Feature

Holding on while letting go

The Jenkins/Langlands review of health service management, now sitting on the minister’s desk, could herald new turmoil in the NHS. Steve Harrison and Margaret Goose explain

On an elevated site just to the east of Leeds city centre stands Hypodermic House, so called after the giant, sharply pointed finial above its roof. Its official name is Quarry House, and it is the base of the NHS Management Executive, banished from London by Kenneth Clarke when he was secretary of state for health in an attempt to establish a more focused approach to NHS management away from the politics of Westminster and Whitehall. Although most of the 1,000 or so staff have been in Leeds for less than a year, they are being widely forecast as the main victims of the current Jenkins/Langlands review. What is going on?

The background is that governments (of whatever political persuasion) have the perennial dilemma of how much central control to exert over the NHS. Crudely speaking, they wish to control total expenditure and to take credit for things that are seen to go well, but to avoid the blame for things that go badly.

In the past this has led to what (despite its bureaucracy and occasionally petty rules) has been a highly decentralised arrangement - tight central control of the money and a few other key resources (such as the medical workforce), but little else. Decentralisation has to have someone to operate it at the lower level. Doctors have always had a key role here; their medical decisions effectively ration care, thereby sparing ministers all sorts of embarrassments in trying to define what is, and is not, available ‘on the NHS’.

Since the 1980s, financial pressures have meant that ministers wanted a little more control. Their chosen method has been to turn NHS managers into agents of government. Paradoxically, the more such managers are given clearly defined objectives and insulated from Whitehall’s endless ‘finessing’ in response to daily politics, the more control government has. Hence the move to Leeds.

But there has to be an intermediate tier too; ministers cannot communicate directly either with doctors or hospital managers. Historically, this intermediate tier has been the English region, of which there are currently 14. This is not a magic number, though in the past it was largely influenced by wartime patterns of organisation and the policy decision that each region should contain at least one teaching hospital. (That is why the present Thames regions have boundaries that radiate from central London, rather than a more integrated arrangement for the capital). But the number of regions (or whatever the unit of intermediate tier) cannot exceed n, where n is the maximum number of people that can be fitted into the minister’s office and lectured. Fourteen is a feasible n, but 100 (around the number of new districts that we are likely to finish up with) is well in excess.

The whole business of the intermediate tier has been complicated by the arrival of the purchaser/provider split following Working for Patients. Both the logic of this split, which institutionalises a conflict of interests, and the exigencies of managing the creation of ‘opted out’ NHS trusts and ‘fundholding’ general practices, led to the creation of a new intermediate tier, the NHSME ‘outposts’, of which there will soon be seven. The rough division of labour is that regions are concerned with purchasing and the outposts (now that 95 per cent of providers will soon be trusts) with providing.

But this new arrangement is unstable and there are both short and long-term pressures behind it. The most important short-term pressure comes from the anti-bureaucracy lobby of the Conservative back benches. This has been sporadically influential during the 1980s and 1990s. Its most spectacular (if not wholly intended) achievement to date being the Griffiths enquiry team, originally intended to review NHS ‘manpower’ but actually producing general management. This lobby’s influence has helped to produce recent sharp reductions in RHAs’ staffing levels. The Jenkins/Langlands ‘functions and manpower review’ is the latest manifestation of this influence, coupled with reaction to a £50bn government deficit.

The review team is chaired by Kate Jenkins, an independent management consultant who is also a member of the NHS policy board, and consists of Alan Langlands (deputy chief executive of the English NHS), Peter Griffiths (a former regional general manager and trust chief executive), Ian Carruthers (chief executive of the Dorset Purchasing Commission), John Sherring (Audit Commission) and Dr Carol Propper (an economist from the School for Advanced Urban Studies at Bristol University).

Its terms of reference, agreed only in May, long after work had started, are:

1 To carry out an organisational analysis of the main work and function required to:

• ensure that the government’s reforms of the NHS are fully affected;
• ensure effective oversight of purchasers and providers operating in the NHS internal market;
• ensure that the secretary of state is able to discharge her statutory responsibilities for the management of the NHS;
• ensure that the proportion of NHS expenditure devoted to direct patient care is maximised.

2 In the light of the above:

• to determine the statutory responsibilities and the care functions which must continue be discharged by bodies which are part of, or directly accountable to, central government;
• to make recommendations on the organisational structure required for this;
• to consider possible future changes to the configuration of NHS purchasers - including DHA managers, joint DHA/FHSA working and the development of the GP fundholding scheme;
• to make recommendations on the discharge of other essential functions eg. estates management and information management & technology;
• to determine the financial and manpower consequences for the NHS and the Department of Health (including the NHSME), of conclusions reached.

3 The review team should take particular account of:

• the need to achieve a balance between the benefits of decentralisation and the essential requirements of public accountability;
• the need for an internally consistent regulatory framework to support the operation and development of the internal market;
• the need of the development of effective purchasing in the NHS;
• the conclusions of the Cadbury Report on corporate governance.

It is not difficult to detect that these are extremely wide terms of reference, going well beyond what might be needed for a simple ‘bureaucracy-culling’ exercise. They seem to represent a recognition of the longer term set of pressures which derive from the tensions built into the purchaser/provider split itself.

First, there is the conflict between a system based on DHA purchasers (to which the government has recently been reaffirming its commitment) and one based on GP fundholding. These are not only theoretically opposed (being based on quite different assumptions about the nature of health needs and how they should be identified), but practically so; every pound of GP’s budget allocations for referrals is money which is beyond the reach of DHA planners and epidemiologists. As fundholding expands, so DHAs are increasingly disabled from performing the discretionary elements of their function.

A second inbuilt conflict is between a system whose interactions - competition - simply produce the results they produce, and a system geared to producing results which a prudent government might wish to produce. This latter is called planning or, more fashionably, a ‘managed market’. It is problems such as these that the review’s wide terms of reference address.

The Jenkins/Langlands review will not be made public for several months, although there has already been a presentation to the health secretary, so prediction of the outcome is hazardous.

The big question is, how far the review can realistically be expected to have tackled its massive terms of reference, and how far the government can be expected to make sweeping organisational changes on the basis of it? Reports suggest that the odds must be against such changes; although we should remind ourselves that the NHS management (Griffiths) inquiry was a no more substantial operation, and that Ms Jenkins in an earlier role as a civil servant was a co-author of the Next Steps report which resulted in the decentralisation of many Whitehall activities into ‘executive agencies’.

If radical reorganisation is not immediately contemplated, less radical changes, which are to some extent already in train, may receive the review team’s blessing; DHA/FHSA mergers (which of course begin to address some of the DHA/GP fundholder tensions) are a possible example. And it will be difficult to resist another round of bureaucrat-bashing; after all, we’re all Working for Patients, aren’t we?