts greater

0:27:33 > 0:27:39attention into recruiting and training more nurses and doctors?On

0:27:39 > 0:27:44both fronts that is right. On doctors in the hospital and

0:27:44 > 0:27:49community health services it's worth remembering the number of full-time

0:27:49 > 0:27:54equivalent consultants is up by almost 1500 over the course of the

0:27:54 > 0:27:59last year. That compares with GPs with a number is down. In the case

0:27:59 > 0:28:05of doctors in training, there is a increase of more than 1200 over the

0:28:05 > 0:28:13last 12 months so that's important thing to in mind. In curse of the

0:28:13 > 0:28:16nursing and health visiting workforce there are genuine

0:28:16 > 0:28:23pressures that a combination of nurse training, place expansion, new

0:28:23 > 0:28:26routes into nursing, better retention and indeed the action the

0:28:26 > 0:28:30government is poised to take on dealing with nurses pay three the

0:28:30 > 0:28:36new agenda for change reform, all of those have to come together to deal

0:28:36 > 0:28:40with the obvious pressures we are facing in nursing. I am not decrying

0:28:40 > 0:28:44the pressures on the other parts of the workforce but I think the

0:28:44 > 0:28:49nursing pressure is very front of mind.

0:28:49 > 0:28:54It is all very well increasing the number of consultants, but unless

0:28:54 > 0:29:01you have the back-up staff, they are not as effective in productivity

0:29:01 > 0:29:04terms as they might be. Surely the entire picture has got to come

0:29:04 > 0:29:13together?Yes.Yes, that is white we all led by Education England,

0:29:13 > 0:29:17drawing the NHS, that is why we are doing the consultation about future

0:29:17 > 0:29:22workforce strategy. We do have a number of pressures that Simon has

0:29:22 > 0:29:25mentioned and we will need some new approaches.So you will be looking

0:29:25 > 0:29:32at the nursing bursary?We are not looking at changing the funding, but

0:29:32 > 0:29:38we will certainly be looking at the routes into nursing. Including nurse

0:29:38 > 0:29:47apprenticeships and other mechanisms so that we maximise...Can I just be

0:29:47 > 0:29:51clear, a nurse apprentice will be paid to learn on the job rather than

0:29:51 > 0:29:54having the nursing bursary which paid people to train traditional

0:29:54 > 0:30:00route?Yes, if you are a nurse apprentice, it works like any other

0:30:00 > 0:30:03sort of apprenticeship.You are looking at expanding as

0:30:03 > 0:30:07apprenticeships, where you pay someone to train, having got rid of

0:30:07 > 0:30:11the bursary where you paid someone to train?No, it is a completely

0:30:11 > 0:30:16different model.Well, it is maybe a different model, but you have the

0:30:16 > 0:30:19beginning somebody who is not a nurse and at the end, somebody who

0:30:19 > 0:30:25is trying to be a nurse.What we are looking to get to is a variety of

0:30:25 > 0:30:31different routes into nursing that suit different types of people. So

0:30:31 > 0:30:35we will have people who continue to want to do the classic undergraduate

0:30:35 > 0:30:37route, we will also have people who wish to go through nurse

0:30:37 > 0:30:44apprenticeships.Just to be absolutely clear, for fear of

0:30:44 > 0:30:49misunderstanding, if I wanted to train to be a nurse today, I could

0:30:49 > 0:30:53train and a nurse apprenticeship and the NHS would fund that and I am a

0:30:53 > 0:30:58fully qualified staff nurse, yes? And if I wanted to train to be a

0:30:58 > 0:31:02nurse but go through university, I would have to get a loan and pay

0:31:02 > 0:31:07£9,000 a year fees and come out as a fully qualified staff nurse? So the

0:31:07 > 0:31:11NHS is funding nursing still, even though it has got rid of the

0:31:11 > 0:31:14bursary, it is funding it through apprenticeships.The apprenticeship

0:31:14 > 0:31:19is funded through the apprenticeship levy as I am sure you know. So

0:31:19 > 0:31:25saving money. Would you like is to set up these various proposals?Yes,

0:31:25 > 0:31:29to see how many people you are getting through and the variations.

0:31:29 > 0:31:36These are exactly the things we calls that consulting on. For the

0:31:36 > 0:31:43reason that Simon set out.Depends ship levy is still tax payers money,

0:31:43 > 0:31:48I should say. Bridget Phillips is asking about recruitment of GPs.

0:31:48 > 0:31:54I am concerned about the decline we have seen in Sunderland and across

0:31:54 > 0:31:59the North East, in 9% fall in the number of GPs in the last two years

0:31:59 > 0:32:05alone and this continues a declining trend. In an area which has real

0:32:05 > 0:32:08health problems, often chronic problems associated with industry.

0:32:08 > 0:32:12What can we do to address some of the regional imbalances that exist

0:32:12 > 0:32:20within the workforce? You are right about Sunderland, not

0:32:20 > 0:32:25just the North East, other parts of the country as well. But we have to

0:32:25 > 0:32:29decompose it if I can put it that way. The first thing we have to do,

0:32:29 > 0:32:34we had to make sure that for newly qualifying doctors, general practice

0:32:34 > 0:32:40is seen as an attractive career option. Which for several years

0:32:40 > 0:32:45prior, frankly, it has not been. We have had significant shortages of

0:32:45 > 0:32:50people going on to the GP training scheme. What we have done is

0:32:50 > 0:32:58increase the GP training recruitment onto the training scheme. We have

0:32:58 > 0:33:013157 places felt blessed year which was the highest intake of GP

0:33:01 > 0:33:07trainees ever. -- build last year. And we have offered salary

0:33:07 > 0:33:12supplements to GP trainees who agree to train in parts of the country

0:33:12 > 0:33:16where, as you described, we have had problems in filling those training

0:33:16 > 0:33:25spots. And we have filled 133 such places last year and because of the

0:33:25 > 0:33:28success of the scheme last year, we are expanding that to 250 places

0:33:28 > 0:33:34this year. In addition, we know that we have got to make it easier to

0:33:34 > 0:33:40come back to GP work, if you have taken time out for a family break,

0:33:40 > 0:33:47so we have a GB returned back to scheme aiming to support at least

0:33:47 > 0:33:53500 GPs in induction refresher programmes. 600 GPs have applied to

0:33:53 > 0:33:56join that programme. We are also trying to develop a more flexible

0:33:56 > 0:34:02model for being the GP so if you do not want to sign on as a partner or

0:34:02 > 0:34:07as a majority of your week salary employee of practice, we have got

0:34:07 > 0:34:10something called GP career plus where you agree to work with

0:34:10 > 0:34:14multiple practices in the area where you live, but with a more sustained

0:34:14 > 0:34:19commitment and an exchange, you get a series of supports from the NHS.

0:34:19 > 0:34:24But we also have a problem which we do not as yet have an answer to,

0:34:24 > 0:34:28which is the premature retirement rate for people in their late 50s

0:34:28 > 0:34:35and 60s. And I think the Department, the evidence to review body has

0:34:35 > 0:34:39pointed out one of the contributory factors is the broad change to the

0:34:39 > 0:34:45pension system and so I am not going to pretend that is not a problem, we

0:34:45 > 0:34:49have more work to do on that.When you look at the numbers coming

0:34:49 > 0:34:54through to training places in 2017, the problem is also again we see a

0:34:54 > 0:35:00regional imbalance. In London, the fill rate was 106% and in the North

0:35:00 > 0:35:06East, Dunst and 77%. So at the point of recruiting people into practice,

0:35:06 > 0:35:09there are significant regional variations in our ability to fill

0:35:09 > 0:35:13those places. It is welcome that we see more people coming in, but it is

0:35:13 > 0:35:16not just enough to have a raw number, we want to make sure those

0:35:16 > 0:35:20people are in the book -- right places.Exactly, that is why we have

0:35:20 > 0:35:24the salary supplement scheme and we are not just creating lots of extra

0:35:24 > 0:35:27training places in London which you probably could fill because the

0:35:27 > 0:35:31worry is that might draw people from other parts of the country in those

0:35:31 > 0:35:37training schemes. What I also did not mention was the work we are now

0:35:37 > 0:35:40doing and GP international recruitment with a particular

0:35:40 > 0:35:42intention of placing those internationally recruited GPs in

0:35:42 > 0:35:47parts of the country where it is hard to recruit and retain. So the

0:35:47 > 0:35:51North East falls into that category, but also places like Lincolnshire

0:35:51 > 0:35:56where our first international recruits had been recruited to and

0:35:56 > 0:36:02they are installed. We are aiming to see we can resource may be 2,000

0:36:02 > 0:36:06plus international GPs over the next three or four years.I agree on the

0:36:06 > 0:36:11issue of medical school training places and Sunderland University has

0:36:11 > 0:36:14bits to open a new school to provide additional places because also, do

0:36:14 > 0:36:18we not need to look at making sure we have access to medicine more

0:36:18 > 0:36:23broadly, not just supplementing existing provision, but looking at

0:36:23 > 0:36:27creating new and different ways of getting people into medicine?We

0:36:27 > 0:36:32certainly do. It has to be said that is probably not a town or city in

0:36:32 > 0:36:37the land that has not bid for a new medical school but Jo advocacy for

0:36:37 > 0:36:40Sunderland is warmly welcomed and noted?There is quite clear evidence

0:36:40 > 0:36:46that people do tend to stay where they are trained or placed which is

0:36:46 > 0:36:56why we have taken measures as Simon is setting out.We have spent a lot

0:36:56 > 0:37:04of time on the preamble, you have been in the Department aid year now?

0:37:04 > 0:37:12Nearly two. Forgive me, time flies! How would you rank the financial

0:37:12 > 0:37:162017-18 in terms of success in balancing the NHS budget?The

0:37:16 > 0:37:19National Audit Office set it out very clearly. We clearly made a lot

0:37:19 > 0:37:27of progress from 2015 to 2016, in terms of the overall deficit and the

0:37:27 > 0:37:33levels of financial rigour we saw in the system following the financial

0:37:33 > 0:37:42reset we did in July 2016. But we did not achieve everything that we

0:37:42 > 0:37:45were trying to achieve, as the National Audit Office sets out, and

0:37:45 > 0:37:53we still have a lot of challenges going forward.I think challenges in

0:37:53 > 0:37:59the word, you are still papering over the cracks with capital budgets

0:37:59 > 0:38:03funding revenue, still one of savings. And from the Finance

0:38:03 > 0:38:08Directors that send information to us, a lot are concerned just as one

0:38:08 > 0:38:15example, East Lancashire hospitals NHS trust, the last two years, the

0:38:15 > 0:38:17trust has become increasingly dependent on non-recurrent measures

0:38:17 > 0:38:22to balance our box and while there remains an opportunity for waste, I

0:38:22 > 0:38:25guess they say that to people, but they might be telling you what they

0:38:25 > 0:38:28are saying, but it is increasingly difficult to release this

0:38:28 > 0:38:35opportunity. The mild way of saying that they cannot keep doing it. So

0:38:35 > 0:38:41you are still doing it?Figure ten on page 27 of the National Audit

0:38:41 > 0:38:49Office report set this out extremely clearly. The level of recurrent

0:38:49 > 0:38:56savings that trusts have achieved remains by a long way the biggest

0:38:56 > 0:39:02portion of the savings made. We do still have one of measures and that

0:39:02 > 0:39:08one of measures in every set of accounts in every sector, we wish to

0:39:08 > 0:39:12see our reliance on that falling over time and as we have discussed

0:39:12 > 0:39:22up the Crow how long will it take? We want to eliminate capital revenue

0:39:22 > 0:39:29switches by the end of this Parliament. What have we said, David

0:39:29 > 0:39:37on the one-off measures?We have not set a timescale.Very cleverly, Mr

0:39:37 > 0:39:40Williams! Can you set a timescale now and how long is it acceptable to

0:39:40 > 0:39:44oversee the budget as you do is Finance Director at the Department

0:39:44 > 0:39:52of Health that allows hospitals to carry on Reading capital budgets?I

0:39:52 > 0:39:55prefer not to set a precise timetable now, not least because I

0:39:55 > 0:40:05think as you see within the report, and as comes out in data that the

0:40:05 > 0:40:11NHS publishes, they're both a general set of issues which NHS

0:40:11 > 0:40:17providers need to deal with, but also, a of specific challenges for a

0:40:17 > 0:40:25relatively small number of trusts with especially difficult financial

0:40:25 > 0:40:32situations and large deficits. And so thinking about a reduction in

0:40:32 > 0:40:40reliance...Those hospitals, highlighted they are one of the

0:40:40 > 0:40:44biggest challenges in the NHS budget and some trusts, they have large

