Oral evidence: Impact of the Comprehensive Spending Review on Health and Social Care, HC 678Tuesday 8 March 2016

Oral evidence, 8 March 2016.

Witnesses

Michael Brodie, Finance and Commercial Director, Public Health England, Professor Ian R Cumming OBE, Chief Executive, Health Education England, and Christina McAnea, Head of Health, UNISON, gave evidence.

Chair

Good afternoon. I am very sorry to have kept you waiting longer than everyone expected, and thank you for coming to this session examining the implications of the CSR. For those following from outside, could you introduce yourselves, perhaps starting with Ian Cumming?

Professor Cumming

Thank you. I am Ian Cumming, chief executive of Health Education England. We are the body responsible for educating, training and developing the future workforce in England for the NHS and other health carers.

Michael Brodie

Good afternoon and thank you for inviting us today. My name is Michael Brodie, and I am finance and commercial director for Public Health England.

Christina McAnea

I am Christina McAnea. I am head of health for the trade union UNISON, which is the largest health union in the UK.

Mr Bradshaw

Christina, you described in your evidence the Government’s CSR settlement for the NHS as relatively meagre. Is that not a bit grudging, given, as we heard in the earlier session, that it is one of the few areas of government not to suffer cuts and, compared with local government, where you also have a lot of members, it has been left relatively unscathed?

Christina McAnea

That is not how we would describe it. Our take on it is that it is seen in some quarters as a generous settlement because it has not been as drastic a cut as in some other parts of the public sector, but it is still a cut, none the less, in that it is not keeping pace with either inflation within the NHS or increased demand on the NHS. I know that you have had previous sessions on this where people have given you all the statistics, but statistically, or traditionally, the NHS had between 4% and 5% per year to meet those expectations and the current settlement does not go anywhere near that. Between 2010 up to 2020, there will be an accumulation of a settlement that is less than is needed to keep pace with inflation and meet the demand. We do think it is meagre. It is having a massive impact on the lives of our members who are providing those services and we get that fed back to us all the time.

Mr Bradshaw

Can you say a little bit more about the impact?

Christina McAnea

The impact is on things like not only their pay and conditions—particularly, pay has a massive impact—but if pay had kept pace with inflation, either CPI or RPI, the staff in the NHS would be earning a lot more than they are currently earning from 2010 up to now. Between 2010 till now, if I use a nurse as an example, if it had kept pace with RPI, a nurse would be earning £4,700 more today than they currently earn, and that is with the 1% pay freeze for the next four years. The reduction in relative worth of their pay can only get worse.

Mr Bradshaw

Is there not an argument that public sector workers and health workers, in particular, did fairly well under the Labour Government years and they also have good pensions, and that some sort of readjustment was justified given the fiscal situation the Government found themselves in after the global financial crash?

Christina McAnea

You have to go beyond even the Labour Government then, because the Labour Government were investing in public services because they had been so severely run down through the previous Administration. That is certainly my union’s perception of that, and, indeed, we would say there is evidence to support it. What the Labour Government did, I think, was invest in public services, and that meant bringing up the pay of groups like teachers and nurses, who had fallen quite significantly behind other groups—if you like, other comparable groups. There is not a strict comparison because most teachers, nurses and a lot of people who work in the public sector do jobs that are provided predominantly in the public sector, but if you compare them with what is happening to other graduate professions, they have fallen quite significantly behind. Since 2010, there has been much more stagnation. We would say that we still have good public sector pensions in this country and that was always the kind of quid pro quo for taking a job in the public sector. Nobody expected to get huge bonuses; nobody expected to become very rich if you took a job as a nurse or an occupational therapist; but you would have some security of employment and a decent pension at the end of it. That seems to be being eroded.

Mr Bradshaw

Is the situation you described having an impact on recruitment, retention and morale, and, if so, what?

Christina McAnea

There is an impact on recruitment and retention. The latest staff survey has just come out this week, or last week, and has shown that there are some particular areas where recruitment and retention is a problem. It is not endemic across the whole of the NHS, but there are certain areas, both geographical areas and certain professional groups, where it is becoming an issue. Certainly, what we get fed back from our members, and again some of this is reflected in the staff survey, is that many of the staff feel they are having to go above and beyond. Something like 90% of them feel they do unpaid overtime. They come into work; they go above and beyond; they do not clock out as soon as their shift has finished. There is a lot of presenteeism—people turning up for work even when they are not feeling particularly well—and again that has come through in the staff survey. We have a nursing sector and healthcare assistant sector seminar in Cardiff next week, and I will be going down to that. When we go down and talk to them, the thing I notice most is that people say it is not as enjoyable to work in the NHS any more. People still love their job and like to work for the NHS, but that element of having time to talk to patients and interact more closely with them has gone from a lot of these jobs because there is such pressure on staffing levels. Particularly if you work in the acute sector and you are perhaps a nurse or a healthcare assistant, there is a lot of pressure on people to be there, do the job and get through the range of tasks that they have to do without having time perhaps to talk to and care for patients in the way they would like to.

Mr Bradshaw

Looking forward over the CSR period, what do you anticipate happening, both in terms of the service as a whole but also—if you want to answer this as well in your answer specifically—on public health and mental health, which has already been touched on in the earlier session?

Christina McAnea

I am sorry; can you repeat that?

