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ITEM CA11

OXFORDSHIRE JOINT HEALTH OVERVIEW AND SCRUTINY COMMITTEE – 26 JANUARY 2006

CABINET - 21 MARCH 2006

RECONFIGURATION OF NATIONAL HEALTH SERVICE STRUCTURES

Report by Head of Democratic Services

1. Current Government policy makes a commitment to developing the NHS into a "truly patient-led" service. A patient-led NHS is perceived as providing patient choice at all levels, and ensuring that a wider range of services is provided in community settings. This approach places the focus of service development and delivery upon providing people with information and choice that allows them to feel in control, and to fit their care around their life. To achieve a patient-led NHS, the Government believes that there needs to be change, both in organisational structures and in methods of service delivery. During 2006/07 it is proposing to make changes to the number of Primary Care Trusts (PCTs), Strategic Health Authorities (SHAs) and Ambulance Trusts across the country.
2. In December 2005 Thames Valley SHA launched three consultations about the reconfiguration of NHS organisations. The changes in configuration are required by the Government, and address:
   
   

1. the configuration of PCTs; the configuration of SHAs; and
2. the configuration of Ambulance Trusts.
   
   
3. The consultations run for 14 weeks, ending on 22 March 2006. The changes being proposed will result in new geographical boundaries for all three types of NHS organisation within Oxfordshire. Both the Cabinet and the Joint Health Overview & Scrutiny Committee (JHOSC) have been invited to comment on the proposals to configure the NHS bodies.
4. It is important for the Cabinet and JHOSC to be aware that the consultations do not consider the provider functions of PCTs, but solely the organisational structures. As such, the JHOSC should be aware that the Local Authority (Overview and Scrutiny Committees Health Scrutiny Functions) Regulations 2002 exempt any proposals to dissolve or establish an NHS Trust or PCT from being considered as a substantial variation or development. The proposals relating to the change in configuration of the PCTs and Ambulance Trust within Oxfordshire may therefore not be considered within the health overview and scrutiny powers associated with substantive issues.
5. This report summarises the issues relating to each of the proposed configuration changes, and identifies matters that the JHOSC and the Cabinet may wish to comment on.

Consultation on changes to PCTs within Oxfordshire

6. The majority of the contact that the public has with the NHS takes place in primary and community settings. Choice and diversity of services are as important for patients in primary care as they are for those needing hospital treatment. As new approaches to enabling more choice within primary care are developed nationally and implemented locally, the role of PCTs needs to adapt and develop.
7. The proposed changes to PCTs are intended to establish organisations that can commission the best care for patients, balance the needs of their local communities and ensure a range of health services are delivered that reflect these needs. The proposals may also assist in the recruitment of high quality staff, which has been a problem within the Thames Valley. It is believed that it is more likely that the best leaders and staff will be attracted to work in organisations that are large enough to offer significant challenge and development opportunities. Given the current financial pressures within the health system, it will be important that the new PCTs have experienced and skilled staff that can lead primary care locally and can ensure that financial recovery plans are fully implemented and the savings needed are realised. Financial risks may also be reduced with larger organisations able to maximise efficiencies and build in flexibilities with larger budgets.
8. The PCTs in Oxfordshire have been working on plans for a single PCT. Currently, the boundaries of the five PCTs in Oxfordshire are different from the county and district boundaries. One PCT for Oxfordshire should provide the following advantages:

• coterminous boundaries with social care services
• development of a strong commissioning team
• ensuring effective financial management

9. It is proposed that locality structures would be established within the one PCT, to ensure that the specific needs of defined areas are focused on, and that the PCT maintains its links with the district councils and other local stakeholders. A decision on how this would be implemented would be taken once a single PCT had been established.
10. The SHA is consulting on two options for the configuration of PCTs within the Thames Valley area. In both options, it is proposed that there is one PCT for Oxfordshire.

• Option One - five PCTs, Milton Keynes, Buckinghamshire, Berkshire West, Berkshire East, Oxfordshire
• Option Two – four PCTs, Buckinghamshire and Milton Keynes, Berkshire West, Berkshire East, Oxfordshire

11. Option 1 has been identified as the preferred option by the SHA as it builds on the work of the local health economies in Thames Valley who have been developing plans for bringing PCTs together. The five PCTs would be coterminous with local authorities and, with the exception of Milton Keynes, would all deliver larger PCTs to take on the challenges set out in Commissioning a Patient Led NHS. The significant advantage of this option is that much of the work has already been started and has been initiated locally. There is also a history of the PCTs within the five areas working together and the five health economies are currently used for planning in several areas of healthcare, including finance and IT. Of the two options, this one maximises the existing relationships that have been developed with local authorities and provides a basis for future partnership working to be built upon.
12. The disadvantages of this option are based on the size of the proposed PCTs. With the exception of Oxfordshire, the PCTs are likely to be smaller than the average expected size of PCTs across the country. The average new PCT is expected to be approximately 600,000 populations. Oxfordshire would meet this figure, whereas for example, Berkshire East PCT would cover a population of 374,000.
13. Option 2 varies from Option 1 by bringing Milton Keynes and Buckinghamshire PCTs together. The proposed new PCT would be coterminous with the combined local authorities of Buckinghamshire County Council and Milton Keynes Unitary Authority. This option would generate more savings than Option 1 and would address the issue of size of PCT. However, it is clear that local stakeholders support Milton Keynes remaining separate from Buckinghamshire, recognising local cultural differences between the communities.
14. Members of the Cabinet and the JHOSC may wish to consider whether the options proposed will impact on the commissioning and delivery of primary care services within Oxfordshire.