0:40:44 > 0:40:48deficits and if they do not get support, they will continually be a

0:40:48 > 0:40:55drain on the overall budget. Is it possible for those trusts with those

0:40:55 > 0:41:00big problems to overcome them in over a year or two years, do they

0:41:00 > 0:41:05not need help to get to a place where they no longer have this large

0:41:05 > 0:41:11and growing deficit?Yes, they do. It is white in the July reset I

0:41:11 > 0:41:14mentioned, we introduce the financial specialists -- special

0:41:14 > 0:41:20measures regimes which is one of the things that has worked for those

0:41:20 > 0:41:23people going into the financial special measures regime, we have

0:41:23 > 0:41:28seen either stabilisation or improvement in everybody's finances,

0:41:28 > 0:41:35which is partly about pressure and also about the support putting.Can

0:41:35 > 0:41:41I just respond those points? Firstly, on the recurrent and on the

0:41:41 > 0:41:45challenged trusts because both are important. I think on the recurrent

0:41:45 > 0:41:50and non-recurrent income it is important to have a sense of context

0:41:50 > 0:41:55which says that the NHS provider sector for 232 organisations is

0:41:55 > 0:41:58continuing to deliver every year more cost improvements and they have

0:41:58 > 0:42:06in the past so overall, we have seen that rise from 2.9 billion to 3.1

0:42:06 > 0:42:14billion in 2016-17 and a forecast based on 3.3 billion 417-18. So that

0:42:14 > 0:42:19is the good news. It is true to say and it concerns me as much as my

0:42:19 > 0:42:24colleagues that while there is a legitimate degree of non-recurrence

0:42:24 > 0:42:28in that, the amount of non-recurrent still small compared to the overall

0:42:28 > 0:42:33savings and it is rising. And that is an issue. There is no question

0:42:33 > 0:42:36that the sector is continuing to deliver cost improvements and it

0:42:36 > 0:42:41needs to continue to do that, but we cannot rely on the same amount of

0:42:41 > 0:42:47non-recurrent on an ongoing basis. And they are reducing cost

0:42:47 > 0:42:52reductions, but we know demand is rising. The costs are going up. At a

0:42:52 > 0:42:58rate faster than even if we are optimistic, and we talking about

0:42:58 > 0:43:04efficiencies, would you not agree? No, I would disagree with that. I

0:43:04 > 0:43:09think the issue of fiscal studies has shown that our funding and our

0:43:09 > 0:43:13all costs have been growing fast lower than the rate at which the NHS

0:43:13 > 0:43:17has been doing extra patient care. So just to put numbers around this,

0:43:17 > 0:43:24if you look at the period from 2009-10 to 2016-17, the IFS data

0:43:24 > 0:43:29shows the English Department of Health, the funding has gone up by

0:43:29 > 0:43:342.3%. The services we provide for emergency patients have gone up by

0:43:34 > 0:43:406.7%. And the plan surgery would provide has gone up by 15.7%. So the

0:43:40 > 0:43:44NHS has got a superb record on productivity growth, which is why

0:43:44 > 0:43:48evidence that has been prepared for this committee by the health

0:43:48 > 0:43:50foundation points out NHS productivity growth has been faster

0:43:50 > 0:43:54than that of the Cape economy overall. So these are genuine

0:43:54 > 0:44:02savings.That was interesting evidence. I think it showed what the

0:44:02 > 0:44:07NHS can do at some of its best. But demand is increasing and that does

0:44:07 > 0:44:13not create. You have said it often enough, I'm giving you an open goal

0:44:13 > 0:44:17here, next to the permanent Secretary, that there is a challenge

0:44:17 > 0:44:21with the sustainability and the funding mechanism we have heard.

0:44:21 > 0:44:24Winter crisis planned for without the full money available, trusts

0:44:24 > 0:44:27know they do not have the staff and yet they have accepted a funding

0:44:27 > 0:44:31model that does not allow them to effectively recruit the stuff even

0:44:31 > 0:44:37if they were available, and you have that consistent game. 4.9 billion

0:44:37 > 0:44:39last year was given financial support to keep the NHS trusts

0:44:39 > 0:44:42afloat.

0:44:42 > 0:44:51THEY TALK OVER EACH OTHERI think both things can be true once, the

0:44:51 > 0:44:54NHS has become even more efficient over the course of the last several

0:44:54 > 0:44:58years, all the data shows that and at the same time there is a wedge

0:44:58 > 0:45:04opening up between the NHS and the funding available, those things at

0:45:04 > 0:45:09the same time and just to put another point which illustrates the

0:45:09 > 0:45:18point very graphically, in the report from the NAO, the referenced

0:45:18 > 0:45:23that the funding has been going up in real terms but the difference

0:45:23 > 0:45:27between what the NHS has successfully managed with over the

0:45:27 > 0:45:36last five years and 3.7% is an £8.8 billion funding difference in

0:45:36 > 0:45:432018-19. Cumulatively that's 27 billion of funding that the NHS has

0:45:43 > 0:45:47contributed to economic turnaround for the UK economy over that period

0:45:47 > 0:45:53compared with our trend rate of funding growth.If you take it over

0:45:53 > 0:46:00a long period of time the suggestion... The 48. If you look at

0:46:00 > 0:46:05what has happened since 2010, we have seen, your predecessor

0:46:05 > 0:46:08acknowledged the efficiency savings target was increasingly challenging

0:46:08 > 0:46:17to deliver. What is your view on the 4% efficiency savings?Could I

0:46:17 > 0:46:26answer the point on the trust first? I do agree the productivity point is

0:46:26 > 0:46:30not insignificant. We anticipate a 1.8% like-for-like efficiency

0:46:30 > 0:46:34forecast for this year which does considerably outstrip the rest of

0:46:34 > 0:46:42the economy. On the most challenged trusts I think it's fair to say a

0:46:42 > 0:46:47small minority of our trusts have particular financial issues they

0:46:47 > 0:46:52need to resolve. It is also true that returning was trusts to

0:46:52 > 0:46:59financial surplus is of course not going to be a one or two-year job,

0:46:59 > 0:47:01it's a process of improvement against an underlying deficit

0:47:01 > 0:47:06problem which needs to be there for improved over a million of years, I

0:47:06 > 0:47:12think one of the reasons my predecessor introduced the financial

0:47:12 > 0:47:19special measures regime back in 2016 is to allow more support for NHS

0:47:19 > 0:47:23improvement to go into the most financially challenged trusts. I

0:47:23 > 0:47:28think the record in the initial year, the first eight trusts

0:47:28 > 0:47:33according to the NAO report improved their year end position by just £96

0:47:33 > 0:47:38million as a result of being in the programme. For the next category of

0:47:38 > 0:47:43trusts those which were in what we call the financial improvement

0:47:43 > 0:47:51programme, 22 trusts, improved their position by 107 million. So there is

0:47:51 > 0:47:54a general need to create continued efficiency across the sector as a

0:47:54 > 0:47:57whole and we will talk about some of the elements of that as this

0:47:57 > 0:48:02committee goes on. But there are also individual organisations that

0:48:02 > 0:48:06are further away from really need to be financially and I think we have

0:48:06 > 0:48:09to be realistic about the pace of improvement they can make which will

0:48:09 > 0:48:14not be a single year 's improvement. Does this not cause challenges we

0:48:14 > 0:48:19have got effectively rewards, there is a potential for more funding to

0:48:19 > 0:48:23come from the centre, if you're one of these challenged trusts and you

0:48:23 > 0:48:29don't accept because you know you cannot manage to deliver that, you

0:48:29 > 0:48:35get less additional money, so the additional funding is supporting

0:48:35 > 0:48:41trusts which do already reasonably well. There is a serious problem

0:48:41 > 0:48:45with the trust and additional funding is not so readily available,

0:48:45 > 0:48:52is that not a topsy-turvy way of dealing with it, what tools you have

0:48:52 > 0:48:57for dealing with challenged trusts with deficits which take several

0:48:57 > 0:49:00years to resolve to make sure they do that without being further

0:49:00 > 0:49:05penalised because of decisions out with the control of the current

0:49:05 > 0:49:07management or patients, large trusts which had been brought her in

0:49:07 > 0:49:11interesting ways are what I am thinking of.There are several

0:49:11 > 0:49:14different elements so I will pixel Villa Park because it's quite a

0:49:14 > 0:49:22complex question so I hope I don't forget but I'm sure you'll come back

0:49:22 > 0:49:26if I do, the most challenged trusts do need support across a period of

0:49:26 > 0:49:30time which is why on occasions and I vow to do it in my tenure, I started

0:49:30 > 0:49:35on this role on the 4th of December, we had to move into financial

0:49:35 > 0:49:38special measures regime. As regarding the sustainability and

0:49:38 > 0:49:44transformation fund, and the underlying position of trust I think

0:49:44 > 0:49:51they can be different things. The control totals have proven their

0:49:51 > 0:49:56worth as part of the financial reset my predecessor was part of

0:49:56 > 0:50:02overseeing and I am convinced where they contribute to the NHS improving

0:50:02 > 0:50:08the NHS provider sector in proving its financial sector during 16-17 to

0:50:08 > 0:50:13the extent commented on by the committee. I think it is fair to say

0:50:13 > 0:50:19that because of the sustainability and transformation fund which needs

0:50:19 > 0:50:24to be acquired there are different from the underlying position of our

0:50:24 > 0:50:26most challenged trusts and the imbalance between the income and

0:50:26 > 0:50:31expenditure. Those things are different. The remedy is necessarily

0:50:31 > 0:50:37there which needs to be different and it's fair to say there are more

0:50:37 > 0:50:40challenged trusts which will need support over a longer period of time

0:50:40 > 0:50:43than the quarter by quarter approach the sustainability and

0:50:43 > 0:50:50transformation fund, on the point of control totals they were set on a

0:50:50 > 0:50:57consistent basis across the NHS in 2016-17 and were meant to create an

0:50:57 > 0:51:00incentive for incremental improvement. A number of trusts have

0:51:00 > 0:51:05control totals which are deficits and that reflects the fact that you

0:51:05 > 0:51:08rightly highlighted a minute ago that trusts with the biggest

0:51:08 > 0:51:13problems will take a number of years to bring finances back. It would be

0:51:13 > 0:51:17unrealistic to set a success criterion of moving into surplus in

0:51:17 > 0:51:22any of time so they reflect intermittent improvement which takes

0:51:22 > 0:51:27me to the third part of your question which is whether the

0:51:27 > 0:51:32financially challenged trusts remains of them all in all its parts

0:51:32 > 0:51:40and while I am convinced genuinely convinced that in 16-17, 17-18 and

0:51:40 > 0:51:44looking into 18-19 the resume of control totals, the sustainability

0:51:44 > 0:51:51and support funds and the package of measures that we help trusts with is

0:51:51 > 0:51:55right, I think in some areas and I would perhaps highlight the rate of

0:51:55 > 0:52:01interest paid on loans for cash support to our most challenged

0:52:01 > 0:52:06organisations which is currently running at 6% as opposed to the 1.5%

0:52:06 > 0:52:10which is levied on other organisations that are in the

0:52:10 > 0:52:14capability of accepting their control totals, I do think going

0:52:14 > 0:52:17forward we should have a look at that as part of a financial review.

0:52:17 > 0:52:21I think there's a general support, speaking on behalf of my colleagues,

0:52:21 > 0:52:27that looking ahead the review that. We agree you should reward financial

0:52:27 > 0:52:35mismanagement but 6% seems a high penalty.I agree with everything

0:52:35 > 0:52:39which has been said, just to be clear, getting into financial

0:52:39 > 0:52:44special measures is not how big is your deficits, it is about

0:52:44 > 0:52:48management and the trusts we are most concerned about are the ones

0:52:48 > 0:52:54where you see rapidly rising projected deficits because that

0:52:54 > 0:52:56cannot be about underlying structural questions, if you have an

0:52:56 > 0:52:59underlying structural question you should know what it is and be able

0:52:59 > 0:53:03to cost it. It's those ones where you see the deficit projection

0:53:03 > 0:53:09changing month-to-month that we have concerns about. We agree with Ian

0:53:09 > 0:53:15that the regime which was put in has achieved a lot and we also agree

0:53:15 > 0:53:18that going forward there were elements including the interest rate

0:53:18 > 0:53:25question that we will want to review as to whether that is the right

0:53:25 > 0:53:33mechanism going forward. As the report sets out we are committed to

0:53:33 > 0:53:36the STF is a funding mechanism for the next financial year and we will

0:53:36 > 0:53:40have a choice about whether we continue with that regime or whether

0:53:40 > 0:53:44we use that money in a different way and now is right time to reviewing

0:53:44 > 0:53:52that.It's bit like the current trends with kids for slime, it moves

0:53:52 > 0:54:02would have it is needed any good the way. It doesn't stick. THEY TALK

0:54:02 > 0:54:11OVER EACH OTHER This is supposed to transform services which were used

0:54:11 > 0:54:20to stop, to fill gaps.Explicitly we used the resources to tackle the big

0:54:20 > 0:54:26challenge we had in 15-16 around where the provider deficit had got

0:54:26 > 0:54:30too and it was a mechanism that was designed to incentivise exactly what

0:54:30 > 0:54:34happened which was for those deficits to come down. The question

0:54:34 > 0:54:41as I say is whether that regime which achieved an enormous amount

0:54:41 > 0:54:44across the last financial year and in this financial year is exactly

0:54:44 > 0:54:48the right regime going forward is a questionINAUDIBLE

0:54:48 > 0:54:56.The report itself from NAO and I caught the sharp decline in

0:54:56 > 0:55:03financial position is halted. Incentivise the most trusts to

0:55:03 > 0:55:08improve financial discipline. We agree.But whether it transformed it

0:55:08 > 0:55:15is another matter.As NAO also see effective transformation takes time.