Mr Bradshaw

What is your anticipation as to whether what the Government have promised in terms of resource will deliver what it is intended to deliver: seven‑day service, improvement and so forth?

Christina McAnea

There is a lot of concern about what will happen to pay. We have had the 1% pay freeze announced for the next four years, but, on top of that, that 1% cap is expected to cover the cost of the introduction of the new minimum wage. This year—we have just had it announced this morning—it will be 1% across the board for everyone. That is because at the moment the NHS is higher than the basic; it is £2 an hour higher than the minimum wage. That might be the case the following year, but from 2017 onwards that is not expected to be the case. From 2017 onwards, that 1% that we would consider very meagre will not be able to be distributed in the form of a 1% across the board because, if it is having to cover, in England—this is only for England—the cost of paying the new minimum wage, it cannot be 1% across the board. There are disparities now existing across the four countries, so we have the Welsh and Scottish Governments committed to the living wage, not the minimum wage, and England and Northern Ireland not committed to that; so we will start to see a difference there. We are under pressure to do things like look at restructuring and reforming the Agenda for Change contract, which I have to say we are happy to look at. Any agreement that is more than 10 years old should be looked at, should be refreshed and you should look to see whether it still meets the legal requirements and is still the right thing to have in the sector. We are happy to have that discussion, but, often, a restructuring or a reorganisation of a pay structure will cost money, certainly in the short term. It may lead to longer‑term savings, but it is very difficult to do these things without cutting if you are going to change them but still give an element of protection. That cannot be done within the 1% pay cap that has been announced.

Dr Whitford

Could I ask this particularly to Professor Cumming? The £8 billion settlement is predominantly within NHS England, and public health and health education do not fare quite so well. What do you feel is the likely impact of that on health education and training the workforce?

Professor Cumming

From Health Education England’s perspective, in what was a generous settlement for the NHS in the context of what other Government Departments had, the settlement that we reached was flat cash. Effectively, that means that for every £100 we receive this year we will receive £100 in 2020, with the exception of £1.2 billion that perhaps I will come back to in a moment. In terms of that flat cash settlement, that means that we have to improve our efficiency by inflation on an annual basis to maintain our purchasing power, to continue to achieve what we are achieving in 2020 compared with now. That leaves us with a substantial sum of money, £3.8 billion, give or take, to invest in the current and future workforce. A decision was made in the spending review that the money that we currently spend on commissioning predominantly undergraduate but some postgraduate programmes from universities would be taken to the Student Loans Company in a different funding route, and the money that we currently spend on bursaries, in particular for nurses and allied health professions, would also transfer to the Student Loans Company from 2017. That accounts for about £1.2 billion. The impact on our budget is that as we cease to have that expenditure, because it is transferred to the Student Loans Company, it will be taken out of us, so in financial terms there will not be an impact on that as a result of the policy decision because we will lose it in accordance with the expenditure moving.

Dr Whitford

Do you feel you will be able to meet that efficiency and deliver the health education and training, particularly as the Government are talking about 5,000 extra GPs? That is a lot more people to be trained and more nurses to be trained.

Professor Cumming

It is a lot and it will always be a challenge for us to constantly improve our efficiency, but, at the moment, on the levels of commissions that we are making, there will be a net available additional 25,000 to 80,000 members of clinical staff that the NHS could employ by 2020. We are anticipating, as I think the Committee has heard me say before, by 2019, that we will be back into supply and demand with regard to nurses, but we are anticipating over that next four‑year period, for example, that there will be a net additional 11,000 doctors who are already in training at the moment. Almost everybody who will be a member of clinical staff available to the NHS by 2020 is already in training, so we can be reasonably sure about these numbers. There are perhaps a few who may enter in 2017 on nursing programmes or AHP programmes that would add to that, but almost everybody who we will use as a clinical member of staff is now in training, so I can give you the actual figures. Assuming that the turnover—the loss of people from our NHS—remains the same, we will have quite significant growth in the workforce available for the NHS to employ.

Dr Whitford

During that time, you will be starting to train the people who are for 2020 to 2025, so are you confident that you can make these efficiency targets and keep this flow of people into medical and nursing training?

Professor Cumming

If we leave medical—we will come back to it in a moment—all the nursing and allied health profession commissions that will be made by HEE have now been made, because any made in the future will be made on the basis of the Student Loans Company arrangement. The last big numbers of HEE commissions will start in September of this year, 2016; there will be some small numbers starting next March, but, beyond that, it is a transfer to the new system. With regard to doctors, we will continue to provide the training at postgraduate level for doctors and we are not factoring in any reduction in the number of doctors. We might make some changes between specialties, but we are not factoring in any reduction in post‑graduate training for doctors.

Dr Whitford

What do you think the effect will be of the removal of the nursing bursary?

Professor Cumming

If I may, I will answer that in terms of the bursary and the fees because I think you have to consider them together. There are opportunities and disadvantages in both the current system and the new system. The current system is cash constrained. We can only commission the number of places that we can afford in terms of the level of resource that we have, and we know that on an annual basis there are roughly three applicants for every place at nursing school, so there are many more people who want to train as nurses than we are currently able to make available training places for. Clearly, a shift to the new system will result in individuals incurring debt through the student loan system, but if people are willing to incur that debt, then there will definitely be more opportunities. I am talking to universities at the moment that are intending increasing the intake on nursing, physiotherapy and various other programmes, utilising what they expect to see as an increasing number of students coming through and accessing the student loan. On the bursary component, of course, at the moment there are two parts to it. There is the means‑tested component that is dependent on family income, and there is the non‑means‑tested component that everybody receives. Again, this will transfer to the loans system, where everybody will be able to access more as a right. As to the non‑means‑tested part of it, if people wish to borrow a greater sum of money to see them through their course, they would be able to do so. There is a greater access to resource but people will have to start repaying this once they hit that £21,000 of income.