Consultation on a new Strategic Health Authority

15. The primary focus for SHAs in the future will be on building the new system of commissioning, and then maintaining a strategic overview of the NHS and its performance in their area. They will be responsible for ensuring that the organisations commissioning and providing local services are doing so in a way that meets the key national objectives of a healthier nation and care services, which are high quality, safe and fair and responsive to changing circumstances.
16. The Government is proposing to reduce the number of SHAs across the country, because in the future they will be responsible for a reduced number of larger PCTs and a smaller number of NHS Trusts, as more gain Foundation status. (Foundation Trusts are not accountable to SHAs.) The national proposals are that SHA boundaries largely match those of Government Offices for the Regions, helping SHAs to work more closely and strategically with public sector partners to streamline services.
17. There are currently four SHAs within the south east. Thames Valley sits in the region covered by the Government Office for the South East (GOSE). This is the largest Government Office area in the country, stretching around London from Thanet in the south east to the New Forest, Hampshire, in the south west and to Milton Keynes in the northwest. It has a population of eight million people and has 19 county and unitary councils and 55 district councils. The overall pattern of health in the south east is good and appears to be above national norms, but the size disguises significant variations and a number of complex challenges.
18. A number of national criteria have been used to assess proposals for the configuration of SHAs, including consistency with the boundaries of the Government offices, provision of significant savings in management and administrative costs for reinvestment in front line clinical services, and enhanced effectiveness and fit for purpose.
19. Two options for the configuration of SHAs in the south east have been proposed:

• Option One - one SHA coterminous with the Government Office South Eat, covering Berkshire, Buckinghamshire, Milton Keynes, Oxfordshire, Hampshire, Isle of Wight, Surrey, Sussex, Kent and Medway.
• Option Two - two SHAs for the south east:

1. An SHA covering the counties of Berkshire, Buckinghamshire, Hampshire, Isle of Wight, Oxfordshire and Milton Keynes
2. An SHA covering Kent, Medway, Surrey and Sussex

20. The SHA consultation document provides a helpful summary issues relating to the two options, as follows:

Criteria	Option 1 – one SHA in the South East	Option 2 – two SHAs, implications for Oxfordshire
Government Office boundaries	Coterminous boundaries	South East Region divided into two
Management cost savings	Maximise cost savings	Cost savings achieved but less than for Option 1
Effectiveness: size and diversity	Serves a diverse population of 8 million; very weak regional identity; commentators perceive the proposed singe SHA as very remote; difficult east-west communications	The SHA would serve a population of 3.8 million; weak regional identity; proposed SHA perceived as less remote; good north-south and east-west communications
Effectiveness: number and complexity of healthcare organisations	Possibly 18 proposed PCTs, two Ambulance trusts, 37 NHS Trusts, Foundation Trusts or Care Trusts. At the limits of what can be effectively performance managed.	As many as 11 proposed PCTs, 1 Ambulance Trust, 16 NHS Trusts, Foundation Trusts or Care Trusts. Within the limits of what can be effectively performance managed.
Effectiveness: number and complexity of other partner organisations	Seven county councils, 12 unitary authorities, 55 borough and district councils, 83 parliamentary constituencies, three medical schools. A very challenging set of political and managerial relationships.	Three county councils, 10 unitary authorities, 20 borough and district councils, 39 parliamentary constituencies, two medical schools. A manageable set of political and managerial relationships.
Effectiveness: the scale of the financial recovery	The combined deficit of the four SHAs at the end of 2004/05 was the greatest in the NHS. There is a high risk that the management capacity in one intermediate body covering the south east will be inadequate to deliver the recovery programme and maintain financial balance.	The management capacity in two intermediate bodies covering the south east is more likely to deliver the recovery programme and maintain financial balance.

21. Members of the Cabinet and JHOSC are asked to consider the implications of the two options for Oxfordshire. The Cabinet should also consider whether the options have implications for partnership working with NHS bodies and with the neighbouring social services authorities.