0:55:15 > 0:55:23That is the point. I will bring in Bridget Philipson.On that point, in

0:55:23 > 0:55:28terms of how the funding is being used, the fact that 40% of that

0:55:28 > 0:55:32funding is being used to create or increase surplus in trusts, is that

0:55:32 > 0:55:42effective use what happens at the end of the

0:55:44 > 0:55:49net off deficits against surpluses. In terms of system level stability

0:55:49 > 0:55:55in makes no difference at all.That is not what the patient will be

0:55:55 > 0:56:02concerned about.The question which is one of the things we will want to

0:56:02 > 0:56:08look at is what behaviours you are creating at trust level. To be

0:56:08 > 0:56:19exactly in line with the NAO report and court, we do think the way we

0:56:19 > 0:56:21use STF did incentivise greater financial rigour both across people

0:56:21 > 0:56:25who were in deficit and across people who were in surplus but could

0:56:25 > 0:56:29have been in greater surplus. We think the evidence does support

0:56:29 > 0:56:34that. I think this is the question Ian was raising, whether that

0:56:34 > 0:56:39remains the mechanism to incentivise the right behaviours at trust level

0:56:39 > 0:56:46is something.I think NAO as is so often the case but not always the

0:56:46 > 0:56:49case got the recommendation is absolutely right on this point. They

0:56:49 > 0:56:54talk about the need for more...I don't think they will be swayed by

0:56:54 > 0:57:03this flattery!LAUGHTER They talk about system incentives

0:57:03 > 0:57:10and working, and the opportunity to think about the deployment of the

0:57:10 > 0:57:15STF funding in 2019-20 represents such an opportunity which we will

0:57:15 > 0:57:23take. But to 2018-19 we got a very clear set of rules and allocations

0:57:23 > 0:57:28set out for the sector as a whole and that which we are putting out

0:57:28 > 0:57:35emphasis on from the year ahead.A couple of things, you're not going

0:57:35 > 0:57:42to make your savings target in this year are you? I think that is right.

0:57:42 > 0:57:47The forecast outturn is for 3.3 billion against, I'll try remember

0:57:47 > 0:57:56if it was 3.8, 3.8 billion. There is an underachievement this year.

0:57:56 > 0:58:04Another thing, I'm not saying that's necessarily bad but you need to be

0:58:04 > 0:58:10realistic about what balance of recovering and non-recovering will

0:58:10 > 0:58:14likely turn out to be the case, which you don't know at the moment I

0:58:14 > 0:58:20think I am right in saying. And if I might finish, I also think it's

0:58:20 > 0:58:26worthwhile asking a question as we come to the end of this programme

0:58:26 > 0:58:31about how much damage they have done. In other words particularly

0:58:31 > 0:58:36the use of capital funding on the recurrent case, admittedly those

0:58:36 > 0:58:40capital findings may have been slightly more than were strictly

0:58:40 > 0:58:45required in the first place but still there must have been quite

0:58:45 > 0:58:52long periods of deferment of capital spend. Are you going to take stock

0:58:52 > 0:58:57of that? It might have been necessary to do it but are you going

0:58:57 > 0:59:00to take stock of that and understand where that leaves you and what you

0:59:00 > 0:59:02may need to do as a result?

0:59:07 > 0:59:17Just on that last point about capital, the report refers to the

0:59:17 > 0:59:25review of underemployment is that is a Robert Naylor led, which set out

0:59:25 > 0:59:31an ambition for around 10 billion of capital investment in the NHS over a

0:59:31 > 0:59:39period of time. And that 10 billion split roughly into 50-50 four

0:59:39 > 0:59:49transformation of services and picking up a backlog maintenance in

0:59:49 > 0:59:55the system. The Chancellor set out in the autumn budget the third share

0:59:55 > 1:00:02as it were to come from direct investment by government and we're

1:00:02 > 1:00:08working through with individual organisations how we can increase

1:00:08 > 1:00:17that in particular. We are undertaking a review of capital

1:00:17 > 1:00:23flows and the Chancellor set out briefly in his budget announcement

1:00:23 > 1:00:29in particular to understand how at a local level the decisions around

1:00:29 > 1:00:39whether to maintain or use money elsewhere to support day-to-day

1:00:39 > 1:00:46operations, how they'll is just how those decisions are taken and how we

1:00:46 > 1:00:50look at the wave funding flows the system and the incentives to guard

1:00:50 > 1:00:58against that in the future. Work just starting now.Interesting it is

1:00:58 > 1:01:03starting now when you have had a couple of years Reading capital fund

1:01:03 > 1:01:06revenues so we will be following that as you will be not surprised to

1:01:06 > 1:01:12hear.Just returning to the sustainability and transformation

1:01:12 > 1:01:16funding, as was, would it be better for trusts to have a greater degree

1:01:16 > 1:01:20of security and certainty in the system, rather than coming to quite

1:01:20 > 1:01:24a late stage of the year and getting to just, getting decisions as to

1:01:24 > 1:01:30whether they are going to have an ability to sort things out in the

1:01:30 > 1:01:36long-term?The way the regime works is that those are set out

1:01:36 > 1:01:40prospectively at the start of the year and then it depends on how well

1:01:40 > 1:01:44the trust us as to what we earn. I don't think it is quite as you

1:01:44 > 1:01:49describe it.They could plan better for the longer term if they had the

1:01:49 > 1:01:54greater degree of certainty about money they were to receive. You

1:01:54 > 1:01:57would agree a controlled total, you meet it and you get money for

1:01:57 > 1:02:01meeting it and a bonus potentially on top of that, is that an effective

1:02:01 > 1:02:06means of funding services in the medium to long-term?In the medium

1:02:06 > 1:02:09to long-term, we are looking to move more of the funding of the health

1:02:09 > 1:02:13service a population basis where different organisations within an

1:02:13 > 1:02:18area then able to plan together for the kind of why don't more profound

1:02:18 > 1:02:24changes that they think are needed to join up parts of their primary

1:02:24 > 1:02:29community and hospital services. And that is what is happening in the

1:02:29 > 1:02:32first of the integrated care systems across the country covering around

1:02:32 > 1:02:3510 million people across England and they are taking shared

1:02:35 > 1:02:41responsibility for their STF and a system controlled total, that is the

1:02:41 > 1:02:46plan. And so that is incrementally the direction we absolutely do want

1:02:46 > 1:02:51to move on.Will that include a review of tariffs, in terms of

1:02:51 > 1:02:55looking at procedures and how they are funded? So where trusts would be

1:02:55 > 1:02:59receiving less than the cost of the procedure?We have a two-year tariff

1:02:59 > 1:03:10place and we will have decisions to make about the tariff in 2019-20.

1:03:10 > 1:03:15But at the same time, we are also being pushed by many across the NHS

1:03:15 > 1:03:17to make it easier to move money around between different services

1:03:17 > 1:03:22rather than the click of the turnstile payment system which was

1:03:22 > 1:03:28more orientated towards the problems we were dealing with and having to

1:03:28 > 1:03:32expand elective surgery to cut long waits for care. I do think there are

1:03:32 > 1:03:36a set of things going on in terms of the urgent emergency care pathway

1:03:36 > 1:03:39that have to be looked at. There is a case for saying that some of the

1:03:39 > 1:03:46funding implied in the sustainability and transformation

1:03:46 > 1:03:50funding, the STF, is probably reflecting the underlying cost of

1:03:50 > 1:03:53emergency care, that is the basis on which it is allocated we need to

1:03:53 > 1:03:57factor in. Equally, there have been big shifts in the clinical pathways

1:03:57 > 1:04:01for emergency care and at the moment, the tariff system does not

1:04:01 > 1:04:06adequately reflect those. Specifically, as Ian said, the

1:04:06 > 1:04:09headline increases we see in emergency admissions, non-elective

1:04:09 > 1:04:16admissions, if you look over the last, over this year, to date, the

1:04:16 > 1:04:21number of emergency admissions that require a stay in hospital have been

1:04:21 > 1:04:25going up by just over 1%, the number of so-called emergency admissions

1:04:25 > 1:04:31dealt with on the same day, half of those in less than four hours have

1:04:31 > 1:04:39gone up between 6-7%. Call them and add emergency admission, they are a

1:04:39 > 1:04:45new type of care and we have to make sure the system funds efficient care

1:04:45 > 1:04:49delivery for those kinds of pathways.So you are planning to

1:04:49 > 1:04:54change the tariff system, and when will trusts know the new tariff

1:04:54 > 1:04:58system?During the course of this year, 18-19, we will set out

1:04:58 > 1:05:05proposals together and we will consult on them.More specific than

1:05:05 > 1:05:13that.In the autumn.We need to give the NHS certainty.Absolutely. So it

1:05:13 > 1:05:21is the autumn?In particular, it... I'm just going to remind witnesses

1:05:21 > 1:05:27about the time. If you are quick answer in our quick questions, we

1:05:27 > 1:05:33might be out of here by six o'clock. The future of £109 billion of NHS

1:05:33 > 1:05:38funding is not a quick question.No, absolutely, but if you can set the

1:05:38 > 1:05:41questions, we can ask the questions quickly and we have a chant of at

1:05:41 > 1:05:46least scratching the surface.At the risk of delaying hearing, this is a

1:05:46 > 1:05:55hugely complex area. The law requires quite a lot and we comply

1:05:55 > 1:05:59with that. And that builds a level of uncertainty into trust finances

1:05:59 > 1:06:04by the nature of it. We do understand that. There are things we

1:06:04 > 1:06:08can do which Simon and Ian described which create more certainty, but it

1:06:08 > 1:06:15does not answer the entire original question. We will for the

1:06:15 > 1:06:18foreseeable future be running a Commission provide a system which

1:06:18 > 1:06:24has some of those uncertainties in it.There are certainly changes

1:06:24 > 1:06:31afoot under the radar.Is the current funding system of opaque and

1:06:31 > 1:06:35often unfathomable even for people who love Witney NHS for a long time

1:06:35 > 1:06:45and who currently work in the NHS? A lack of certainty and you miss your

1:06:45 > 1:06:50controlled total, what happens?In terms of the refresh on the guidance

1:06:50 > 1:06:56we have set out, Ian and I for next year, we have been very clear and

1:06:56 > 1:07:02transparent about what we are asking of the NHS.I don't think trusts

1:07:02 > 1:07:10would accept there is transparency. You have picked up uncertainty about

1:07:10 > 1:07:13the 2018-19 arrangements.I am talking about what has gone on

1:07:13 > 1:07:20previously, you agree you are uncertain as to what you will

1:07:20 > 1:07:24receive, if you get a bonus on top of that. That seems a rather

1:07:24 > 1:07:29perverse way.We could have just run that STF to the normal commissioning

1:07:29 > 1:07:35system. The judgment we took was to give NHS improvement weavers over

1:07:35 > 1:07:40that 1.8 billion so as to give them the ability to have those trust

1:07:40 > 1:07:49specific conversations and that has been sent via improved financial

1:07:49 > 1:07:53discipline. As Ian and I have also said, we don't think that is the

1:07:53 > 1:07:58mechanism in perpetuity that we would want to continue.As the

1:07:58 > 1:08:06report sets out, the combined income for trusts in 2016-2017 is just over

1:08:06 > 1:08:11£8 billion. Of the 1.8 billion of STF, one quickly was paid out

1:08:11 > 1:08:15essentially as planned and the uncertainty element was around half

1:08:15 > 1:08:25a billion -- one quarter. So half a billion is a degree of risk which

1:08:25 > 1:08:28should not be too difficult to manage.