Dr Whitford

What is your estimate of the debt that a nurse is likely to incur in training?

Professor Cumming

It depends on how much of the bursary component they draw down, but the student loan will be £9,000 times three years—that is, £27,000—and, in theory, you could see a similar amount of money being drawn down through the maintenance grant mechanism.

Dr Whitford

Do you not think that that will put off some people who do not have financial backing behind them to take this up as a career?

Professor Cumming

We have looked at the impact of the introduction of the previous student loan system and it did not seem to have a huge impact on the number of students applying in those days. That being said, we have to remember that quite a large number of people applying for nursing degrees in particular are mature entrants, and there is certainly some concern about whether people who may have family commitments or who may have mortgage commitments will be less likely to want to take out a student loan than somebody who is 18 coming straight out of school, which is why in our organisation we are looking at alternative routes to degree‑level nursing. We are out to consultation at the moment on the nurse associate role, which is an intermediate role that sits between healthcare support worker and degree‑level registered nurse, where people could earn and learn at the same time and progress, while delivering care to patients through to the nursing associate level, and progress from the nursing associate level through to the degree‑level registered nurse without having to go through the student loan system and the full‑time degree system.

Dr Whitford

That is going back towards the enrolled nurse that we used to have as a stepping stone to eventually getting to a degree.

Professor Cumming

It is a different role. We are out to consultation at the moment, but we are seeking to define what the roles and responsibilities of that individual are. It came out of Lord Willis’s report that he did for us, “Shape of Caring”, looking at the needs of the nursing profession. He clearly defined a role for us that sits between the degree‑level registered nurse and the healthcare support worker that can be used as a progression route. That is something that we are keen to do. We are seeking to have 1,000 people enter training this calendar year and then grow that number over the next few years into that first nursing associate role, and then have a pathway through to degree‑level registered nurse.

Dr Whitford

Can I ask you to come in on that, Christina, because a concern I have is the fact that it is an older age group with other commitments, and this will put people off at exactly the time we want more people in?

Christina McAnea

We are hugely concerned about this. Our strong argument is that we think the Government are rushing this through without enough research to back it up. Ian has already alluded to some of the things about the research that was done when you look at when they moved to a loan system last time and when they increased it. It does not include healthcare students because they were not affected by that last time round. Particularly for the nursing students, the demographics of that group are very different from the demographics—and Ian has already said that—of your normal university intake. The average age is 28; 50% of them have child care or caring responsibilities; they are more likely to come from a poorer background; they are much more likely to be women; they are more likely to be BME students; a significant number will have had a previous degree and then will have to take on this additional debt. Our estimates are that it is about £51,000‑worth of debt that people will be coming out with in 2020. If we are assuming a 1% increase over the next four years, pay will be just over £22,000, starting salary, so most of them will immediately go on to having to repay their student loan, which will mean £900 in their first year. In effect, you are talking about a £900 pay cut for someone who goes through this, takes out the money, the loans, et cetera, and then in their first year they will be paying back £900. We think that is very significant. I want to comment as well on the figures around the numbers of students who apply and then do not get accepted. Again, there is a lack of information and data here about why and at what stage in the application people are being rejected. If you are a nurse or a healthcare professional student, in most cases you will go through a far more rigorous application and can be rejected for a number of reasons, so the fact that it is not just—

Dr Whitford

Do we have any evidence on whether it is about not meeting the standards or just numbers?

Christina McAnea

I do not know if Ian has it, but we have been trying to get that information and it has been incredibly difficult to get it other than just picking out bits and pieces from different bits of information. It is not easy to get the hard data, but we know they do go through a much more rigorous process, particularly post‑Francis where all institutions are having to assess the suitability of the candidates for these particular training courses.

Dr Whitford

We do not have the tuition fees in Scotland anyway, but what would be the one ask—I do not know whether it might be for all students or particularly the mature students—from your union such that, if the Government could just change this, it would have a lesser effect?

Christina McAnea

To be honest, you would have to reverse this decision, and I know that is going to be incredibly difficult, or at least you would have to put in some system where you were giving students something to compensate them for the periods during which they are doing clinical placements. That could be a way of overcoming some of that if—we do not want to call it paying them—you actually recognise the fact that they have to put in substantial amounts of time in clinical placements. It means they work shifts and weekends. I have to say that a bit of me feels that, instead of taking away the bursary, you ought to be paying them a salary as a healthcare student. If we could get something in as a recognition of that, it would make a significant difference. When they are doing the placements, it makes it more difficult for them to take part‑time work as well to help them supplement their income.

Chair

Thank you. Before we move on to the next question, Ian, have you seen an impact on the number of F2 doctors who are moving into the next stage of their training? Have you seen a fall‑off in the numbers?

Professor Cumming

We have not, as those figures have not closed yet. The applications are still open, so we will not know until that round closes.

