NHS Alliance - Building New Mutuals from the Foundation Trusts


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Article with Mo Girach and Michael Sobanja

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NHS Alliance - Building New Mutuals from the Foundation Trusts

  1. 1. Building new mutuals from the foundation trusts?Mo Girach, Geraint Day and Michael SobanjaIn June this year the NHS Alliance injected new life into the debate onaccountability within the NHS. Working with several other organisations itpublished Whose NHS Is it Anyway?1 The document encapsulated the fruitsof some work begun in 2008.That report drew together a number of proposals to enhance accountability ofNHS organisations. The main themes were:1. more shared decisions in the consulting room;2. GP surgeries to be more responsive to their local populations;3. more responsive and accountable commissioning of services;4. a stronger push at national level to share power with patients andcitizens;5. exploring co-production of services.The principles behind its recommendations are generally applicable to theNHS across the UK but we shall focus here on the current UK Governmentpolicy agenda that relates to the NHS in England, given the UKs devolution ofhealthcare responsibilities.“We need a system that sees patients and communities as assets, trusts itsusers and commits to cooperative working across communities. We wantstructures that enhance the great potential of human association andcollective action”, stated Whose NHS Is It Anyway?2 It went on to recommendthat commissioner boards be elected, and that there be, for Practice BasedCommissioners (PBCs) “elected boards to work with the clinicians to run thePBC group, along the lines of parent governors in schools”.3A move towards involving local people and health professionals took placewhen NHS foundation trusts were created in England, but not across thehealth economy as a whole. Some of us were actually surprised that thefoundation trust moves started at secondary care rather than primary carelevel.When foundation trusts were first being mooted by the UK LabourGovernment, one of the strands of thinking borrowed from the experience ofthe co-operative and mutual sectors: “We will shortly be bringing forward legislation to establish NHS Foundation Trusts as independent public interest organisations, modelled on co-operative societies and mutual organisations. Their ownership will be lodged in the local communities they serve. This form of social ownership will replace central state ownership with local ownership ... with power in the hands of local people and frontline NHS staff. 4 1
  2. 2. Wind the clock forward seven years or so, and we had this Department ofHealth (DH) pronouncement under a Liberal Democrat Conservative CoalitionGovernment: “We are committed to devolving power to local communities – to the people, patients, GPs and councils who are best placed to determine the nature of their local NHS services.”5The Coalition’s programme for government contains this commitment: “We will support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services.”6When the then Secretary of State for Health, Alan Milburn, and his DHadvisers were drawing up plans for what became NHS foundation trusts, theanalogy with co-operatives and mutuals referred mainly to their governance.How could the Labour Government achieve its aim of decreasing directmanagement by Whitehall at the same time as increasing more local say andinfluence into NHS organisations?Foundation trusts were chosen to take forward that governance model andwere very large public bodies. They were existing acute secondary care trusts(later to include mental health). The governance structure chosen, whileinvolving local community members, was not one of one-member, one-vote toelect the foundation trust directors. It was a hybrid system whereby a board ofgovernors could appoint and remove the non-executive directors (NEDs) ofthe trust. The board of governors was partly elected by constituencies madeup of the public and of trust staff, and partly appointed by external stakeholderbodies. The governance model is a ‘mutistakeholder’ system. A tier ofaccountability exists between local people and the foundation trust board ofdirectors. In some very large co-operatives there is a two-tier system wherebygeographically arranged groups of members elect members to a committee.Membership of such committees is a prerequisite for being elected to theboard of directors. In many other large co-operatives there is, on the otherhand, direct election to the board of directors. There is no one-size fits allmodel of governance.For foundation trusts it is still early days. The first ten NHS foundation trustswere authorised by Monitor (currently the NHS foundation trust regulator andnow intended to be the economic regulator for all providers of health and adultsocial care services in England7) in April 2004, with a further ten following thatcalendar year. There are currently 130 foundation trusts. 8 The CoalitionGovernment pledged in the Health White Paper issued in July 2010 toaccelerate the movement of all hospitals to foundation trust status9: “Our ambition is to create the largest and most vibrant social enterprise sector in the world. The Government’s intention is to free foundation trusts from constraints they are under, in line with their original 2