1:08:28 > 1:08:33Why has the fund fails to improve performance of acute services?

1:08:33 > 1:08:40Why did everybody not only 30%... Is that what you mean?It is

1:08:40 > 1:08:44sustaining, but not really transforming.Yes, I agree with

1:08:44 > 1:09:01that.You talked earlier about the NHS...As I said before, we took a

1:09:01 > 1:09:08very explicit decision in July 2016 that the level of deficits and

1:09:08 > 1:09:15financial control that we had seen in 2015-2016 was a big problem. And

1:09:15 > 1:09:21that we would focus our efforts on that. And we did it very explicitly.

1:09:21 > 1:09:30So did we emphasise reintroducing financial rigour and stabilising

1:09:30 > 1:09:35trust finances? Yes, we did. Does that have a consequence for some of

1:09:35 > 1:09:39the transformation things? Quite clearly, whenever we do these

1:09:39 > 1:09:44things, we have that consequence. And we did that...Did you

1:09:44 > 1:09:51overpromise on the transformation?I might leave others to comment. But

1:09:51 > 1:09:57as the report notes, quite a lot of progress has been made through SDP

1:09:57 > 1:10:03is, variable.That does not mean transformation. That is what we were

1:10:03 > 1:10:13there to do. And Simon will add in some of our leading areas, there are

1:10:13 > 1:10:16some genuinely original approaches. We do not see that across the

1:10:16 > 1:10:22country as a whole which is where we need to get to. But well we took

1:10:22 > 1:10:29some very explicit decisions to prioritise stabilisation, there was

1:10:29 > 1:10:36also quite a lot going on on the transformation.

1:10:36 > 1:10:42We will move on to that.You talked about the contribution the NHS have

1:10:42 > 1:10:47made towards the UK targets by way of spending reduction, but that

1:10:47 > 1:10:52comes to the point that all of this comes at a cost, not simply a

1:10:52 > 1:10:58financial cost, but the impact on patient care, the impact on the A&E

1:10:58 > 1:11:03waiting, the length of time people will be on waiting lists, the

1:11:03 > 1:11:08ambulance backlogs, the time it takes to see your GP. The NHS has

1:11:08 > 1:11:11had to make the contributions, but that has not just been at a

1:11:11 > 1:11:15financial cost service, it has been at a direct cost to patients and

1:11:15 > 1:11:21those who need the NHS. Well, we discuss this last January.

1:11:21 > 1:11:29I think those comments, we aired that issue and I have been very

1:11:29 > 1:11:37upfront about that point since then. I think Sir Angus in his comment on

1:11:37 > 1:11:43this report, his press release, made a wise statement when he said, the

1:11:43 > 1:11:47public purse may be better served by a long-term funding settlement that

1:11:47 > 1:11:50provides a stable platform for sustained improvement. I think that

1:11:50 > 1:11:55is why the Health Secretary also has been arguing for a funding

1:11:55 > 1:12:10settlement. On the quality side, certainly what

1:12:10 > 1:12:13the CTC has found is not a drop in the quality of service provided by

1:12:13 > 1:12:22the NHS. And ratings have been going in the other direction. And the

1:12:22 > 1:12:25impression on of us would want to leave if anyone is that the basic

1:12:25 > 1:12:31quality of care has in any way been sacrificed, there is a huge quantity

1:12:31 > 1:12:36of effort into that and the NHS has responded extremely well. I would

1:12:36 > 1:12:40not deny of course there have been consequences around some of the

1:12:40 > 1:12:49targets, but in terms of quality of care...The access targets are

1:12:49 > 1:12:52clearly under pressure and important, but when it comes to the

1:12:52 > 1:12:57quality of cancer care, 7,000 more people are surviving cancer now than

1:12:57 > 1:13:01would have been the case three years ago. When it comes to mental health

1:13:01 > 1:13:05services, we have got a lot of work ahead of us, but access and the

1:13:05 > 1:13:09range of services are clearly improving in many important areas.

1:13:09 > 1:13:13When it comes to major trauma, the fact is you are 25% more likely to

1:13:13 > 1:13:20survive if you are knocked from your motorbike and taken to a A&E

1:13:20 > 1:13:24department now than would have been the case five years ago and we see

1:13:24 > 1:13:27many other examples of that. Clinical quality of care has been

1:13:27 > 1:13:31and it is improving.And as we have repeatedly seen for different

1:13:31 > 1:13:34service areas, there is also a growing demand in all those areas

1:13:34 > 1:13:40and that is one of the challenges. Before we move on, I just wanted to

1:13:40 > 1:13:46asked about this issue of the loans, the high interest rate for the

1:13:46 > 1:13:51struggling trusts, is that any real prospect of those paying back the

1:13:51 > 1:13:57loan, have you a secret plan to convert it to a

1:13:58 > 1:14:01So, the 6% rate which we have touched on already, as part of the

1:14:01 > 1:14:10finance reset moment in 2016.The yes, yes...Way in which it works,

1:14:10 > 1:14:13trusts in special financial measures...The question was, you

1:14:13 > 1:14:17think those that... Will they realistically be able to pay back,

1:14:17 > 1:14:21the struggling ones, will they realistically be able to pay back?

1:14:21 > 1:14:26Two trusts have exited financial special measures, refinancing at a

1:14:26 > 1:14:30lower rate as part of the incentive to sign up to a recovery plan, and

1:14:30 > 1:14:34then deliver it. Of the 12 trusts currently in financial special

1:14:34 > 1:14:39measures, eight who have shown at least three months worth of

1:14:39 > 1:14:43improvement against the plan are now being financed at a lower rate, and

1:14:43 > 1:14:53only four still attracting the 6% rate for new borrowing.Meat back as

1:14:53 > 1:15:05as we have said, it is something we will review.Is it working?If we

1:15:05 > 1:15:08look at the amount of distressed loans given to some of our largest

1:15:08 > 1:15:14trusts, in the hundreds of millions of pounds, at that level, as part of

1:15:14 > 1:15:17a look at this that we have committed to, it would be absolutely

1:15:17 > 1:15:20right to consider the rate of interest and the nature of the

1:15:20 > 1:15:24financing. When trusts effectively need the financing so that they can

1:15:24 > 1:15:31pay staff and pay their bills.Yes. I think it is a legitimate question

1:15:31 > 1:15:33about the ability to repay the principal as well as the interest

1:15:33 > 1:15:38rate, I don't think people enter into those loans without cause, and

1:15:38 > 1:15:40I think we need to have that conversation that we all committed

1:15:40 > 1:15:49to doing.This only affects at trust level and system level, the amount

1:15:49 > 1:15:58we raise in interest... It is robbing Peter to pay Paul.It was

1:15:58 > 1:16:04introduced as part of that package, to try to create the right incentive

1:16:04 > 1:16:08for individual trusts.It seems to be working, except those...

1:16:10 > 1:16:17On the same point of robbing Peter to table, will you have trusts --

1:16:17 > 1:16:22where you have trusts not meeting their transfer targets, they are

1:16:22 > 1:16:25fined by the clinical commissioning groups, in the case of my trust,

1:16:25 > 1:16:29which is in financial special measures, that will add almost 10

1:16:29 > 1:16:34million on to the 60 million deficit. Given that, how do you see

1:16:34 > 1:16:37finding those sort of hospitals as being either transformative or

1:16:37 > 1:16:45sustainable?That is why we are not doing that.You are.We have said

1:16:45 > 1:16:54that, the bulk of fines were waved, this year, for trusts who are in

1:16:54 > 1:16:57receipt of the exceptional control total, and next year from the 1st of

1:16:57 > 1:17:03April, are essentially all, except for a very small number of items

1:17:03 > 1:17:07which don't include the ones you mentioned, they will be waived for

1:17:07 > 1:17:12trusts in receipt, who signed up for control totals, so that is the fact

1:17:12 > 1:17:18of the matter.How has that been communicated to the clinical

1:17:18 > 1:17:23committee group? North Staffordshire have budgeted in their budget for

1:17:23 > 1:17:30next year, to receive those fines, as part of... For the missed

1:17:30 > 1:17:35Accident and Emergency...Well then... Well then, they need to

1:17:35 > 1:17:41study the 18/19 refreshed planning guidance and indeed, the draft

1:17:41 > 1:17:45consultation on the amendments to the NHS standard contract, both of

1:17:45 > 1:17:49which make the point that I have just set out clear.Excellent, thank

1:17:49 > 1:17:50you.

1:17:55 > 1:18:00It seems to me that key to both sustainability and transformation of

1:18:00 > 1:18:04the NHS is the success of the integrated care model, now this

1:18:04 > 1:18:10involves a whole load of people working together, GPs, pharmacies,

1:18:10 > 1:18:15community beds, acute services, social care services. When we tried

1:18:15 > 1:18:17this in West Sussex, western Sussex Hospital trust, only one of those

1:18:17 > 1:18:24parties signed up to move to an integrated care model. So the change

1:18:24 > 1:18:30management of these organisations working together is massive. And

1:18:30 > 1:18:33these are organisations that are not known for dealing with change

1:18:33 > 1:18:37management challenges in the best way, so what mechanisms do you have

1:18:37 > 1:18:42to make sure that that key to the success is one that you can use.

1:18:48 > 1:18:52I think it is absolutely right that we need to integrate services, that

1:18:52 > 1:18:56is something that is increasingly recognised right across the NHS. We

1:18:56 > 1:19:02have our role to play in helping that happen, so I think it is

1:19:02 > 1:19:05absolutely right that working with colleagues in NHS England, we have a

1:19:05 > 1:19:10system control totals with the ten integrated care systems that are

1:19:10 > 1:19:16likely looking to go live on the 1st of April, and that will give them an

1:19:16 > 1:19:23opportunity to respond to new models of patient care, with new financial

1:19:23 > 1:19:26incentives, incentive to collaborate and work together, rather than to

1:19:26 > 1:19:31compete and protect different budgets. I think that will be

1:19:31 > 1:19:34incredibly helpful. It is interesting that in addition to

1:19:34 > 1:19:40those ten, there is enthusiasm from across the country about joining in

1:19:40 > 1:19:46and participating in integrated care systems going forward. With

1:19:46 > 1:19:52colleagues again in NHS England, we have invited patches of hospitals,

1:19:52 > 1:19:54community services, mental health providers and commissioners that

1:19:54 > 1:19:59want to go on this important integration journey to apply to us,

1:19:59 > 1:20:02and then we will do what we can to support them in that. I think it is

1:20:02 > 1:20:09also fair to say that we are looking at the support that NHS England and

1:20:09 > 1:20:14NHS improvement give because it is really important that as the

1:20:14 > 1:20:17regulators of our respective sectors that we are working together to

1:20:17 > 1:20:21support integrated care.We will come onto this later, something we

1:20:21 > 1:20:26want to talk about is the role of the regulators and how you integrate

1:20:26 > 1:20:29nationally, that is certainly an issue. Going back to Bridget

1:20:29 > 1:20:33Phillips, and then some of these issues. More broadly, how do we

1:20:33 > 1:20:38shift the NHS from the short-term survival we are talking about,

1:20:38 > 1:20:40getting through financially, to some of the longer term transformation

1:20:40 > 1:20:48that we need to see? How do we move away from the short-term is, to some

1:20:48 > 1:20:56long-term challenges that we face? -- short termism.We need to do both

1:20:56 > 1:21:00at once, the short-term needs attending to as much as future

1:21:00 > 1:21:03proofing and to be here and now about it, the amount of effort that

1:21:03 > 1:21:09has been brilliantly going on across the NHS even over the course of the

1:21:09 > 1:21:12last week with the appalling weather in different parts of the country,

1:21:12 > 1:21:17we have seen that, I publicly praised staff in Sunderland on

1:21:17 > 1:21:20Friday, for having come in and stayed overnight in the hospital to

1:21:20 > 1:21:24be there for the next day shifts, and we have had issues with getting

1:21:24 > 1:21:30staff into work, volunteers helping, the army, the health services. The

1:21:30 > 1:21:33health service has performed very well indeed under these trying

1:21:33 > 1:21:36circumstances, that does not happen by accident, that is the consequence

1:21:36 > 1:21:41of a lot of focus by ward nurse managers, clinical directors,

1:21:41 > 1:21:48hospital Chief Executives, and...We acknowledge that.I don't want to

1:21:48 > 1:21:54decry the operational realities.How can these longer-term challenges be

1:21:54 > 1:21:58used to address the short-term challenges, we talk about moving

1:21:58 > 1:22:02care out of hospital into the community, achieving it is far more

1:22:02 > 1:22:06difficult, will it deliver savings, what are the savings that can be

1:22:06 > 1:22:14delivered, are they sufficient? There are some tensions and

1:22:14 > 1:22:17trade-offs, of course there are, but in those parts of the country that

1:22:17 > 1:22:22have gone furthest on the service redesign and integration agenda, we

1:22:22 > 1:22:27see early signs that it is helping moderate pressure on hospitals, I

1:22:27 > 1:22:32think we will have a discussion facilitated by the NA oh, with

1:22:32 > 1:22:36yourself, on this topic, in the not too distant future, on emergency

1:22:36 > 1:22:44admissions pressure, and that has shown some of the data for the early

1:22:44 > 1:22:48Vanguard programme. -- NAO. In no sense is this mission accomplished.