Chair

When will we have that data?

Professor Cumming

We will have an indication towards the end of March in terms of the F2. The F1 round has closed and the analysis has just been done on that, so that is entry from medical school into F1. The F2 into specialty training is the end of March—the 22nd, from memory.

Chair

Would it be possible for you to write to the Committee in time for that data to appear in our report?

Professor Cumming

Yes, it would be a pleasure.

Chair

That would be very helpful.

Dr Davies

Professor Cumming, what are the main features of your workforce strategy for the NHS during the comprehensive spending review period?

Professor Cumming

The clear No. 1 overarching objective that we have had over the last few years is to make sure that we produce the number of nurses that the NHS, but also the social care environment, needs in this country. I will not repeat what I said last time I talked to the Committee, but the expansion in the number of qualified nursing posts of 24,000 is absolutely unprecedented over a two to three‑year period. We only train about 20,000 nurses a year, so we are very much playing catch‑up in terms of trying to produce the number of nurses to meet this demand. Roughly speaking, at the moment, about 7.5% of all clinical posts across England are vacant, but that hides a number of issues. In parts of London, that figure is 15%, and in parts of the north‑west that figure is 3.5%, so it is very variable. Our No. 1 issue has been getting the balance right in terms of overall number but also geographical number. The next area we have been taking forward, and this links back to some earlier questioning from the panel, is making sure that we protect the parity of esteem professions to ensure we have the continuing supply of workforce through into mental health, and that we meet the Government objectives around primary care—Dr Wollaston has already mentioned the 5,000 additional doctors working in general practice—to make sure that we have that workforce coming through. I suppose the final key area of responsibility in terms of the new workforce is focusing on where we need to do things differently, where we need to deliver change. Physicians associates would be a good example of that. The separate strand of work is around the current workforce. If we are looking at transforming our NHS in accordance with the Five Year Forward View, the future workforce are important, but the future workforce are not going to deliver the Five Year Forward View for us because the Five Year Forward View is now going to happen in the next four years. Therefore, what do we do to transform the current workforce to make sure we deal with their education and training requirements to help people think about the sorts of issues that you heard about in the previous evidence session—best practice in orthopaedics, for example? That is about educating and training the current workforce, not the new.

Dr Davies

What elements of the strategy that you have are you most concerned about not being able to deliver?

Professor Cumming

The level of expenditure, the flat‑cash settlement that we have received, has allowed us in 2016‑17 to commission adequate workforce across every heading to meet this range of 25,000 to 80,000 people that we believe we need for the future, which also picks up the seven‑day issue, as we understand it, again going back to the earlier aspects. The area where money is going to be tight for us will be around some of the resource that we traditionally have helped NHS Employers with to run courses and programmes for their existing workforce. Effectively, we have focused on our core statutory responsibilities to deliver the future workforce and we may have to cut back a little on the amount that we spend on the continuing professional development life‑long learning activities.

Dr Davies

It is expected that money is going to be tighter in the later years of the CSR. Does that pose you any specific concerns?

Professor Cumming

In parallel with the flat‑cash settlement, we are looking at how we improve the efficiency of our own organisation. Along with many other arm’s length bodies, we are looking at how we take 30% out of our running costs over the next three years. That is resource that we would then look at recycling back into being able to fund the continuing professional development and life‑long learning aspects and some of the other programmes there—particularly postgraduate medical programmes—that we fund. It is going to be difficult, but with a 1.5% to 2% efficiency ask on our organisation on an annual basis, our board believes that that is deliverable.

Dr Whitford

To follow on what we have been talking about, particularly developing the current workforce to meet the Five Year Forward View, what do you think the impact is of the current dispute with junior doctors and, in essence, the bit of that that is a breakdown of relationship as opposed to the nuts and bolts of money or contracts?

Professor Cumming

Clearly, it has had an impact on morale and motivation of our junior medical workforce, who are absolutely fundamental to delivering the quality of care. Certainly, we are working through our postgraduate deans and various programme directors and leaders to make sure the educational component remains robust and that those individuals can not only deliver the day‑to‑day service but also receive the training that they need to allow them to progress.

Dr Whitford

I got a letter from a junior doctor whose rota is meant to have 13 doctors but only has seven on it, and they do not get to engage in any training at all. They are totally working lots of overtime, firefighting, and feel that the job that is coming to the end in the summer has not delivered the skills that are necessary.

Professor Cumming

If that is in England, if you would like to pass that through to me, we will certainly take a look at it, because, from our perspective, part of our responsibility is to make sure that the amount of money that we fund to employers for junior doctors is used for training purposes. So 50% of the basic salary of most junior doctors is funded by HEE and that is training time. The balance is funded by employers and that is service time. We recognise training places on a regular basis with colleagues from the GMC to make sure that everybody is gaining training in that environment as well as delivering the service. They are equally important. If there is no training going on, we would want to know about and be looking into that.

Chair

Could I bring Michael Brodie in next, to ask your view about whether or not there is enough allocation from the CSR to fund the improvements we need to bring in the Five Year Forward View public health commitments?