  3. 3. conception, so they can innovate to improve care for patients. In future, they will be regulated in the same way as any other providers, whether from the private or voluntary sector. Patients will be able to choose care from the provider they think to be the best.”That same paragraph in the White Paper refers to changes in the governanceand accountabilities of foundation trusts: “As all NHS trusts become foundation trusts, staff will have an opportunity to transform their organisations into employee-led social enterprises that they themselves control, freeing them to use their front- line experience to structure services around what works best for patients. For many foundation trusts, a governance model involving staff, the public and patients works well but we recognise that this may not be the best model for all types of foundation trust, particularly smaller organisations such as those providing community services. We will consult on future requirements: we envisage that some foundation trusts will be led only by employees; others will have wider memberships. The benefits of this approach will be seen in high productivity, greater innovation, better care and greater job satisfaction. Foundation trusts will not be privatised.”9A potential move to employee-led organisations was never the intention of theHealth and Social Care (Community Health and Standards Act) 2003 thatcreated foundation trusts. As mentioned earlier the governance model chosenwas one that involved several stakeholders, not only the employees. The2010 White Paper commitment is, however, is in line with the idea set outseveral weeks earlier by the UK Coalition Government to: “...give public sector workers a new right to form employee-owned co- operatives and bid to take over the services they deliver. This will empower millions of public sector workers to become their own boss and help them to deliver better services.”10The DH has already released its consultation paper that contains proposalsfor the future of NHS foundation trusts.11 That paper makes it clear that theUK Government would like to see some foundation trusts having amembership drawn entirely from their employees, perhaps particularly smallerfoundation trusts providing community services. 12 The DH also wants toexplore whether there could be increased employee influence within existingfoundation trusts, although it does also state that, “The Government has nointention of requiring or encouraging any existing foundation trust to changeits governance model”. 13 The consultation paper also repeats the intentionthat all NHS trusts would become foundation trusts within three years – andthat the ordinary, non-foundation, trust model would be abolished. So the onlygame in town for NHS trust governance in England would be the foundationtrust model, however that be ultimately constituted in individual cases. Otherparts of the consultation document refer to financial freedoms from centralgovernment, and to the aim of making Monitor both encourage competition in 3
  4. 4. health and adult social service provision and apply the requirements ofcompetition law to all such services. The closing date for comments on thegovernance and the other proposals is 11 October 2010.The modern co-operative sector is the direct descendant of the RochdaleSociety of Equitable Pioneers, which began operating in Lancashire in 1844(there were co-operatives before that, such as the Fenwick Weavers inScotland, dating from 1765). When one considers that the worldwide co-operative movement did not come into existence fully fledged and with perfectsystems of member involvement in place, it is impressive that manyfoundation trusts have taken significant steps in trying to involve people indecision-making. That takes a lot of doing in a NHS culture where top-downdecision-making has been the norm since 1948.As neither Rome nor the Rochdale inspired co-operative movement was builtin a day, there are still things that the NHS foundation trust sector can yetlearn. For example, and despite pretty high turnouts in elections for governors,some trusts have a long way to go in engaging members meaningfully in trulyopen governance. It was observed earlier this year that