1:22:48 > 1:22:53Part of the country are showing what it looks like but big changes will

1:22:53 > 1:22:57happen everywhere, one of the things is while supporting individual GP

1:22:57 > 1:23:03practices we must have much more networking between practices on a 30

1:23:03 > 1:23:07to 50,000 population basis, more support into care homes and

1:23:07 > 1:23:09Sunderland and the north-east have done a good job in showing what that

1:23:09 > 1:23:15looks like, we will be expanding the funding for clinical pharmacist in

1:23:15 > 1:23:18care homes, to help reduce the emergency hospitalisation rate for

1:23:18 > 1:23:23people there. We have a big programme underway to join up what

1:23:23 > 1:23:26is happening in community mental health services and community

1:23:26 > 1:23:30physical health services. At a national level, we know what the

1:23:30 > 1:23:36shape of this looks like but in practice, it is going to be

1:23:36 > 1:23:41different in West Suffolk than it is in Sunderland, but that is what the

1:23:41 > 1:23:45IACS, integrated care system, are all about, driving the change with

1:23:45 > 1:23:49hearts and minds of local people and clinicians in each part of the

1:23:49 > 1:23:54country. -- ICS.Where do managers grow more quickly than funding will

1:23:54 > 1:23:58allow, what action can be taken to manage some of the demand?For next

1:23:58 > 1:24:04year, we said that certain things cannot be used as a balancing item,

1:24:04 > 1:24:10NHS England board publicly in November and then again in February

1:24:10 > 1:24:20said that looking for Rafael would do next year, we are ranked, a

1:24:20 > 1:24:25series of reality is that the NHS had to get right. First, acknowledge

1:24:25 > 1:24:30that services are being delivered which are in a sense and funded, and

1:24:30 > 1:24:35that is why the extra money for next year, we have allocated just over £1

1:24:35 > 1:24:39billion to both the trust provider sustainability fund and the

1:24:39 > 1:24:47equivalent fund deficit CCG 's. Second, we said that funding

1:24:47 > 1:24:51realistic levels of activity growth next year is going to be important,

1:24:51 > 1:24:57and we will kick the tires more vigorously between NHS England and

1:24:57 > 1:25:01NHS improvement on what those capacity plans look like in every

1:25:01 > 1:25:06part of the country. Thirdly, we said, we did not see where there

1:25:06 > 1:25:09were financial pressures they should be balanced on a bag of mental

1:25:09 > 1:25:12health all cancer care of primary care services, and went further and

1:25:12 > 1:25:16said that we were making it a requirement that every CCG next year

1:25:16 > 1:25:21increases mental health spending faster than its overall funding

1:25:21 > 1:25:26growth, and that will be subject to independent external audit.

1:25:26 > 1:25:32Fourthly, we are looking to expand the amount of routine surgery that

1:25:32 > 1:25:37is being funded in the NHS next year, and lastly, we said that the

1:25:37 > 1:25:42much deserved pay rises for NHS staff would have to be funded

1:25:42 > 1:25:44separately, the government has accepted that, rather than being the

1:25:44 > 1:25:51first call going in next year. All of that is the context within which

1:25:51 > 1:25:54people are committed making those judgments.Funding routine

1:25:54 > 1:25:59surgeries, you are making a statement that... Some of... Clean

1:25:59 > 1:26:03operation, hip replacements, private hospitals provide that because it is

1:26:03 > 1:26:07an easy thing for them to provide, funded by the NHS, are you saying

1:26:07 > 1:26:12those will go back into provide bulk income for some NHS hospitals?What

1:26:12 > 1:26:18we're saying is, as a result of where we ended up in discussions

1:26:18 > 1:26:25with the Department of Health and other branches of government, we are

1:26:25 > 1:26:30able to have funding expectation that we will have a bigger increase

1:26:30 > 1:26:35in operations next year, than we had this year, as it happens, we expect

1:26:35 > 1:26:39that it is likely that the majority of those will be delivered by NHS

1:26:39 > 1:26:45hospitals... But we are not changing the policy. The point is, the amount

1:26:45 > 1:26:49of, the funding increase for elective care should be greater next

1:26:49 > 1:26:54year than this year.More operations taking place?At a faster rate of

1:26:54 > 1:27:02growth.What impact do you think the changes may have on NHS finances,

1:27:02 > 1:27:06have you got any up-to-date assessment on that?The fifth

1:27:06 > 1:27:10principle I set out, which I think the Chancellor had accepted in his

1:27:10 > 1:27:19budget at the end of November, November 22, was that in exchange

1:27:19 > 1:27:23for reforms around the agenda for change group, government rather than

1:27:23 > 1:27:29the NHS would pick up the tab for the cost. That is what the

1:27:29 > 1:27:37government has said.Finally, in terms of the great role that you

1:27:37 > 1:27:43anticipate for primary and community care, and so on. How likely is it

1:27:43 > 1:27:47that the savings you want to make can be achieved without additional

1:27:47 > 1:27:51resource in, they talk a lot in the report that change and

1:27:51 > 1:27:54transformation to deliver some of those savings in the short-term can

1:27:54 > 1:28:01cost money. We all want these savings to happen, both in terms of

1:28:01 > 1:28:05more effective care but also more money wasted, but how do we get it

1:28:05 > 1:28:10right so that we deliver the savings which we want to say?I think there

1:28:10 > 1:28:15is a genuine pressure here, and it is right to say it, and we have

1:28:15 > 1:28:19talked about it before, the fact is that under, given the aggregate

1:28:19 > 1:28:27funding available to us, the pragmatic response is that we have

1:28:27 > 1:28:30two support the services that are needed in the here and now. -- we

1:28:30 > 1:28:37have to support. That means less available than might have been

1:28:37 > 1:28:42desired for extending some of these wider changes, and just to give you

1:28:42 > 1:28:48a figure for that, the men that had been spent on the vanguards, the

1:28:48 > 1:28:53place is doing the care redesign, each year of their existence, would

1:28:53 > 1:28:57have been less than one tenth of 1% of the NHS budget. It has not been a

1:28:57 > 1:28:59big investment.

1:29:06 > 1:29:11Should they be planning for reduced or growing admissions? We want to

1:29:11 > 1:29:15reduce admissions in some cases but we are seeing increasing levels of

1:29:15 > 1:29:20admission. Well that takers?Our central planning assumption for

1:29:20 > 1:29:25England for next year is that the default all the conversation starter

1:29:25 > 1:29:31in the local plan is entered into its growth of non-elective

1:29:31 > 1:29:39admissions of 2.3%. That comes with the caveat we have got this gap

1:29:39 > 1:29:46opening up between the emergencies versus the overnight emergency

1:29:46 > 1:29:52admissions growing that five, six, 7%. So we have to understand the

1:29:52 > 1:29:56dynamics of that in each part of the country. But realistically, with the

1:29:56 > 1:30:02growing in ageing population, with pressures we know about in social

1:30:02 > 1:30:07care, with GP numbers down and not up, we should be planning on the

1:30:07 > 1:30:11basis that going to continue to be pressures in the hospital part of

1:30:11 > 1:30:17the system that needs to be resourced.Which then continues the

1:30:17 > 1:30:22cycle of A&E problems, needing to put money at the front end because

1:30:22 > 1:30:27these problems seem to kind of continue on a cycle.Yes, except

1:30:27 > 1:30:33that compared with France or Germany, we do a superb job of

1:30:33 > 1:30:40looking after people at home. Emergency hospitalisation rates for

1:30:40 > 1:30:45many common conditions is lower than that of other comparable countries.

1:30:45 > 1:30:50Your chance of being admitted to hospital as an emergency patient is

1:30:50 > 1:30:55against being looked after at home by your GP, your chance has gone

1:30:55 > 1:31:00down by 12% over the last five years. So there is a lot that is

1:31:00 > 1:31:03working well, notwithstanding those underlying long-term pressures you

1:31:03 > 1:31:12rightly point to. We are on a journey and I am not

1:31:12 > 1:31:17quite sure where we are going. We started out the concept of STPs.

1:31:17 > 1:31:27Perhaps we should stay in -- we should say that is a sustainable

1:31:27 > 1:31:31transport -- transport plan.That morphed into something which is not

1:31:31 > 1:31:37a fixed hard plan but a staging post. Now we have got these very

1:31:37 > 1:31:41different accountable care systems and the totally devolved systems.

1:31:41 > 1:31:46You say a number of these, ten, they will go live in April this year. So

1:31:46 > 1:31:50I am totally confused, what is the difference? I understood we have

1:31:50 > 1:31:57STPs. And we have a number of different bodies going in different

1:31:57 > 1:32:01directions, what is the endgame, what are they going to look like in

1:32:01 > 1:32:08April 2018?If you go back three or four years, the landscape locally

1:32:08 > 1:32:12across the NHS was of individual hospital trusts, individual

1:32:12 > 1:32:16community trust and mental health trusts and GP practices ploughing

1:32:16 > 1:32:22their own 40 and the expectation was the combined effect of all that

1:32:22 > 1:32:27ploughing was a beautiful field. What we have now done is to say, can

1:32:27 > 1:32:33we gather round and discuss the crops we need to grow for the people

1:32:33 > 1:32:44in this area? I'm going to stop now! We all know this is about

1:32:44 > 1:32:50integration. What is it going to look like?What has changed is, we

1:32:50 > 1:32:54have won a big argument about the clinical logic, the patient budget,

1:32:54 > 1:32:59the economic logic for taking a holistic population view of health

1:32:59 > 1:33:04in a given geography, countercultural to over two decades

1:33:04 > 1:33:09worth of how the health service has worked. What STPs were, they were

1:33:09 > 1:33:12the Marc Warren version of getting people round a table to have the

1:33:12 > 1:33:20conversation. -- they were the marketable version. And the new

1:33:20 > 1:33:23partnership arrangements across health and social governments are

1:33:23 > 1:33:27laying the foundations for more strategic systemwide planning and

1:33:27 > 1:33:33delivery. That is what has happened everywhere, the 44. For ten parts of

1:33:33 > 1:33:36the country covering 10 million people, they are more intensively

1:33:36 > 1:33:42saying, we are going to show the system financial incentives, we are

1:33:42 > 1:33:48going to get on with the process of care integration, the health

1:33:48 > 1:33:54committee...What they actually doing?I invite this committee to do

1:33:54 > 1:33:58what the Health Select Committee did within the last fortnight, to spend

1:33:58 > 1:34:04a day in South Yorkshire talking to patients and local authorities,

1:34:04 > 1:34:08talking to GPs and hospital doctors and finding out what it means in

1:34:08 > 1:34:11Doncaster, what it means in Sheffield. And that would make it

1:34:11 > 1:34:16very practical for you.Absolutely right, but it is very difficult to

1:34:16 > 1:34:20find the time to invest in all of that. So I am asking you as you

1:34:20 > 1:34:26clearly have the time because that is your job to look at this, my

1:34:26 > 1:34:29concern is that the concept of the sustainable transformation

1:34:29 > 1:34:32partnerships has become just a bureaucracy. Instead of trying to

1:34:32 > 1:34:35simplify it, you have effectively got a number of bits and you are

1:34:35 > 1:34:40trying to force them together, but you will not have one budget and one

1:34:40 > 1:34:43set of accountability is because they still have that accountability

1:34:43 > 1:34:48to your organisation.And with regards to local authorities. It

1:34:48 > 1:34:52does not change the law, they still have individual accountability is as

1:34:52 > 1:34:57you describe. Over and above that, they have a shared and common

1:34:57 > 1:35:00interest in charting a course for health improvement in their area and

1:35:00 > 1:35:06I don't think there is a contradiction.We are talking about

1:35:06 > 1:35:10goodwill, isn't it?Relationships. And relationships take time, don't

1:35:10 > 1:35:19they? Yes. So what is it about those ten that is different to the

1:35:19 > 1:35:25remaining eight -44?Some of them have been on that journey together

1:35:25 > 1:35:33for longer. That is your point about time. Some of them have got a few

1:35:33 > 1:35:37different organisations in the area and the report has a chart showing

1:35:37 > 1:35:41some of the STPs have got a very large number of entities within

1:35:41 > 1:35:48them. At one end of the spectrum, you have got East, North and West

1:35:48 > 1:35:53Cumbria which is something like five statutory bodies, that was the bar

1:35:53 > 1:36:02chart which shows the fewest. And at the other, the chart has got... What

1:36:02 > 1:36:14I think is... Cheshire and Merseyside. 42. 42 statutory bodies.