Michael Brodie

It is interesting because we have been talking all day, have we not, about the finance gap, which was one of the three gaps in the Five Year Forward View, and actually the wellbeing gap is as important? From our perspective of the CSR, there is a mixed impact. There are some things that we welcome, some that are a challenge and some, I think, that present an opportunity. We welcome the additional funding in the context, as Ian said before, of everything else, of the funding that has gone into the NHS; that is very welcome. Healthcare of itself is not enough, but it is certainly a good start, and a confident NHS is important. We welcome the continued funding of our leading screening and immunisation programmes and the additional programmes that will join that this year through the public health funding that the NHS continues to hold. We welcome the investment in public health science that Public Health England will receive over the next period as well. But there are definitely challenges. We are on record as saying that no cut in the public health grant is a good cut and there are challenges around the local government public health settlement. In context, it is probably worth being aware that we can have this conversation now because up until the reforms nobody knew and nobody talked about how much was spent on public health; it is transparent now—and it is transparent across a range of categories—that local government needs to spend across, and that is really important. It is probably worth reflecting that, had public health stayed within the NHS in the current financial climate, there is a fair chance that public health budgets would have suffered equally as well. It is also important not just to focus on the quantum—the level of the grant. It is about how well and wisely it is spent. You have heard from DPHs over the last week or so about how local government has had to develop really strong skills in commissioning and procurement and how it is spending that money more wisely. The final thing is that, if all we focus on is the level of the public health grant, we have somewhat missed the point of why public health has transferred into local government, and it is about not just the £3 billion but the entirety of the £100 billion that local government has to spend. It is probably more than that; it is around a place. We have talked a lot about place‑based planning, and there is something as well about how we move towards place‑based financing so we are not thinking about the institutions and the organisations and the statutory bodies but about the people that we serve and the places that they live in. I can give a good example of that. If you think about the fire service, which 20 years ago made that transformation from dealing with issues to prevention, they are welcomed into 750,000 homes every single year and they do—

Chair

We heard about that extensively last week from Michael Marmot, but the bigger question is: do you feel there is sufficient money within the settlement to allow the prevention arm that was part of the Five Year Forward View? The whole point about the Five Year Forward View is that closing the gap was dependent on delivering prevention. Do you think there is enough money there to deliver on that prevention?

Michael Brodie

We would rather not have seen the cut, but the real opportunity is moving towards place‑based planning so we have the sustainability transformation plan.

Chair

That was not quite my question. Do you think there is enough within the settlement to achieve the aims within the Five Year Forward View?

Michael Brodie

There is enough within the system, so there is £100 billion of NHS spend and £100 billion of local government spend. If used appropriately, then there is, yes.

Chair

The local government settlement was also very challenging. There are two parts of the system, as you were saying, that need to work together, both of which have had quite a significant cut.

Michael Brodie

Yes, and that makes it all the more important that we think about the Devon pound, the Newcastle pound or the Leeds pound, rather than the statutory bodies from which they come. In its totality, yes, we should focus on the assets that we have and we think there is enough, but it needs to be spent wisely.

Chair

What we heard from the three think‑tanks—the Nuffield Trust, the Health Foundation and the King’s Fund—was that they did not feel there was £8 billion extra going into the system. They felt it was more likely to be £4.5 billion if you looked at the way the baseline had changed, so that the increase in £8 billion was going to NHS England rather than the NHS as an entirety, and it is public health that has suffered in that change in the way that the baselines have moved. You have said very clearly you think there is enough there if we look at the whole system, but what do you think might suffer as a result of that? Which areas are you concerned about? Are you concerned about, for example, public mental health? Which parts of the system are you going to be watching most closely to check that we see progress?

Michael Brodie

Fundamentally, it is down to local areas to decide what their priorities are. They do their JSNAs and they have their local health and wellbeing strategy, so it is important that it is a locally led system and they decide, but we will obviously monitor the range of indicators in their public health outcomes framework; 75% of those are still heading in the right direction, so we will continue to track that. Inevitably, there will be a shift away from the biomedical model to looking at more about the social determinants of health, because, if there is not, then what was the point of the transfer? The risk will be in areas more around tobacco control and potentially sexual health as well, just as local government looks to new and different ways of commissioning services, so perhaps not commissioning based just on morbidity or an area but on the concept of wellbeing hubs. When somebody comes in, they are not just looked at for whether they smoke, but it is around issues of obesity, whether they smoke, is there an alcohol problem as well, and we treat the whole person rather than individual ailments.

Chair

Within the system, what would be your role, Michael, in seeing what is delivered?

Michael Brodie

We have probably five roles. Again, it is a locally led system, but the first thing we do is provide the transparency, so we provide the data and the information on which everything is produced. We have the public health outcomes framework and we have produced products like “Longer Lives”, and we have a spend and outcomes tool that allows local government to assess how it is doing compared with like authorities. So we have the transparency and that is really important. We provide the evidence to support what works and what is best practice, and we know there is more we can do here, particularly around return on investment, so we provide the evidence base. Then, if we think that a particular authority is struggling in a particular area or outcomes are not good, we use our relationships. We are not an inspectorate or a regulator, but we provide expert advice so that we can provide that support. If that does not work, or if there is a particular issue across a theme, then we can do a thematic review, just as we did a year and a half ago around drugs and alcohol. We supported the 40 local authorities that were finding the biggest challenge in drug re‑admissions. So we can provide thematic support that way. Ultimately, if there is an issue beyond that, we will support the sector‑led improvement process and help local government to support itself.