impediments can beput in the way of foundation trust members engaging with governors, with noway to contact individual governors outside of carefully-managed meetingsthan to go through the “Governor-Coordinator”.14The two foundation trusts that one of the authors is a member of have had fitsand starts in communicating with their members. Although matters seem tohave improved, neither NHS foundation trust seems to want to shareproactively with its own membership some of the difficult issues that havearisen (the sudden departure of the chief executive in one case, and a high-profile health and safety prosecution in the other). Instead, there is a tendencyto only communicate ‘good news’ stories through communications aimed atmembers. There is nothing wrong with having good news, of course(especially in the NHS) but there are lessons to be learned about openness.Even the best-run co-operatives and mutuals can have problems. Think ofEquitable Life, in the case of mutuals (not to mention Northern Rock and RBSin the purely private sector). Attempting to shun away from or even hide bigproblems does not always benefit users. We suggest that it does the opposite.The NEDs of foundation trusts are still one tier removed from those with votes.Coupled with lack of member engagement in some foundation trusts, that canengender feelings of a democratic deficit. Of course, given that no other formof NHS organisation (in the UK, not just in England) has direct elections, oneis comparing foundation trusts (with an average election turnout of 26% in theperiod 1 April 2008 to 31 March 2009 15) with the rest of the NHS, where notone person has a vote other than via a General Election.Despite board, governor and staff’s best efforts, it can be argued that thepublic is still largely excluded from the big decisions that NHS foundationtrusts take day in, day out. These account for large sums of public money. Andof course the public is still currently largely excluded from commissioning. 4
  5. 5. Ideally more open governance and public involvement should apply acrossthe whole health economy, not just one part of it.There was a feeling around at the inception of NHS foundation trusts, that‘trust’ of the public was a long way from the deliberations of at least some ofthe DH policy makers. The two-tier governance structure has already beenmentioned. But why not have public elections for NEDs on foundation trustboards, not just for the governors? Many large co-operatives – comparable inemployment numbers and financial turnover with foundation trusts – do justthat.An earlier intention of the Coalition Government to have direct elections toPrimary Care Trust (PCT) boards has been eclipsed by the announcementthat the Government wants to phase out PCTs by 2013.16 Yet we maintain thatthe idea of having direct elections to the boards of NHS bodies is still a goodone.We contend that opening up and involving local people through such electionsin foundation trusts should deliver better accountability. The whole ethos ofpublic accountability – and that of the Coalition theme of the ‘Big Society’17ought to be about allowing the public to have a real say. It needs to berealised that the NHS is usually dealing with responsible and sensible adults –they should be directly involved in spending decisions, rationing decisions,andthe other essential aspects of delivery of effective and efficient health care byNHS foundation trusts. Incorporating democratic structures into healthcareproviders and not on commissioning boards has the potential to confuse – orat least heavily dilute – accountabilities. If foundation trusts are meant toconcentrate on one aspect of the “how” and commissioners on the “what”,there is surely a strong case that community involvement in commissioning iseven more important than in the operation of providers. There does need tobe close scrutiny of the proposed accountabilities being proposed forfoundation trusts in future, however. That is the nub of Whose NHS Is ItAnyway?The Government wants to transfer some of the functions of PCTs (for healthimprovement) to local authorities. 18 If direct elections are alright for thecouncillors overseeing the operations of local authorities, which may dispensetens of millions of pounds of public money, why not for comparably sizedbodies which happen to be in the NHS? As we have already said, many co-operatives practise one-member, one vote to elect their NEDs. The public’svoice should be heard and more importantly, to be listened to at theheart of the decision-making process. So why not through the ballot box?To be sure, involving the public in this way would be a challenge. But in orderto make the board truly accountable to the public and to society it is anecessary step: “For the first time since 1948 the NHS will begin to move away from a monolithic centralised system towards greater local accountability and greater local control.”19 5