1:36:14 > 1:36:17So Cheshire, within Cheshire and Merseyside, that is a much more

1:36:17 > 1:36:25complex task.But the two that going to be the devolved systems of

1:36:25 > 1:36:28Greater Manchester and sorry Harpers, is that right?And a number

1:36:28 > 1:36:37of others, South Yorkshire, the Thames.So all ten, not eight and

1:36:37 > 1:36:42two, they are heading in the same direction?They are beginning to act

1:36:42 > 1:36:46together taking system shared responsibility, yes.But what is

1:36:46 > 1:36:51going to be the difference from the patient's perspective and what are

1:36:51 > 1:36:56we learning from those ten that should be shared with the remainder?

1:36:56 > 1:37:00The difference is not going to affect every patient, it is going to

1:37:00 > 1:37:04affect a group of patients, principally the people who are, who

1:37:04 > 1:37:09have the greatest needs for NHS use, and they are going to find more

1:37:09 > 1:37:13teamwork, less being passed from pillar to post and having to repeat

1:37:13 > 1:37:17your information when you are sitting down in front of a nurse, or

1:37:17 > 1:37:21a doctor. A lower likelihood of ending up in hospital for a

1:37:21 > 1:37:24preventable condition. And the data shows from the places that have done

1:37:24 > 1:37:29this first, those are the results they are getting.What is the data

1:37:29 > 1:37:34you're going to be collecting to demonstrate from a patient

1:37:34 > 1:37:37perspective, not just a finance perspective, you are delivering what

1:37:37 > 1:37:45you set out to deliver.In all 44 areas of the country, we will be

1:37:45 > 1:37:50publishing for the second year running the overview of how well

1:37:50 > 1:37:56they are doing on that early cancer diagnosis, on access to new mental

1:37:56 > 1:38:00health services. How easy it is to get a GP appointment. How easy it is

1:38:00 > 1:38:05to be looked after evenings and weekends. How well, how quickly you

1:38:05 > 1:38:12get a routine operation. What the access experience is if you need to

1:38:12 > 1:38:18go to A&E. All of those measures I think the public would readily see

1:38:18 > 1:38:24as being very important to the NHS will be published for all 44 STPs.

1:38:24 > 1:38:33One of the answers you gave to Mr Philipson, he said, we talked about

1:38:33 > 1:38:37transformation, but it is now about sustainability.That was just for

1:38:37 > 1:38:42the 1.8 billion funding going to the trust sector specifically. Not about

1:38:42 > 1:38:48the NHS budget in total, that 1.8 billion.These are also about

1:38:48 > 1:38:54transformation is, is the plan not transformation rather than just...

1:38:54 > 1:38:59Not just for the 2.4 billion going into the provider sustainability

1:38:59 > 1:39:03fund, that is what it says on the tin. Provide a sustainability.When

1:39:03 > 1:39:11we set out the STPs, the point was to transform care and not just

1:39:11 > 1:39:16sustain care. The measures you have set out to measure success, they are

1:39:16 > 1:39:20very much about how much of what we already offer people are getting and

1:39:20 > 1:39:24how fast they are getting it. The bit missing is a vanguard work.

1:39:24 > 1:39:29There has been a lot of vanguard work that does not seem to be doing

1:39:29 > 1:39:35best being shared. You approach would was very much, it is there if

1:39:35 > 1:39:41they cared to find it, to which, I said, have you not got to push?

1:39:41 > 1:39:44These are busy people and unless you do push, they will never make the

1:39:44 > 1:39:51changes.I think the level of pressure we have in the system,

1:39:51 > 1:39:54people are very eager to find out what it is other parts of the

1:39:54 > 1:39:57country have done that moderating the emergency pressures on

1:39:57 > 1:40:05hospitals. Improving the care people with. Improving your chance of

1:40:05 > 1:40:08having your cancer picked up at an early stage when it is possible to

1:40:08 > 1:40:12give you treatments such that you will do well. So all of those that

1:40:12 > 1:40:16are part of these programmes I think are now being laid across the

1:40:16 > 1:40:22country. And some of the programmes referred to in the report

1:40:22 > 1:40:24specifically about holding up a mirror to each part of the country

1:40:24 > 1:40:29and saying, how do you compare and where'd you learn? And this is where

1:40:29 > 1:40:35you find the practice.With respect, I am still not convinced the

1:40:35 > 1:40:40vanguard has been dissected. And really being used by some of these

1:40:40 > 1:40:45new organisations. What you're talking about, I fear, is still very

1:40:45 > 1:40:53much, how'd you improve the care for challenges we already have, for

1:40:53 > 1:40:58illnesses we are already aware of? It does not seem you are talking

1:40:58 > 1:41:03about the challenges in the rural community. You have many more people

1:41:03 > 1:41:07living over 85. Generally, they come into the population at 65 and they

1:41:07 > 1:41:11can move to rural areas to retire. You need a very different form of

1:41:11 > 1:41:17care. You have challenges about foot fault into the different types of

1:41:17 > 1:41:20care entities, to make sure professionals keep up their

1:41:20 > 1:41:24training. I am not hearing about how you might adjust and develop the

1:41:24 > 1:41:30fundamental model so it is fit for purpose whether you up urban oral.

1:41:30 > 1:41:38So if we talk about Dorset and Somerset, in the case of Dorset,

1:41:38 > 1:41:42they are doing a fine job for a population outside of Bournemouth

1:41:42 > 1:41:50which has got very rural elements to the county. I can send you people

1:41:50 > 1:41:54from Dorset to meet with you because hearing from them first hand about

1:41:54 > 1:41:58what they are doing and how they are doing it and the results are getting

1:41:58 > 1:42:01would really definitively answer your questions.That would be

1:42:01 > 1:42:05helpful, that is just one, we have 44, what is your plan to help all

1:42:05 > 1:42:1144?You were talking specifically about rural areas.There must be

1:42:11 > 1:42:18other learning from other STPs, these new system organisations,

1:42:18 > 1:42:22which could and should be shared because of the particular similarity

1:42:22 > 1:42:27between the different classes across the 44.Is that happening? Yes, to

1:42:27 > 1:42:33some extent, but I am not going to say... Go back to Bridget's

1:42:33 > 1:42:37question, a lot of people are doing with the here and now and they are

1:42:37 > 1:42:41also busy people and not touring the country on a fact-finding mission so

1:42:41 > 1:42:45people are doing both at the same time.

1:42:45 > 1:42:49Anyone who has had experience of the NHS can see there are issues and

1:42:49 > 1:42:54challenges in the system.You have staff and it does not always hang

1:42:54 > 1:42:59together as well as it could, but for a lot of people, it is heads

1:42:59 > 1:43:04down hearing another initiative, again and you have regulators and

1:43:04 > 1:43:07NHS improvement, you'll got you and the Department issuing edicts about

1:43:07 > 1:43:13money and other things. You have all that not interacting very well on

1:43:13 > 1:43:17the ground. At the senior level, you have hospital managers and health

1:43:17 > 1:43:19managers trying to balance the different demands of different

1:43:19 > 1:43:24regulators. Different funders. And as well as than at the junior level,

1:43:24 > 1:43:29that comes down to a more junior level many more initiatives they

1:43:29 > 1:43:32have to learn about and take on board which cuts into what Miss

1:43:32 > 1:43:38Morris is saying. You have the grand plan but on the ground, how'd you

1:43:38 > 1:43:42deliver? So can you answer how you called innate your work to make sure

1:43:42 > 1:43:55you are not making competing demands for people lower down the system?

1:43:55 > 1:43:59Shore, and Ian and Chris may come in on this, there is a danger of a

1:43:59 > 1:44:06slight contradiction here, on the one hand, you need to be more direct

1:44:06 > 1:44:08nationally about banging heads together to make sure they learn. --

1:44:08 > 1:44:16sure.No, no, no, let me be specific, no, my question... My

1:44:16 > 1:44:21question is, sometimes guidance that comes down requires one set of

1:44:21 > 1:44:28activity by one part of the system and... For example, the billing

1:44:28 > 1:44:34arrangements, billing CCGs or not and how you do that, you have one

1:44:34 > 1:44:37thing asking for one thing and another saying you will do it

1:44:37 > 1:44:42differently, and a complete clash, in one individual, in a trust, you

1:44:42 > 1:44:45have to balance different advice, or guidance, from different parts of

1:44:45 > 1:44:50the system, how do you make sure you are working to make sure what Ms

1:44:50 > 1:44:57Morris says will not happen.In one case, France and is -- for instance,

1:44:57 > 1:45:00they are devolving to a situation where they take shared

1:45:00 > 1:45:05responsibility for the NHS funding available in Dorset, and are able to

1:45:05 > 1:45:08redesign care themselves. That will take out a lot of the transactional

1:45:08 > 1:45:12hassle between different parts of the system but in order to be able

1:45:12 > 1:45:17to take on that responsibility, you need to be working in a coherent

1:45:17 > 1:45:21fashion between the various organisations involved, which is why

1:45:21 > 1:45:23this is an evolutionary journey which cannot proceed at the same

1:45:23 > 1:45:29pace in every part of the country but it is a developmental journey,

1:45:29 > 1:45:33to support that, NHS improvement and NHS England have got to work

1:45:33 > 1:45:39together in a different way and I think that we are on course to do

1:45:39 > 1:45:45that and the discussions that Ian and I with our teams are having at

1:45:45 > 1:45:49the end of March and public board meetings, will be setting it out,

1:45:49 > 1:45:53will show that in the confines of the statute and the distinctive

1:45:53 > 1:45:58responsibilities that Parliament was assigned to monitor and the one hand

1:45:58 > 1:46:00with NHS England and the other, within that you will see much more

1:46:00 > 1:46:12join up between work regionally and nationally.In the winter, it was

1:46:12 > 1:46:24almost entirely joint, but it is very difficult to have a completely

1:46:24 > 1:46:28clear and single message all of the time and in the case of some of the

1:46:28 > 1:46:31regulators, we set them up specifically not to do that.

1:46:31 > 1:46:38Seek you see is there to give an independent assessment of quality,

1:46:38 > 1:46:43including giving the government and the NHS tough messages when it needs

1:46:43 > 1:46:50it. -- CQC. And we guard their independence extremely jealously. We

1:46:50 > 1:46:56work together very closely with regulators about seeking to ensure

1:46:56 > 1:47:06that improvement work led by NHS I fits and lands with the system of

1:47:06 > 1:47:11CTC but we keep them separate for a very important reason, it is we

1:47:11 > 1:47:17value them. -- CQC. There are some tensions but here, as we do in

1:47:17 > 1:47:21schools and prisons and lots of other public services, having an

1:47:21 > 1:47:25independent regulator which can say what it likes, regardless of what

1:47:25 > 1:47:34the three of us think, is a good thing or a bad thing.Can I ask, if

1:47:34 > 1:47:38I was to be really cynical, this move towards integration without

1:47:38 > 1:47:40changing job descriptions, job titles or budgets, could be seen as

1:47:40 > 1:47:48a way of getting a change in the health system through the back door,

1:47:48 > 1:47:53as anybody had a go at any of you individual organisations,

1:47:53 > 1:47:56particularly the STPs, a judicial review, anything, to say, and on a

1:47:56 > 1:48:05minute, is what you are doing really really within the law?Yes, I'm not

1:48:05 > 1:48:10going to comment in detail, given these matters are a matter for the

1:48:10 > 1:48:17courts, but there are judicial review is currently pending, and

1:48:17 > 1:48:22that will bring clarity based on what the courts decide. -- judicial

1:48:22 > 1:48:27reviews.It could derail the whole thing?The claim that is being made

1:48:27 > 1:48:39is that 2012 acts prevents joined up working and integration as expressed

1:48:39 > 1:48:46through a particular approach to varying the NHS standard contract

1:48:46 > 1:48:52for something called ACOs and that is the records to be clear with us.