Chair

Thank you. Can I ask a similar question, Christina, to you about social care? Do you want to comment at all on the effect of the precept for social care and whether that will have an effect?

Christina McAnea

Yes. I saw that you have already had some evidence on that and I would say we fall squarely in the camp of saying that we do not think it is going to have a significant impact. In fact, all the evidence says that the precept will just make the disadvantaged local authorities even worse off because those that can raise the least from council tax are those that spend the most, usually, on social care. The big issue for us is around what has been happening to local authority funding. I know this was a big element of the earlier session—that link between what happens in the acute sector and what happens in the community sector and social care sector. We had a new survey come out last week—I do not know if it has been shared, but, if not, I can happily send it to the Committee—where we had a new look at what is happening in social care. Something like two thirds of our members are still saying they have been asked to do 15‑minute visits. Of the local authorities that replied to the survey, over 70% are still basing their service on 15‑minute visits, despite the NICE guidance that has come out. A huge percentage of our members do not feel they have enough time to give dignified care to people in their own homes, so there is still a massive gap in what is happening in the social care settings. We can certainly see a close connection between that and what happens in both the acute sector and the ambulance sector, their response times and the waiting times they have at hospitals; there is an absolute link between all those things.

Chair

You do not have much confidence in the precept to do this.

Christina McAnea

No

Chair

What is your view on the Better Care Fund?

Christina McAnea

We would like to see more of that money being delivered up front to local authorities and being given the money sooner rather than the way it is going to be spread out. There is still a lack of clarity over how much of that is new money and how much is coming from the existing funding that is going into the NHS and the money that is coming from local authorities, but it is not enough to make a difference, given the level of cuts that local government has seen. We are talking about a minimum of 40%, but for some local authorities it is as much as 56% to 60% cuts. Although most local authorities have tried to protect their social care funding, I think the Association of Directors of Adult Social Services still estimate that, roughly, 25% cut across the board in social services, so the Better Care Fund does not go anywhere near making up for that, and certainly the money that can be raised in the 2% precept does not go anywhere close enough.

Helen Whately

I am going to bring us to the question of efficiency and build on the conversation we had with the previous panel, and particularly ask you, Christina, whether you agree with what we heard—that there is room for improvement in efficiency in the NHS. What is your view on that, and how do you think the NHS could make savings?

Christina McAnea

You would like to think there is always room for improvement— always room for things to be done better. On the grand scale of things, the level of savings that is expected to be made, we would share the scepticism that many of the think‑tanks have: that £22 billion is not achievable. Even when you look in detail at some of the stuff that came through Lord Carter’s review—and I echo some of the points made in the earlier session—obviously, where you have big differences, when you compare the differences between trusts, there is work to be done. I was a bit disappointed in that some of the solutions that came through from Lord Carter seemed to be—instead of being what we had heard was going to be a more nuanced approach, about working with individual trusts to make things better—more in favour of that top‑down approach: “Here is a target; you have to reach it.” If you look at what has been said around admin costs and corporate costs, so the move to get down to 7% and then 6%, when you have some trusts whose costs are currently 10% and 11%, just setting a hard target like that will be incredibly difficult for them. It is easy to fall into the trap of thinking that any money that is spent on admin or corporate costs is wasted money in the health service when clearly it is not.

Helen Whately

I can agree with you that in fact money on management and admin is important, and we all know how unhelpful it is when, for instance, clinical staff are given admin roles because of short‑term saving cuts to get rid of ward clerks, for instance, so I completely understand what you mean there. I would particularly like to understand, although you might not be entirely happy with some of the details in the Carter report, what you see as the opportunities. You might not agree that there is a £22 billion opportunity, but, from your perspective, representing your members, what do you see are the opportunities, because there is not an infinite pot of money?

Christina McAnea

There is lots to be done in terms of looking at the equipment that is used. As to some of what Lord Carter said about the type of equipment that is used in certain operations—if you look at hip replacements, he talked about people using different products for some of these things and the difference in cost, differences in the cost of pharmaceuticals and even basic things like the procurement of certain products or services that are used in different trusts—I am sure there is work that can be done, but our view is that that is something that is best done with individual trusts and being pushed in the right direction rather than being told, “This is an absolute target.” Yes, we would completely agree with that. One way we would also say—

Helen Whately

It sounds like you would support what I have heard is the feedback on the Carter report, that there was a huge amount of engagement around that and many trusts have been very supportive and found it very helpful. You are very much wanting an engagement, not a top‑down approach, and you are agreeing there are opportunities.

Christina McAnea

I am sure in any organisation there are opportunities to save money and be more effective, but we are very much against this hard and fast, “This is what you will have to do to make those savings,” because you would have to recognise the differences between trusts. If you are a large trust, like Northumbria, that is trying to cover Northumbria and Cumbria, you have various centres to cover and you are running clinics across a large geographical area, so the chances are you may well employ more admin staff to be the people who are dealing with patients as they come in than perhaps another trust; so your percentage, of course, will be higher.

Helen Whately

I do not know that it is very helpful to start trying to unpick the details of the Carter report in here, but I take some reassurance that you say there is an opportunity. I want to pick up something that was in your written submission that talked about the UK falling behind other countries on healthcare spend as a share of GDP and specifically referenced Finland, Iceland and, I think, Slovenia. The latest OECD figures that I have seen on those countries, which are from 2013, showed that their publicly funded healthcare share of GDP was lower and they only came over the UK through the private funding of healthcare. Given that you particularly referenced those countries in the UNISON submission, is that a model that you think needs to be considered?

