17 March 2006
Opinion is divided as to whether Sir Nigel Crisp, who resigned last week, is a scapegoat for the NHS's crisis or its cause. His dual role at the DoH did not help matters, says Seamus Ward
The National Health Service might be getting more like the private sector but this growing similarity cut close to the bone last week as a boardroom saga to rival any from television's Trouble at the top unfolded at the summit of health service management. On March 7, Sir Nigel Crisp, who is both NHS chief executive and the Department of Health's permanent secretary, announced he would take early retirement at the end of the month. The 54-year-old was promptly rewarded with a life peerage. But the shock at his departure is palpable and many observers feel he has been forced out by ministers because of increasing NHS deficits.
The announcement sparked tales of a crisis in the NHS, supported by news of redundancies and service cuts. The day after Crisp announced his retirement, the Royal Cornwall Hospitals Trust said it was making 300 redundancies and closing wards and operating theatres to help recover an £8.1m deficit. Trafford Healthcare Trust, meanwhile, said lack of cash influenced its decision to stop taking inpatients at Altrincham General Hospital.
Crisp insists he was not pushed but he acknowledges there were problems, particularly the soaring deficit, which is now predicted to be anywhere between £600m and £1bn by the end of the 2005/06 financial year.
Sources have told Public Finance that ministers were looking for a scapegoat following an unexpected increase in predicted year-end deficits between December and January. Some well-placed Whitehall figures wonder whether Crisp's sacrifice will be enough to save Health Secretary Patricia Hewitt, who staked her political reputation on reducing the aggregate deficit to £200m by the end of 2005/06 and to zero 12 months later. Last week, she admitted that the £200m target would not be achieved.
Although Crisp is not without blame – he admits as much himself – the story behind the poor financial position is complex. A picture is emerging of a man buffeted on all sides while treading an increasingly thin line between his responsibility as a permanent secretary to serve ministers and his duty as NHS chief executive to act as an advocate for the service.
If Crisp had made his move a year ago, when he was short-listed for the job as head of the civil service, his end-of-term report would have been more positive. Although a relatively small deficit would have been noted, the service had improved, new contracts had been agreed for most staff and the NHS was well on its way to achieving a maximum six-month wait for non-emergency surgery (which has since been met). Though the great strides forward under his guardianship should not be underestimated, this had yet to translate into increased public confidence.
The rot began to set in after the key policy document Commissioning a patient-led NHS was published in July 2005. This signalled a radical streamlining of primary care trusts and strategic health authorities during 2006. It also said that by 2008, PCTs should no longer provide services – but soon some PCTs complained they were being forced to hand over services to other operators early.
Hewitt quickly put a stop to this and later admitted that the DoH had 'mishandled' the reform. But the Commons health select committee went further, criticising its approach as 'clumsy and cavalier'. It added that senior civil servants were 'bewildered' as to whether PCTs would eventually hand over service provision or not.
Confusion at the department's Richmond House headquarters was not unusual. As PF revealed last week, a report on the DoH's top management by consultancy McKinsey uncovered a breakdown in relations between senior civil servants and ministers, which Crisp and Hewitt have sought to rectify with a new management structure and more formal meetings between ministers and officials.
Civil servants were unhappy with Crisp's management. One source says: 'One of the first things Sir Nigel did was purge a lot of senior civil servants and replace them with NHS people. They may be good managers but few have policy development experience. The NHS has a distinct culture, which is terribly vicious and short-term – this started drifting into Richmond House.'
Out in the NHS, resentment was also growing. Not for the first time, NHS managers had been asked to reform themselves out of a job. With the 300-odd PCTs to be at least halved and the 28 SHAs reduced to ten or 11, many health service administrators face redundancy. Tired of constant change, managers' morale took a steep dive during the autumn and winter.
NHS managers say they accept that a certain amount of under-appreciation, or even criticism, goes with the territory. But as the scale of the financial problems emerged at the end of 2005, some of the loudest condemnation was coming from the department – one manager describes its directives as increasingly 'hectoring'.
NHS managers feel the DoH was passing the buck, as much of the overspend is due to the new, centrally negotiated staff contracts. The officials miscalculated the cost of the deals – the GP contract cost £300m more than expected and the consultant contract £90m. Some estimates put the additional cost of Agenda for Change – the new pay system for most other staff – at £900m, though the department insists the figure is less than that.
Jeremy Millar, Institute of Healthcare Management interim chief executive, pays tribute to Crisp's contribution to NHS reform, saying: 'History will judge whether the pace of those changes has been accelerated beyond the capacity of the system to cope with them without the financial stresses, currently apparent in the system, becoming so pronounced.'
NHS Confederation chief executive Gill Morgan insists Crisp should not bear sole responsibility for the health service's problems. 'We are where we are because the system collectively has not grappled with this – from politicians, to the department, the SHAs and individual organisations,' she says.
'Messages that are very clear at the top can become very garbled when they are passed down. The service did believe the most important thing was to deliver on targets – and that finance was flexible.'
She is in no doubt that Crisp alone decided he should go. 'If I had to hypothesise, if I were in his shoes, with deficits escalating, I would wonder whether people were telling me everything and whether a new set of eyes were needed to deal with the pressures in the service,' she says.
So what should the DoH do next? NHS managers and civil servants tell Public Finance that Crisp's job must be split into two. One civil servant calls the dual role an 'ill-advised experiment' that created a conflict of interest. For now, the jobs are divided, with Sir Ian Carruthers and Hugh Taylor stepping into the roles of acting chief executive and acting permanent secretary respectively. However, Morgan says the DoH should think hard about whether to keep the jobs separate.
'Overall, Sir Nigel managed the dual role very well but the jury is out on whether it should be two jobs or one. If you have two jobs, you can have two people harbouring jealousies.'
With the uncertainty at the top and financial instability at the front line, some are calling on the department to slow the pace of reform.
Karen Jennings, Unison's head of health, says: 'The government must stop and take stock. We don't need this constant fog of reform when it would make more sense to pilot changes.'
It looks unlikely that this will happen. Whoever gets the job, or jobs, will have a lot of bridge-building to do and, if the NHS deficit continues to escalate, they might also have to deal with a new health secretary.
The main contenders
It is unclear whether Sir Nigel Crisp's two roles will taken by one or two people. If the latter, who could get the crucial role of NHS chief executive? The department says it will advertise nationally and internationally and with the increasing emphasis on out-of-hospital care, it seems unlikely it will opt for one of the acute sector big hitters. Sir Ian Carruthers, acting chief executive, is understood to want a chief executive post in one of the new SHAs.
Early front-runners for the job include:
Mike Farrar, chief executive of West Yorkshire Strategic Health Authority. He has wide experience in the NHS and has worked in the DoH on primary care.
David Nicholson, chief executive of Birmingham and the Black Country Strategic Health Authority. He is a career NHS manager with around 25 years' experience.
Simon Stephens, former policy adviser at the DoH and Number 10. He caused a political storm when he became president of private health provider United Health Europe.
Stephen Thornton, chief executive of The Health Foundation and former chief executive of the NHS Confederation. He has more than 20 years' NHS management experience.
Bill Moyes, respected head of foundation trust regulator Monitor. He has a keen interest in the intricacies of trusts' financial position and the quality of patient care.
PFmar2006