1:48:52 > 1:48:59If the courts say the approach taken is consistent with legislation, then

1:48:59 > 1:49:03I hope everyone will accept that. Then the ball will be in

1:49:03 > 1:49:08Parliament's court. If that is the direction in which the NHS should be

1:49:08 > 1:49:13headed.If that happened, would you be recommending that he should be

1:49:13 > 1:49:17recommending to the Minister that instead of trying to go through a

1:49:17 > 1:49:21reformation in the back door, you should be doing it publicly, and the

1:49:21 > 1:49:27great Richard Garbett want it and needed.We are doing it publicly, we

1:49:27 > 1:49:31have been explicit about the benefits of joining up services and

1:49:31 > 1:49:35by the way we are not the only country for whom that is true, when

1:49:35 > 1:49:42the NHS was formed in 1948, it was formed on the basis of brief

1:49:42 > 1:49:47encounters. Between patients and their doctors. Now, we need a steady

1:49:47 > 1:49:51relationships based on the fact that we have people with long-term

1:49:51 > 1:49:56conditions...LAUGHTER Mr Stevens, that is a lovely story,

1:49:56 > 1:49:59and you are absolutely right in where we want to go but by the sound

1:49:59 > 1:50:05of it, we are all in agreement that there are many barriers and at some

1:50:05 > 1:50:12point we will have to remove them, because it takes time...Less

1:50:12 > 1:50:15tinder, more stable relationships.I don't know what the concept is that

1:50:15 > 1:50:22you are referring to.What I would add is, the history of the NHS has

1:50:22 > 1:50:29not been short of reorganisations(!) and the key thing about this and the

1:50:29 > 1:50:34integrated care systems that Simon is describing, one of the important

1:50:34 > 1:50:40things is we are not trying to change the statutory basis with

1:50:40 > 1:50:43organisations or accountabilities, those will remain exactly as they

1:50:43 > 1:50:49are, the focus is on how do all those people work together, as

1:50:49 > 1:50:55opposed to can we redraw the map of the NHS so that it in some way works

1:50:55 > 1:51:00better.I totally understand that, entirely the answer I would expect

1:51:00 > 1:51:04from you, and I am not in the least bit surprised but it does not help

1:51:04 > 1:51:12us move forward. Does not help us in terms of the overall agenda, which

1:51:12 > 1:51:16is about transformation, not just simply staying within the law,

1:51:16 > 1:51:22important or as crucial as that may be.To be clear, obviously we have

1:51:22 > 1:51:29to stay within the law, what we are saying is, rather than spending

1:51:29 > 1:51:33another several years, redrawing the map of the NHS, can we get on with

1:51:33 > 1:51:38the very important clinically led discussions about how professionals

1:51:38 > 1:51:43relate to each other, as opposed to redrawing the map of the NHS,

1:51:43 > 1:51:48because most of the things we are describing as transformation come

1:51:48 > 1:51:53down to how clinicians and others relate to each other, not the

1:51:53 > 1:51:56organisations that they sit within, you mention the vanguards, that is

1:51:56 > 1:52:02exactly what they found, so much that is your own question, back to

1:52:02 > 1:52:06your own question, it is all about can we get the right types of

1:52:06 > 1:52:09behaviour and good practice in the system as opposed to worrying about

1:52:09 > 1:52:16who sits in which organisation when it comes up.That is about culture

1:52:16 > 1:52:19change, which has always been something difficult to change but

1:52:19 > 1:52:26can I take you away from the ten, you seem to have achieved much of

1:52:26 > 1:52:31this, to the remainder, they seem to be penalised for not having achieved

1:52:31 > 1:52:36the best plan which meets financial criteria, for many of them, it seems

1:52:36 > 1:52:39to me, the challenge is, they are trying to do the impossible with

1:52:39 > 1:52:44insufficient funds, to say, you have got to save even more, will not help

1:52:44 > 1:52:52deliver anything.As Ian said earlier, we are inviting the next

1:52:52 > 1:53:01group around the country to come and join the liberated zone.How will

1:53:01 > 1:53:05you help them do that, is it clear there is any commonality between

1:53:05 > 1:53:09those who have succeeded being in the top ten and those who have not,

1:53:09 > 1:53:12from what you said, maybe it is the time they have been working

1:53:12 > 1:53:16together, in which case, not much that can be done about it but if

1:53:16 > 1:53:19there is something like historic underfunding, if I can for one

1:53:19 > 1:53:24minute alludes to the standard fun formula, and this is true not just

1:53:24 > 1:53:28for health but for education and many other sectors, those generally

1:53:28 > 1:53:35agreed to be underfunding if you compare urban with law, and more of

1:53:35 > 1:53:39the rural STPs if I can pull them that seemed to be at the bottom of

1:53:39 > 1:53:47the list. -- if I can call them that. As opposed to the urban ones.

1:53:47 > 1:53:50-- compare urban withdrawal. What can you tell us about them, when you

1:53:50 > 1:53:54set objectives and targets, you have taken into account historic mismatch

1:53:54 > 1:54:00and underfunding, if we look into the future, surely we should take

1:54:00 > 1:54:04this opportunity to level the playing field and give people

1:54:04 > 1:54:10reasonable targets?We must not conflate a question about the

1:54:10 > 1:54:14aggregate funding available for the health service with questions about

1:54:14 > 1:54:18its zero-sum distribution between parts of the health service

1:54:18 > 1:54:23geography in the health service, on the second question, I am afraid, I

1:54:23 > 1:54:33have two... The way in which money is allocated to different parts of

1:54:33 > 1:54:36the country is now the fairest it has ever been in the history of the

1:54:36 > 1:54:41National Health Service and certainly fairer than at any year

1:54:41 > 1:54:45since 1976, when our predecessors first went down this route. Through

1:54:45 > 1:54:49the resource allocations working party. Reason I feel confident in

1:54:49 > 1:54:54saying that, we have an independent committee, which looks at needs

1:54:54 > 1:54:58allocations and have specifically looked at incremental cost of

1:54:58 > 1:55:06sparsity and relative. With a high population chairman, and the costs

1:55:06 > 1:55:13that go with that. Over and above that, we have now not just applied

1:55:13 > 1:55:17that fair funding formula to hospital and community health

1:55:17 > 1:55:22services, we have done so to primary care services and also to

1:55:22 > 1:55:29specialised hospital services and as a result, no CCG is more than 5%

1:55:29 > 1:55:33below its fair funding formula, not just for the hospital and community

1:55:33 > 1:55:37health services but for primary care and for spending in the round. I

1:55:37 > 1:55:43don't think that, to use one of the favourite labels, this is a question

1:55:43 > 1:55:52of going robbing Peter, in this case, chair, you, in order to

1:55:52 > 1:55:55benefit you, which is the arguing you are making. This would be a

1:55:55 > 1:55:58question of the aggregate funding available for the health service in

1:55:58 > 1:56:05the round.This is maybe the subject for a wider discussion. Perhaps we

1:56:05 > 1:56:14can move along.It will boil down to, your area versus that area, and

1:56:14 > 1:56:18as far as I can tell, we are being as objective as we can be about the

1:56:18 > 1:56:23allocation. There is a related question that we are going to start

1:56:23 > 1:56:27lifting the stones and having a look at, which is for those parts of the

1:56:27 > 1:56:33country who are getting extra funding, the extra health and

1:56:33 > 1:56:36qualities adjustments we make, how are those resources being made. --

1:56:36 > 1:56:43used. There is disturbing data emerging around life expectancy

1:56:43 > 1:56:48trendss. So, we really want to understand whether those extra funds

1:56:48 > 1:56:53in parts of the country such as the north-east are being used for things

1:56:53 > 1:57:02that would be likely to improve health and reduce inequalitys or

1:57:02 > 1:57:06just being used for the gnarly utilisation of services rather than

1:57:06 > 1:57:17going upstream. -- vanilla.This is a much bigger topic, and it will

1:57:17 > 1:57:20come as no surprise to you that I do not necessarily agree that some of

1:57:20 > 1:57:27those materials being used are fit for purpose, so let's go back to the

1:57:27 > 1:57:31integration, which is what we are also keen between us to achieve, one

1:57:31 > 1:57:36of the concerns I hear, is that the voluntary sector feel excluded, that

1:57:36 > 1:57:40the local authorities engage don't engage in a very great degree of

1:57:40 > 1:57:46variety across the country. So, given where we want to get to and

1:57:46 > 1:57:50the challenge of breaking down cultures, what are you and your

1:57:50 > 1:57:54colleagues and the rest of the department doing to actually insure

1:57:54 > 1:57:58that it is not just, if you like, talking the talk but walking the

1:57:58 > 1:58:04walk and not just across health and social care, and community care, but

1:58:04 > 1:58:07also, the other key players, in the voluntary sector, playing a huge

1:58:07 > 1:58:14role. How are you getting back ordination?I agree completely,

1:58:14 > 1:58:17there are things we can do nationally, there are things we have

1:58:17 > 1:58:20got to try to stimulate local action on, the things we can do nationally

1:58:20 > 1:58:27are ensure that the national level voluntary and community

1:58:27 > 1:58:29organisations are involved with us in the big improvement programmes we

1:58:29 > 1:58:36have across the National Health Service, that is why I have invited

1:58:36 > 1:58:40the Chief Executive of Diabetes UK to oversee the assessment process

1:58:40 > 1:58:45for how well different part of the country, CCGs, are doing on the

1:58:45 > 1:58:48diabetes element of the annual assessment framework, it is why

1:58:48 > 1:58:55Cancer Research UK, I had the chair of the task force improvement

1:58:55 > 1:59:01programme with me, it is why I have invited the chief executive of Mind

1:59:01 > 1:59:04to leave their way on mental health improvement, at a national level we

1:59:04 > 1:59:06are setting the example.

1:59:10 > 1:59:16But I think we also recognise that luckily, there are different levels

1:59:16 > 1:59:19of community assets, engagement, funding pressures, some of this is

1:59:19 > 1:59:23about the different expectations that the statutory sector and the

1:59:23 > 1:59:26voluntary sector have, so within the last several years, for example, we

1:59:26 > 1:59:30have taken a lot of bureaucracy out of being able to get funding from

1:59:30 > 1:59:35the NHS. Instead of having to do the sort of telephone directory worth of

1:59:35 > 1:59:39NHS standard contract, there is a shorter version there that can be

1:59:39 > 1:59:43used for funding with the voluntary sector. But this has been a time of

1:59:43 > 1:59:49pull-back of grants for many Fonte organisations, there's a whole local

1:59:49 > 1:59:54ecosystem, if you like, with some of the larger national organisations

1:59:54 > 2:00:02having dug representatives. -- for many voluntary organisations. Some

2:00:02 > 2:00:05smaller organisations... This takes considerable sensitivity and local

2:00:05 > 2:00:09sensitivity to get right.You're right, but do you not think yorked

2:00:09 > 2:00:15to be having a target which are then measure that further don't, not

2:00:15 > 2:00:22where you guys are sitting in London, to say, how demonstrates to

2:00:22 > 2:00:26me that you have actually engage with at least ten of your local

2:00:26 > 2:00:29charities that provide community transport, befriended, etc? It isn't

2:00:29 > 2:00:35just the paid bit of the voluntary sector, it is the unpaid bit.You

2:00:35 > 2:00:38make an important part and that is something we have been discussing as

2:00:38 > 2:00:43early as this morning, and we should try and build some of that into the

2:00:43 > 2:00:49processes we used to sort of assess and check how well STP 's are

2:00:49 > 2:00:59actually working.We have seen local government playing a bigger and

2:00:59 > 2:01:05bigger role in STP is. It is a voluntary role for them, we don't

2:01:05 > 2:01:13have powers to compel them. The big lever we have as committee has

2:01:13 > 2:01:16discussed before, the better care fund, which has upside and downside,

2:01:16 > 2:01:23one of the things it is undoubtedly do it is create a conversation which

2:01:23 > 2:01:28wasn't there before between local government and the NHS. And we've

2:01:28 > 2:01:34mentioned earlier in this hearing, when we were doing the delayed

2:01:34 > 2:01:40transport of care programme, which spans local government and the NHS,

2:01:40 > 2:01:44and I think most sides would say there was a quality of conversation

2:01:44 > 2:01:51around that that we have not seen before. There is clearly further to

2:01:51 > 2:01:54go, again, when we were discussing and last week, around how the health

2:01:54 > 2:01:58service and social care and the wider local government system work

2:01:58 > 2:02:05together, but we do think we've seen signs of progress.That's very

2:02:05 > 2:02:11encouraging, but can I then put this to you, that common working is

2:02:11 > 2:02:16extremely good but I'm beginning to look at this and say, going forward,

2:02:16 > 2:02:21there are scenes to be almost a blurring between commissioning

2:02:21 > 2:02:28providers and with the overall Government moved towards, if you

2:02:28 > 2:02:34like, decentralising and putting power in the hands of local

2:02:34 > 2:02:39divisions, are we going to get a point where, for example, there is a

2:02:39 > 2:02:50proposal in my area in the West Country, for two counties, three