Christina McAnea

No, it is not, but we are looking at overall spending within economies—how much money is going into the health service. We would certainly share the view that a lot of health economists have, which is that health economies such as the United States, which spend a much higher proportion of their GDP on healthcare—but in the United States that almost predominantly comes from private spending—are not necessarily efficient or effective and do not necessarily get better outcomes. It is worth looking at what we as a nation spend on GDP, and I think it is a fair comparison to look at the amount that has gone in in any of these countries, whether it is coming from a public or a private source. The reason it is coming from a private source in those countries is because the public spending is so low and so people are paying an insurance premium into health.

Helen Whately

Something I have heard generally in some of your responses is that you are pushing for more money to be spent. If we look back over the last few years, we know the NHS has been given £10 billion, which is a bit more than the £8 billion that it asked for, and, as at the last election, there was not another major party in fact proposing to put more money into the NHS. Do you have a worry about the difference in what the workforce is calling for and what people involved in the health service are calling for, in terms of money and what the public is willing to spend? Is there something out of step there between what the NHS itself wants and what the public is willing to pay for?

Christina McAnea

Yes, possibly. There have been some studies done, have there not, that show that, if you ask the public if they would be prepared to put more money in if it was going specifically to the health service, a high percentage come back and say yes, they would? I do not have the figures to hand—I am sorry—so I do not have a specific figure on that. I think there should be a more honest debate about how we fund the NHS and what happens to the money that goes into it. It does feel that it is a political football, and it would be good if that was not necessarily the case and we could have an honest debate about people’s expectations about the NHS. But that goes equally for Governments; I do not mean this specifically about the Conservative Government but any Government. If you look, for example, at the seven‑day services commitment, that has been a good example of where a Government make a commitment to do something but do not necessarily want to put the money in to make it happen, but you have already built up an expectation with the public now because you have said that you want to extend seven‑day services. People think, “What does that mean? Does that mean I should have access to anything over seven days or should I only be able to access emergencies over seven days?” The way that has been presented has perhaps been unfortunate because we have built up public expectation, but there is no money in the system to expand in the way that has been suggested.

Helen Whately

So it is important to have some clarity between what is being offered and what can be afforded. A final area to ask you about is the question of the agency pay rates, the cap to agency costs and whether you have a view that the cap that is being introduced will resolve that problem of higher agency pay and those high staff costs that are affecting provider deficits.

Christina McAnea

There are a number of reasons why staff go and work for an agency. In terms of an individual’s choice to go and work for an agency, part of that is because of the pay rates that they get—so they get extra money—but a big part is also about flexibility and they feel they have more control over the hours they are having to work by choosing to work for an agency. We had mixed views about the effectiveness of the cap, as in whether all this will do is just restrict the pay that people can earn in an agency. In actual fact, would it not be better to restrict the profits that people can make from agencies? I know there was an element of that because it is about the charges that companies can impose for agencies. Again, and I know this has not been published, I understand there is some information that is going to come out on whether it has been effective or not. Anecdotally, we get told that a growing number of trusts are seeking to get an exemption from applying them, so they are putting forward the arguments they have to put forward to be exempt from the agency cap. I am sure that a number of trusts have tried very hard to keep within that. I understand the Government are collecting that information, but I do not think they have published it yet.

Helen Whately

Can I ask you how you think the NHS could reduce its spend on agency staff or—

Christina McAnea

Yes. One would be if we had decent pay rates for some of the staff. The average pay of a nurse in the NHS outside London is £31,500. About £4,000 of that is the money they get from unsocial hours and overtime payments, so if you take that away you are talking of about £27,000. That is not a particularly high salary. When you look at things like leavers rates, the biggest group of nurses who leave are those who leave before retirement, so it is not just those who are retiring or getting over a certain age. There is a reason why people are leaving the profession.

Helen Whately

Earlier on, I think you said about nurses that the work is no longer enjoyable, part of it being not having the same amount of time to spend with patients. Is that not a significant factor rather than pay?

Christina McAnea

It is a mixture. Pay is not always the first reason people give for leaving the NHS, as I am sure you know, and that even includes people who are paramedics, who leave regularly. Pay is not always the top reason, but it is one of the reasons that they give for it, and it is that whole package of decent pay, more flexible working and the feeling of being valued and rewarded. That is the feedback that we get from our members—that it is not pay by itself, but the fact that there is a pay freeze and the fact that things are getting more difficult for them makes them feel that they are not valued in the NHS. That is also exacerbated by not having enough time to interact with patients, et cetera.

Helen Whately

That is a very important point—I have heard that a lot—not feeling valued being a significant reason for staff being unhappy and, ultimately, leaving. Professor Cumming, I saw you nodding. I do not know whether you had anything in particular to add to that.

Professor Cumming

Yes. There is variation between employers as well. I would certainly agree with Christina that pay is one factor, but it is the atmosphere, the environment, the morale, the motivation in the team, good leadership and good management in an organisation. We know that there is variation in sickness absence rates between organisations. We know there is variation in turnover between organisations. We have to look at what the very best organisations are doing to keep their staff motivated, because there is also a correlation between low turnover rates and the quality of clinical outcomes and the satisfaction of patients. If we identify what is happening in those best‑run organisations, best led, and I do not mean just the chief executive but the whole culture of the organisation, and then look at what is happening in those organisations where they are struggling to recruit and they have very high turnover, they are also the organisations that have very high agency usage, et cetera. I completely agree with Christina that pay is a factor, but I do not think it is the main factor.

