Introduction

The last 18 months

It is great to be here, and thank you for the invitation. One of the strange things about leaving the service, as I did 18 months ago, is that there are all sorts of arrangements about what you can and cannot do. For the first year, I could not work in any capacity without the permission of the Cabinet Office. For the next year, I have to inform them when I am doing anything. For that reason, and because you lot do not need some old bloke like me going round talking about the NHS, I have kept well away from the NHS over the last 18 months. I have spent most of my time in other countries.

I have learned quite a lot from that experience. I have been on the outside, looking into the NHS, over what has been an extraordinary period for healthcare. I have had a self-denying ordinance not to engage in what is happening. I slipped slightly during the general election campaign. My wife said to me, ‘Will you stop shouting at the television and do something about it?’ I was absolutely beside myself about the lack of conversation in the general election campaign about the big issues that are facing the NHS over the next period, and in particular, the financial position that you find yourselves in and the consequences for not considering and discussing it after the election. In reality, the deficit is not what causes the problem. The problem comes when you try and tackle it, and that will inevitably be the story across the next few years in the NHS.

Perspective

I was then asked to do a lecture. I am not really well-known for doing lectures, so I would describe this as a talk, but I do believe that I have learned a few things over the last 18 months, and over the 30-odd years that I have worked in the NHS, which you may find helpful. I cannot say that I am a great policy pioneer, and I am not going to make any major policy pronouncements that will surprise and amaze you; that is for another environment. I will not be saying that the Department of Health should be abolished, or that the purchaser/provider split should be put in the dustbin of history, where it belongs. I will be talking about more mundane issues.

I can bring the perspective of someone who now uses the NHS, but is now outside of the mainstream of managing it, and who has spent a considerable amount of time swanning around the world. It is worth saying that the NHS is held in enormous esteem around the world in terms of healthcare systems; not just by policy-makers, but by people who run and provide services on the ground. It is seen by millions of healthcare professionals around the world as a beacon of what it is possible to deliver with a relatively small amount of money in a country like ours. There is no shortage of people who want to listen to what is happening in the NHS, and give you advice about what their experiences are.

The global context

Overview

The kinds of issues that you are tackling are exactly the kinds of issues that almost every healthcare system in the world is tackling. There are extremes of poverty and other extremes in different countries, but the nature of the demographic changes, the population shifts, the rise in people with long-term conditions, and the importance of giving more people control over their own healthcare are all playing out in virtually every country of the world. There is not a healthcare system in the world that has solved all of these issues, but generally speaking, people around the world would say that the NHS is in as good a position, if not better, than most to try to create a sustainable healthcare system for the whole population.

Individual impacts

Perspective is really important. Sometimes, when you read the newspapers or the documents, you come to believe that the only people who count are those who directly put their hands on patients. They are undoubtedly the most important, but all the people engaged in the NHS make a contribution, sometimes in surprising ways. Not long after the Mid-Staffordshire report had been published and the Daily Mail was engaged in its campaign to get me fired, I had to do a conference for patients and carers and their families. I had to be smuggled into the building in order to make the speech. Tim Kelsey was chairing the meeting, and when he introduced me, he said, ‘Before he speaks, you will have seen all of this in the newspapers about getting him fired. Put your hands up if you think he should be fired.’ That was quite a risk. As it happens, nobody put their hands up. People have told me subsequently that that is because they are all frightened of me.

After the event, a gentleman came up to speak to me. He said, ‘Thank you for the speech, but I have motor neurone disease’. I said, ‘How do you feel?’ He said, ‘I am okay at the moment. Can I just say how impressed I am that you are getting NICE to produce the guidance for motor neurone disease? It is really important that that happens. That would be one of the most important things you could do for everybody with motor neurone disease. Could I particularly thank you for identifying 2014 as when you are going to publish this guidance?’ I said, ‘Thank you. I do my best.’ He said, ‘The only problem is, I will be dead by 2014. Not only that; many of my friends will be dead by then. Do you think you could hurry it up a little bit?’ It really does bring home to you how significant some of these things are.

Only a few weeks ago, I met this chap in a pub, with all his friends. He thanked me for the fact that NICE had produced some guidance. As it happens, NICE still have not produced the definitive guidance. I explained to him that it was nothing to do with me at all. We talk a lot about guidance and other things that we produce; we do not often understand the significance that they have to people out there. That individual, and the people who he knew with motor neurone disease, could take that guidance to their general practitioner or district nurse and identify the care and support that they require. It is really important work that a whole load of people – some of whom will never come into direct contact with patients – are engaged in making happen.

International views

I was invited to go to Bellagio for five days. The Rockefeller Institute own an ex-monastery there, and I was going there for five days with 30-odd surgeons to talk about global access to surgery. It was a very interesting few days. On the last day, we went out for a meal at lunchtime. There were surgeons from Colombia, South Africa, Sweden, America, France, Italy, and parts of Africa there. I had my iPad, and I was going through the press coverage of the NHS in winter. I shared this with them, and they could not believe what was happening in our healthcare system, because they could not imagine a healthcare system that could deliver four hours in an emergency room from turning up to having treatment for nine out of 10 people.