2:02:50 > 2:02:53LEPs and ten local authorities to come together to provide health and

2:02:53 > 2:02:57social care. If that happens, it seems that we're totally blurred the

2:02:57 > 2:03:01distinction between commissioning and provision, which had its

2:03:01 > 2:03:04benefits, we introduced it to ensure that there was some check and

2:03:04 > 2:03:10balance. So from what we are saying, I'm a little bit confused as to what

2:03:10 > 2:03:14ultimately is going to happen with all this integration. Is there going

2:03:14 > 2:03:17to be a breakdown between commissioning and provision? And

2:03:17 > 2:03:21what is this integration going to look like in the end, how far will

2:03:21 > 2:03:27it spread?Obviously, we are not changing the law, and the health

2:03:27 > 2:03:32system and the social care system revived very different types of

2:03:32 > 2:03:38statue which does limit things in the way that you describe. When we

2:03:38 > 2:03:47see good examples of where health and care work together, it's very

2:03:47 > 2:03:51often, in fact almost exclusively, add the nuts and bolts level rather

2:03:51 > 2:03:55than the grand conceptual level. The areas that do this well share data

2:03:55 > 2:04:00well, they have a common decision-making process, they do all

2:04:00 > 2:04:09these sort of mechanics things and actually tends not to worry about

2:04:09 > 2:04:16how big the statutory divide is between services. So what we're

2:04:16 > 2:04:23encouraging is building how we do the better care programmes, can we

2:04:23 > 2:04:29tackle the issues that get in the way of good joint working? That

2:04:29 > 2:04:32doesn't deal with the bigger question you race but that is for

2:04:32 > 2:04:38another day.The simple question is who is accountable in these

2:04:38 > 2:04:40integrated care arrangements? If I have a complaint under consent to

2:04:40 > 2:04:49race, where do I go? -- and a concern to raise.The law is the

2:04:49 > 2:04:56law...But if you're patient in a court in the middle of all this, if

2:04:56 > 2:04:59you're getting all the different bits of the organisation and you

2:04:59 > 2:05:03have a problem, you're not thinking along those lines, the bureaucratic

2:05:03 > 2:05:07lines that you and we probably think about. You're trying to make a

2:05:07 > 2:05:10point, you might go and raise the concern somewhere but will that have

2:05:10 > 2:05:15an impact? Does that bit of the joining up work?You will have the

2:05:15 > 2:05:20same ability to raise complaints and concerns as you have now, because

2:05:20 > 2:05:24the formal accountabilities have not changed, but hopefully, we will have

2:05:24 > 2:05:28less reason for doing so because the quality patient experience will have

2:05:28 > 2:05:33improved.Ever the optimist. But who is ultimately accountable? The law

2:05:33 > 2:05:36has not changed, everyone has own accountabilities... Will people pass

2:05:36 > 2:05:42the buck and blame each other?By definition... I believe that we can

2:05:42 > 2:05:46dance on pinheads, but if you spent a bit of time with some parts of the

2:05:46 > 2:05:52country... You will just hear it from...We are not that bad we are

2:05:52 > 2:05:57just asking questions.It's a more practical conversation that we are

2:05:57 > 2:06:01having.We are just asking if you got plans in place to make sure, for

2:06:01 > 2:06:06instance, where accountability has not been sorted out... You paint a

2:06:06 > 2:06:12perfect...That has been lawful since 2006 under sections to five of

2:06:12 > 2:06:18the 2006 act, so that question, to be clear, there will be no change to

2:06:18 > 2:06:22the principle that NHS care has to remain free on the basis of need not

2:06:22 > 2:06:30ability to pay. -- under section 75 of the 2006 act. But all that said,

2:06:30 > 2:06:37this year, local authorities and CCG 's have voluntarily chosen to budget

2:06:37 > 2:06:40£2000 more than they were a party as part of the better care fund.I

2:06:40 > 2:06:43don't doubt that at a local level where people want to do it they can

2:06:43 > 2:06:48find a way, but what I want to know, for example, if you have an issue to

2:06:48 > 2:06:53raise in the NHS, you go to the patient advice and liaison service,

2:06:53 > 2:07:02but with integrated care, you will have several PALs, if you raise it

2:07:02 > 2:07:07in one place, with the integrated care system, would you envision it

2:07:07 > 2:07:11that that would be dealt with across all the organisations involved?I

2:07:11 > 2:07:17would hope so but your statutory rights are... That's obviously not

2:07:17 > 2:07:24the status quo, but...I know, but is that...?There are separate

2:07:24 > 2:07:27appeal rights in hospitals...But my point is, is your vision that...?

2:07:27 > 2:07:34Chun that is where we would like to get to but that will not affect your

2:07:34 > 2:07:37abilityto complain about different services...Guising a complaint, it

2:07:37 > 2:07:45could be a comment, it may not all was the complaint. Sam Maguire NHS

2:07:45 > 2:07:52trusts setting up subsidiary companies?-- why are NHS trusts

2:07:52 > 2:08:02setting up subsidiary companies? Since 2006, I believe, NHS

2:08:02 > 2:08:08foundation trusts have been able to establish subsidiary companies where

2:08:08 > 2:08:17they further the purpose of the NHS. So this is not a new thing. There

2:08:17 > 2:08:22have been subsidiary companies set up across the country, most notably

2:08:22 > 2:08:27to generate additional income to support the clinical work of the

2:08:27 > 2:08:34hospitals. So I guess there is quite a long-standing thing.I understand

2:08:34 > 2:08:38in Barnsley, for example, the trust has set up a wholly-owned subsidiary

2:08:38 > 2:08:43company, Gloucestershire is looking into this as well. From what I

2:08:43 > 2:08:50understand, having had a catch up with my Chief Executive at the trust

2:08:50 > 2:08:57on Friday, the idea for these wholly-owned subsidiary companies is

2:08:57 > 2:09:05one, to look at how it can reduce tax liabilities, and two, to

2:09:05 > 2:09:10transfer staff, nonclinical staff, into these organisations, where in

2:09:10 > 2:09:19whilst they will be tuped across, any new starters, there is a

2:09:19 > 2:09:25potential savings on salaries and savings for those new starters. Is

2:09:25 > 2:09:32that the purpose of those subsidiary companies as MacI have seen --

2:09:32 > 2:09:35haven't seen the individual companies to which you refer but the

2:09:35 > 2:09:39general point I would respond to is that where there are genuine

2:09:39 > 2:09:42commercial reasons for creating a subsidiary company, a foundation

2:09:42 > 2:09:48trust in law has the power to do that. And so I guess that is an

2:09:48 > 2:09:54existing legal power that has been on the statute book for many years.

2:09:54 > 2:09:59But I try to understand here, there seems to be, before this gets the

2:09:59 > 2:10:02head of steam, there are only a few of these at the moment, but I

2:10:02 > 2:10:05understand there is discussion going on within trusts, in my own trust

2:10:05 > 2:10:09has been discussion about it. They have landed on the view that they

2:10:09 > 2:10:13want to go down this path but before this becomes something that is

2:10:13 > 2:10:18widespread, don't you think it's important for us and the public to

2:10:18 > 2:10:24understand why now and why this model and understand what it is

2:10:24 > 2:10:27trying to do it? Because this whole discussion this afternoon has been

2:10:27 > 2:10:31about saving money, is this the vehicle we are going to go down in

2:10:31 > 2:10:36the future, where anybody who cleans in hospital or provides admin in a

2:10:36 > 2:10:39hospital, provides finance services in a hospital, everything else that

2:10:39 > 2:10:42is nonclinical, will end up in a different organisation to that of

2:10:42 > 2:10:52the NHS?I think we should go away, I haven't heard that specific

2:10:52 > 2:10:55suggestions yet made, so we ought to go away and look at that. Of course,

2:10:55 > 2:11:05number of the that staff, a lot of those services are contracted out. I

2:11:05 > 2:11:12haven't come across the model you're describing for those...I do find it

2:11:12 > 2:11:16rather surprising, to be honest. And Mr Dalton, you're in charge of NHS

2:11:16 > 2:11:22improvement, which presumably helps to advise trusts on what they can

2:11:22 > 2:11:25do, discussions around money. I am a little surprised that I'm getting

2:11:25 > 2:11:30less than I hoped in terms of an understanding about why this model

2:11:30 > 2:11:36is being developed. And is being actively discussed by trust. I

2:11:36 > 2:11:42understand, circus, that the Department of Health sensed NHS

2:11:42 > 2:11:47finance territories in September last year an article around tax

2:11:47 > 2:11:53avoidance issues in the NHS. -- finance directors. I wonder what

2:11:53 > 2:11:59could have prompted that. I'll be at you say the power was there before,

2:11:59 > 2:12:03the fact it is being activated now and is being actively discussed for

2:12:03 > 2:12:05the reasons I have outlined, don't you think we should know more, order

2:12:05 > 2:12:09and you think we should be more open and curious about why this is

2:12:09 > 2:12:17happening? -- or don't you think we should be?We will have a look again

2:12:17 > 2:12:22at regulatory oversight in this area, so we absolutely are prepared

2:12:22 > 2:12:27to do that. But at the same time, I think we need to go back to the fact

2:12:27 > 2:12:34that this is not a novel power, it is not a new power. And our line

2:12:34 > 2:12:37remains that with a genuine -- word there are genuine commercial reasons

2:12:37 > 2:12:41for doing this and that is the law, trusts should not be put the

2:12:41 > 2:12:49different doing that. In a role as regulator, is to ask questions, and

2:12:49 > 2:12:52locate the previous regular to resume which has previously attract

2:12:52 > 2:13:01those, whether we should do so., just press this, you seem to be, Mr

2:13:01 > 2:13:07Dalton, rather less concerned than I'd hoped you'd be, about waiters

2:13:07 > 2:13:09that this power has been around for a substantial amount of time, what

2:13:09 > 2:13:13may be driving people to utilise it now? I would suggest that that is

2:13:13 > 2:13:19perhaps to do with trusts having to find savings and having to manage

2:13:19 > 2:13:24budgets for all be difficult, complicated reasons we understand

2:13:24 > 2:13:28and something that has been addressed in this session. But the

2:13:28 > 2:13:33question is that if they are doing it in terms of, example, tax

2:13:33 > 2:13:35flexibility is, why isn't that something they should be able to

2:13:35 > 2:13:40locate and have an open discussion about in their current trust

2:13:40 > 2:13:46arrangements with yourselves, with H, C, but more worryingly, if it is

2:13:46 > 2:13:52to try and separate out more members of staff of the NHS into another

2:13:52 > 2:13:56organisation that further splits up the NHS family, surely that is going

2:13:56 > 2:14:01to be worrying for recruitment and retention down the road as well? So

2:14:01 > 2:14:07I'll leave it there, because of user, I'm getting pretty blank faces

2:14:07 > 2:14:10on this, but I would urge you to very much consider what is going on

2:14:10 > 2:14:14here, because I think there's a concern that outside of this room

2:14:14 > 2:14:19today that this could be a back door route to privatisation but also, it

2:14:19 > 2:14:23may not be the model that delivers the financial savings that some of

2:14:23 > 2:14:28the people involved in this think it will achieve.

2:14:28 > 2:14:36I will write to you. As you know, there was a proposal to set up these

2:14:36 > 2:14:41social and to size companies in Gloucestershire. I am surprised you

2:14:41 > 2:14:47do not know more about it because in a submission to the trust from the

2:14:47 > 2:14:52Royal College of Nursing they say the Department of Health wrote to

2:14:52 > 2:14:57all NHS Trust financial directors in 2017 with a letter entitled tax

2:14:57 > 2:15:03avoidance issues in the NHS, discouraging all trusts from the tax

2:15:03 > 2:15:09avoidance schemes and reminding them that fees reject a leakage out of

2:15:09 > 2:15:15eight health system. That is quite a serious letter. I am surprised you

2:15:15 > 2:15:23do not know more about it.We do discourage those things. The bit I

2:15:23 > 2:15:31haven't looked at or been briefed on is the specific arrangements that

2:15:31 > 2:15:39have been raised. We do look at tax in a variety of areas and we do

2:15:39 > 2:15:45exactly what we have just said, people should be paying taxes fairly

2:15:45 > 2:15:53as set out by HMRC. I think from memory the things we were concerned

2:15:53 > 2:15:57about when we wrote that letter, I think the individual taxation

2:15:57 > 2:16:04questions around agency staff,...It was a combination of that and a set

2:16:04 > 2:16:10of procurement arrangements, which potentially had an impact on

2:16:10 > 2:16:15suppliers. I do not think it was a letter that had been prompted by

2:16:15 > 2:16:21either of the arrangements that had been raised, is as Sir Chris says,