Dr Whitford

Do you not think that the actual nursing ratio is the factor—and that is everywhere because of the increased demand and nurses are hugely under pressure—in that when I speak to nurses a lot of it is this feeling that they do not have time to care? There are marked differences in the nurse‑to‑population ratios between Scotland and England. There is also the fact that NICE looking at it was kind of shelved, which makes people feel that what impinges on their daily job has just been put back on the shelf. Do you not feel it is about the quality of your day? You went into nursing not to be paid huge bonuses but to carry the bonus home with you of the experience with the patient.

Christina McAnea

Yes, absolutely, and that comes across very strongly when we talk to our members, particularly the nursing members, but not exclusively. They are worried about safe staffing levels; we get a lot of comments especially from people who work nights and weekends about the levels of staffing at those times, and they are concerned about that. Again, it is hugely variable and some places are much better at managing that, but not all of them. That is the key—that there is huge variability across the sector.

Dr Whitford

In response to Francis, trusts took on extra staff, and to do it quickly it was agency staff; and that is now not allowed. As was mentioned, it takes quite a lot of time to bring on new staff. Are we not a little bit in danger of getting right back round the track to Mid Staffordshire or places running really close to the wind?

Christina McAnea

We still do surveys of our members and ask them things like, “Do you think something like Mid Staffordshire could happen in your area?” More people say yes than say no to that question, which is quite worrying.

Professor Cumming

If I may come in on that: the increased demand we have seen in nurses over the last three years, the 24,000 extra posts that have been created, have been created for by and large the same number of beds. Those 24,000 nurses were supposed to be going into the system to improve the quality, to put more nurses per patient in there. Of those 24,000 jobs, about half are substantively filled, so about 12,000 of those nursing posts have people in them. The balance of the 12,000 are filled by a mixture of bank, agency and overtime working. It is those posts we are seeking to fill through the increases in the commissions that we are making from universities. But it is important to remember that we do have 24,000 more nurses than we had three years ago for, broadly speaking, the same number of patients.

Dr Whitford

What do you think your nursing ratio now is after injecting 24,000 nurses?

Professor Cumming

From my perspective, the ratio is quite a blunt instrument in terms of how we look at this because we need to consider this in the round. For example, if you have a ward that is caring for people with stroke or dementia rehabilitation where they have occupational therapists, physiotherapists and nurses on the ward, where they have a good level of healthcare support staff backing them up, that will be a very different environment than, say, in intensive care. From my personal perspective, it needs to be a lot more sophisticated than a simple ratio in each area, but those 24,000 extra nurses are, as we hear from the CQC and other places, already having an impact on the quality of care that is being delivered, but we are only halfway there to filling all those jobs substantively. When we get that second tranche of 12,000 in, we will be in a very different place.

Dr Whitford

But there has been talk about headcount reductions. Do you think those posts will get filled or that some organisations, as they have to save money, will not fill jobs that were meant to be filled?

Professor Cumming

These are posts at the moment being filled by bank, agency and overtime. The NHS expenditure on agencies, as we have discussed, is high, and the employers are telling us at the moment that they really want the additional workforce that we are producing so that they can appoint substantive people into those posts rather than rely on the agency workforce, because the agency workforce is fine for particular times when you have flexibility needs or you have particular issues or challenges, but it is not the right workforce for the long‑term staffing of our clinical environment.

Chair

Can I ask, Ian, in otherwise comparable systems, are there some key things that you have noticed, trends in making some more effective at retaining staff in substantive posts? Are there others that you are starting to see emerging?

Professor Cumming

If I take junior doctors as an example, we talk to junior doctors up and down the country all the time. Some will say to us that in the organisation they are working in they do not know who the chief executive is and they do not know who the medical director is; that they basically come in, do their job and get their training. They know their immediate clinical team but do not feel part of the organisation. They feel they rotate through and move on to their next job, whereas they would describe other organisations that they start work in as part of their rotation where the chief executive is there to say hello to them on the first day, the medical director meets with them and says, “Here is my email address. If you have any issues, please be in touch.” They know who the local directorate manager is, they know who their clinical director is, and they are involved in some of the social activities and are made to feel part of a team. It has an impact on where people want to work after they have trained. If people have a bad experience in training, they do not want to go back there under any circumstances. That applies both to specialties as well as to individual organisations. We see that with junior doctors, but we also see it with other people on training placements. It almost becomes a self‑fulfilling prophecy. If people have a bad experience in training, they do not want to go back to that organisation so apply somewhere else, which means that the organisation ends up having a high reliance on agency usage, and agency staff tend not to be as active and involved in training as substantive staff, and therefore the problem becomes worse over time. How we stop and reverse that is one of the challenges.

Chair

You say the same applies for nursing staff as well.

Professor Cumming

Yes.

Chair

Thank you very much. Thank you all for coming this afternoon. We appreciate your time and evidence. Thank you. Oral evidence: Impact of the Comprehensive Spending Review on Health and Social Care, HC 678 40