Consultation on Configuration of the Ambulance Trust

22. NHS ambulance trusts are the first and often the most important contact for all people who call 999 each year. The range of care that they provide is also expanding, to take healthcare to patients who need an emergency response, providing urgent advice or treatment to patients who are less ill, and care to those whose condition or location prevents them from travelling easily to access healthcare services. The Government is proposing to change the way that ambulance trusts are structured and managed. The proposals do not involve changes to service provision.
23. The proposals to change the configuration of ambulance trusts across the country follow a national review of ambulance services, which was published in June 2005. The review recommends an expansion of the services provided by ambulance trusts in addition to maintaining a high-quality emergency service. In order to achieve this longer term change, the Department of Health has accepted that there should be significantly fewer ambulance trusts to enable them to have the infrastructure, capacity and capability to deliver and sustain the changes needed. This consultation, led by the SHA on behalf of the Department of Health, focuses on the number of ambulance trusts and how they are structured.
24. There are currently 31 ambulance trusts in England. It is proposed that this number is reduced to 11 larger organisations, which would provide an opportunity to improve quality whilst delivering locally. The proposed configuration will need to fit with NHS and local/regional organisational boundaries to support joint planning and service delivery of health services. In addition, they have a duty to work at regional level to plan for events such as chemical, biological, radiological or nuclear incidents, terrorist attack or natural disasters. The Department of Health believes that having fewer, larger trusts would make it simpler to build the effective relationships with stakeholders.
25. It is proposed that the new configuration of ambulance trusts should be based on the boundaries of the Government Offices for the Regions. However, within the South East Region, it is proposed that there are two ambulance trusts, based on the boundaries outlined in Option 2 of the proposals for the configuration of SHAs. The Department of Health is proposing the split of the Government Office Region into two because this is a large geographical area, which is densely populated.
26. The benefits of the proposals have been identified as follows:

• improved patient care by raising the standards of service provided by the trusts
• reduced management costs, which would be re-invested over a number of years in front-line ambulance staff, equipment and services
• further improvements to the way that ambulance trust plan for and deal with terrorist attacks or natural disasters
• improved patient care through greater capacity to check that patients are receiving quality care
• better and more effective management, a better equipped and trained workforce and the ability to adopt best practice quickly and consistently
• greater financial flexibility and reliance
• more opportunities for staff.

27. This consultation has only identified one option for the Cabinet and JHOSC to comment upon. The Cabinet and JHOSC should consider this consultation in conjunction with the consultation about the configuration of the SHA for the area.

Timescale

28. A Human Resources Framework has been agreed by the Department of Health, NHS Employers and the NHS trade unions that outlines procedures for appointing senior staff, chairs and non-executive members. The process involves new chairs or acting chairs being appointed for PCTs by May 2006, as well as chief executives for the new SHAs. Together these will manage the appointment of PCT chief executives from a pool of approved candidates that will be compiled during the first months of 2006. PCT chairs and chief executives will develop the structure of the new organisations. They will then appoint senior management followed by complete teams, prioritising staff from the existing pool of displaced staff in their local health economy. During the transition period, staff will be given certain employment guarantees.

RECOMMENDATIONS

29. The Joint Health Overview and Scrutiny Committee is RECOMMENDED to agree its response to the consultation on the basis of:-

(a) its assessment of the impact of the proposed configuration of each of the three NHS organisations on the delivery of health services to local people;

(b) whether it agrees with the preferred option for the configuration of PCTs and the SHA as applicable to Oxfordshire;

(c) whether it agrees with the proposed configuration of the Ambulance Trust.

30. The Cabinet is RECOMMENDED to agree its response to the consultation on the basis of:-

(a) its assessment of the impact of the proposed configuration of each of the three NHS organisations on partnership working between the County Council and the NHS;

(b) whether it agrees with the preferred option for the configuration of PCTs and the SHA as applicable to Oxfordshire;

(c) whether it agrees with the proposed configuration of the Ambulance Trust.


DEREK BISHOP
Head of Democratic Services

Background papers: Local Consultations on new Primary Care Trusts and a new Strategic Health Authority for Thames Valley, Thames Valley Strategic Health Authority, December 2005

Configuration of Ambulance Trusts In England, Department of Health, December 2005

Contact Officer: Brenda Cook, Health Scrutiny Consultant, Democratic Services Tel: (01865) 810824

January 2006

For the Cabinet’s information the Joint Health Overview & Scrutiny Committee on 26 January agreed a response to the consultation to the following effect:

"that on the basis of the impact of the proposed configuration of each of the three NHS organisations on the delivery of health services to local people this Joint Committee supports:

1. with regard to the configuration of PCTs within the Thames Valley area – option 1 ie. five PCTs: Milton Keynes, Buckinghamshire, Berkshire West, Berkshire East and Oxfordshire;
2. with regard to the configuration of SHAs in the south east – option 2 – two SHAs for the south east, one of which will cover the counties of Berkshire, Buckinghamshire, Hampshire, Isle of Wight, Oxfordshire and Milton Keynes;
3. with regard to the proposed configuration of the Ambulance Trust – the identified option ie. two ambulance trusts, based on the boundaries outlined in option 2 of the proposals for the configuration for the SHAs."