  6. 6. The above are not the words of Andrew Lansley but the words of Alan Milburnfrom 2002 in support of foundation trusts.Tough decisions are undoubtedly ahead for local NHS systems (across theUK as a whole, not only in England). This will make the need to address thedisconnection that many people feel about NHS decision-making even moreimportant to address. If done properly and with determination it could wellcreate a real sense of public ownership by local communities. Of course otherpowers and freedoms for foundation trusts need also to be looked at seriously.These include rate relief, taxation of revenue, the costs of complying andcompulsory competitive tendency and how a new improved mutual can raisecost and risks.The time is right to think how foundation trusts could be freed of the vestigesof state micromanagement, by devolving power to local people. Not only isthat central to any debate about the Big Society, but should be a goldenopportunity for co-operative and mutual values to be placed at the heart of ourpublic services in practice.Yet beyond this, even, more is required than than extending the publics rightto join and vote. A wholesale culture change is required to bring about moreresponsive, publicly accountable and indeed efficient health services. Some ofthe longstanding co-operatives and building societies learned from experiencethat having thousands of inert members was not enough. Several in recentyears set about deliberately recruiting new members, and giving themopportunities to actually creating more challenges to boards and management.That is not always a comfortable process for those who hold the reins ofpower. Yet it has not only led to greater involvement in some cases, but alsobetter performance as an enterprise. Some foundation trusts have tried tolearn from those experiences but more meaningful progression across theNHS as a whole will require even more sustained commitment. Changingculture was mentioned earlier. It is not an easy process in any organisation,and many parts of the NHS still have a long way to go. We fully concur withthis message from Whose NHS Is It Anyway?: “Further progress is essential if we are to have a first class service. Greater involvement is an important way of improving quality and safety, trust and confidence and public health. It can also help reduce costs, essential for the next few years.20We are convinced that such an approach is needed to help ensure that theequity and excellence aspirations of the 2010 Health White Paper are fulfilled. 6
  7. 7. 1 NHS Alliance with the support of Arthritis Care, National Voices, National Association forPatient Participation, Patient Information Forum, African HIV Policy Network, Diabetes UKand the National Association of LINks Members (NALM), Whose NHS is it Anyway? SharingPower with Patients and the Public, June 2010. It may be found atwww.pals.nhs.uk/cmsContentView.aspx?ItemId=2091.2 Ibid., p 5.3 Ibid., p 9.4 Department of Health (DH), A Guide to NHS Foundation Trusts, London, December 2002, p3.5 ‘Health secretary outlines vision for locally led NHS service changes’, DH news release, 21May 2010.6 Cabinet Office, The Coalition: our programme for government, Section 27, p 29, London,May 2010, . It may be found at: www.hmg.gov.uk/programmeforgovernment. Extracts quotedhere are Crown Copyright.7 Equity and excellence: Liberating the NHS, DH, Cm 7881, TSO (The Stationery Office),Norwich, July 2010 p 36, para. 4.23. Seewww.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/documents/digitalasset/dh_117352.pdf. Extracts quoted are Crown Copyright.8 Monitor website consulted on 17 June 2010: www.monitor-nhsft.gov.uk.9 Equity and excellence: Liberating the NHS,p 36, para. 4.21.10 The Coalition: our programme for government, Section 27, p 29.11 Liberating the NHS: Regulating healthcare providers, DH, London, 26 July 2010:www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/documents/digitalasset/dh_117842.pdf.12 Ibid., p 3, para. 2.3.13 Ibid.., p 7, para. 2.16.14 Andrew Pope, Hype versus reality: foundation trusts and mutuals”, Progressonline, 3March 2010. At www.progressives.org.uk/articles/article.asp?a=5480.15 Monitor, ‘2009-10 review of NHS foundation trusts’ three-year plans’: www.monitor-nhsft.gov.uk/home/our-publications/browse-category/reports-nhs-foundation-trusts/reviews-nhs-foundation-trusts-an-4.16 Equity and excellence: Liberating the NHS, p 34, para. 4.16.17 Cabinet Office, ‘Building the Big Society’: www.cabinetoffice.gov.uk/media/407789/building-big-society.pdf.18 Equity and excellence: Liberating the NHS, p 34, para. 4.16.19 DH, A Guide to NHS Foundation Trusts, London, December 2002, p 420 Whose NHS Is It Anyway?, p 2. 7