Leaked Whitehall document raises fears in government about 'complacent' health department
David Cameron made a point in opposition of saying that Tony Blair wasted too much time and energy reshuffling his ministers. Let members of the cabinet become experts in their field and then shuffle them up or out at the end of the parliament, the future prime minister told us.
And yet two cabinet ministers ? with vastly differing levels of experience ? are the subject of endless headlines that they may soon be on the move.
Kenneth Clarke, the most experienced member of the cabinet whose government career started as a whip in 1972, reads that he is to lose a large chunk of his ministerial team as punishment for going soft on penal policy. Perhaps this is because the justice secretary covered a different brief in opposition ? business ? and Cameron had forgotten that Clarke belongs to a different tradition on law and order.
Andrew Lansley, the second cabinet minister who is the subject of reshuffle speculation, is the opposite to Clarke. He had no ministerial experience before he joined the cabinet in May ? he was a senior civil servant in the 1980s ? but had the most experience of any member of Cameron's frontbench in shadowing the department he now runs.
Perhaps that explains Cameron's irritation with Lansley who, as health secretary, is embarking on the most radical restructuring of the NHS in its 62 year history. Oliver Letwin, the coalition's policy chief, has been despatched to cast his eye over Lansley's plan to hand up to 80% of the NHS budget to GP commissioning consortia.
The prime minister is keen for Lansley's reforms to work because he wants to reconfigure all public services. But Cameron fears that the changes are in danger of being undermined by Lansley's failure to grasp the wider nettle of reform introduced by the last government.
Concerns about Lansley and his department are highlighted in a letter from the Independent Challenge Group to Danny Alexander, the chief secretary to the Treasury, which has been leaked to the Guardian. The group, set up at the time of the budget in June to challenge Whitehall thinking, pulls no punches as it says it has doubts about whether �16bn of annual efficiency savings, the bulk of which should be introduced through the existing Quality, Innovation, Productivity and Prevention (QIPP) programme, will be realised.
Alexander probably choked on his cornflakes when he read of the dangers of a �10bn shortfall in the NHS budget:
The government will be faced with a choice between dealing with the fallout from increased waiting times or increasing the DH's budget, perhaps by as much as �10bn per year. To avoid this unpalatable trade-off, the DH settlement needs to build in much greater non-QIPP efficiency savings from the outset.
The authors of the letter say of the QIPP reforms:
The QIPP programme was very presciently designed by the NHS in the final years of the last government in the expectation of cuts to come whichever party won the recent election. It is based on improved productivity and involves reconfiguring services, including, where necessary, hospital closures.
One department official told the team that the changes were radical, adding that they are:
...greater and more rapid than those achieved in any national health service in any country in the past.
The group acknowledges that the QIPP reforms are controversial. This could strengthen the hands of critics of Labour who say the party has failed to admit that it would have introduced unpopular cuts had it won the election:
We are aware that where QIPP savings arise from service reconfigurations (eg a large percentage in London) delivering such savings will be extremely politically sensitive and will require robust consultation plans. These plans will need to address the risk that vested interests in the local health economy inclining towards the status quo; and the ability of these interests to garner public support (with the benefits of change being harder to make tangible to people).
Given the inevitable time involved in detailed local public consultation, it is essential that these plans are put in place as soon as possible in order to maximise the level of QIPP savings in the [spending review] period: without them we fear that the estimated QIPP savings may not materialise.
The members of the Independent Challenge Group do praise Lansley's plans to abolish Primary Care Trusts and to hand 80% of the NHS budget to GP commissioning consortia:
We do believe that the changes have the potential to achieve the major objective of increasing the quality and cost effectiveness of commissioning in the sense of improving the fit between the services purchased and the needs of patients. We are also convinced that more competition between the private and public sectors will be encouraged.
But the group says:
The details of how the policy will be implemented have not yet been finalised, and therefore it is hard to assess how the administrative costs of the new system will compare with those of the existing system.
A key element of these costs will be the additional payment per patient to be made to GPs to cover their costs related to commissioning and this has yet to be agreed with the BMA.
The DH recognise that it is a major challenge to reduce commissioning costs when the number of bodies involved in commissioning may significantly increase.
The group also raises concerns:
We feel that the time it will take for the new structure to become effective in achieving its long-term benefits is underestimated. Therefore the rate at which the expected cost savings will arise may be underestimated.
We fear that the results will be patchy with some commissioning consortia performing very well, but with others performing poorly, again reducing the pace of overall cost benefit realisation.
The letter outlines areas in which further savings could be made because of the group's fears that the existing QIPP programme will not bite deep enough:
? Social care. It reports that the health department is planning cuts of 25% to this budget which is not ring-fenced, unlike the overall NHS budget which will rise above the rate of inflation.
The plans for social care work out at �3.8bn in cuts plus �2.2bn in efficiency savings. But the group raises doubts about whether the �2.2bn can be achieved because of the "huge variances" in performance by local authorities which are responsible for providing social care:
The problem is that the DH has no levers it can pull to force underperforming LAs to reform. The funding for social care is distributed simply on the demographics of the area concerned, with no regard to the efficiency with which it is spent.
Therefore even the planned �2.2bn of efficiency savings must be in doubt, leading to fears of even greater service cuts. We believe this is a case where the Department should investigate how greater central control could be achieved despite the apparent contradiction with the localism agenda.
? Medical research. The letter asks whether the NHS can continue to spend around �200m supporting medical research charities, such as Cancer Research UK and the Wellcome Trust, during a difficult economic climate:
Much of this work will, even if successful, not impact on NHS patients for many years. We question whether the NHS should, in the current climate, be supporting this research rather than providing facilities at cost to the charities.
? GP training. The letter questions plans to employ all doctors when they have finished their training:
At a time when savings must be made, and when there is no clear need to increase the number of GPs, this seems to us to be a very bad policy.
No graduate in other disciplines is guaranteed a job, and the training costs are sunk costs which should be ignored in setting the policy.
We recommend that GP numbers should not be allowed to increase beyond that needed to meet demand.
The letter, dated 7 September, does praise the department of health's "outstanding" help for the group. The letter was signed by the former APAX chief investment officer Adrian Beecroft, the chief executive of the Legal Services Commission Carolyn Downs and the director of climate change adaptation at the department of energy and climate change, Robin Mortimer.
This was the department of health's response this evening to the leak:
The Independent Challenge Group was established as part of the spending review process. The points raised by the group were considered as part of the spending review process. Its work has now concluded.
We consulted on our reforms and received a huge number of responses: over 6,000. These have helped us to refine our plans. We have responded to concerns around implementation and are testing several areas of reform to make sure we have the best arrangements in place.
GP pathfinders are already leading the way to making our reforms a reality, with 52 of them taking on commissioning responsibilities and testing consortia arrangements. More will follow. They demonstrate the level of enthusiasm in the system for taking these ideas forward. Many GPs are ready and willing to take on commissioning responsibilities so that they can improve services to better reflect the needs of local communities.
Source: http://www.guardian.co.uk/politics/wintour-and-watt/2010/dec/26/andrewlansley-nhs
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