The Swedes told us that they had moved it from four hours to eight hours. The South Africans said they had started to do it and then abandoned it, because it was simply impossible. They thought it was absolutely extraordinary that our healthcare system, given the environment we were operating in, could deliver that. That ‘nine out of 10’ figure was regarded as a catastrophic failure. For those of us who have worked on this for years, it was a failure, but it is a remarkable thing to do after little or no growth in the system. When you stand outside the system and look inside, you see a system under enormous pressure, but performing fantastically well for the people of this country.

Trust

The importance of trust

I want to spend the rest of the time talking about trust and money. Those two things are particularly significant to us at the moment. We all want to operate in an environment where we are trusted, and the only way that we will deliver some of the major financial challenges that we have is if we develop and improve trust in the system. Trust is really important for our system. It is important between patients and clinicians; between clinicians and the managers of organisations; between the people who work in organisations and their boards; between the population and the board; between organisations that deliver care and those that commission care; between those people who deliver and commission care locally and the national bodies; and it is particularly important between the NHS and politicians.

Consistency of purpose

At various times in its history, that trust has been stretched and pulled in all sorts of different directions, but we will not deal with the problems facing the NHS unless we work on how we can deliver a greater trusting environment to operate in. Part of this issue around trust is the predictability of the system we operate in. If people believe if organisations are operating in unpredictable ways – that, every day, something different happens in a way that people simply do not understand – you undermine trust and undermine the way things operate. Consistency of purpose is critically important to developing trust.

We all want to operate in an environment where we are trusted, and the only way that we will deliver some of the major financial challenges that we have is if we develop and improve trust in the system. Trust is really important for our system.

When I was a chief executive in Doncaster, that particular trust let me go on a sabbatical for three months, where I spent my time in other organisations and academic institutions, learning and getting myself ready to go to the next stage in terms of the development of my organisation. It is hard to imagine organisations that would be able to do that now. I spent my time with BMW, who had just taken over Land Rover, and they had a board director called ‘Director of Consistency of Purpose’. He was an individual who was responsible for making sure that the organisation focused on its strategy – on the things that it said it was going to deliver – and as other things came around, they adapted, but they were always consistently doing it.

It made me reflect on the lack of consistency of purpose that we have had for many years in the NHS. Can you imagine, if when Patricia Hewitt delivered Our Health, Our Care, Our Say – which set out the future of community services; how investment in primary care and supporting people with long-term conditions were to be dealt with – we had followed it from 2006 until now, how different the healthcare system would have been? The financial problems we had from 2005 until 2006 was minuscule compared with the challenges that you are dealing with now. We learned then that you make a judgment about what you want to do; you cost it; you challenge it; you test it; and then you implement it. You do not just announce something and expect something to happen. Can you imagine how different of a financial position we would be in today if that had been applied consistently?

In 2008, when we produced High-Quality Care for All, we determined that quality was the organising principle, organising that focus around quality of patient experience, safety, and the rest of it. If we had focused on that for the last six years, we would be operating in a very different environment. This idea of consistency of purpose is really important to build trust in any healthcare system, and particularly in ours. If the NHS in England is for anything, it is to create the umbrella to enable that consistency of purpose to be delivered throughout the healthcare system. It is really important, now, that we take forward the changes: the Vanguard system, the work from Lord Carter – all the things that we know we need to do. We have to consistently apply them over a number of years, and do not allow ourselves to be taken in a number of different directions.

The role of politicians

The scale of the challenge is greater than I have ever seen. I do not know if you have seen today’s Prime Minister’s Question Time, but I am going to answer a question I have had from Jeremy from Richmond House, which is, ‘Is this the worst financial crisis the NHS has ever had, and what should we do about it?’ I want to answer it by looking at the role of the centre, the role of organisations, and the role of politicians. Politicians bear a significant responsibility for the nature of the financial position that we find ourselves in, and for those of you who believe this is a provider issue, you are wrong. This is an issue for the NHS overall. I am partly responsible for some of this.

The scale of the challenge is greater than I have ever seen.

One of the lessons that we learned in 2005/2006 was that we could not find one example of a commissioner who turned round their financial position during that period without being given substantially larger amounts of money. We made the judgement that, however we constructed the system after then, we would ensure that the financial pressure was not evenly distributed between commissioning and provision, but was organised so that providers would take the bulk of that responsibility. That is how we did the tariff, and all of the rest. We always had to make a judgment about what was possible, and one of the dangers that we have here is people asking you to do things that they know – and you know – you cannot do.

From my experience working in regions, SHAs and hospitals, we can delude ourselves about all of that, but we are not doing right for patients or for our communities if we deliver a system whereby politicians expect the NHS to do things that we know we can do and, in their hearts, they know we cannot do, or where the centre asks hospitals, trusts, and commissioners to do things that they know they cannot do, and those people provide plans that they know they cannot deliver. That is a massively corrupting issue for the NHS as a whole, and we need to avoid that. That would be the end of the way we do business with each other, and we need to be absolutely alert to that.

Napoleon once said that, ‘When you are going into battle, two-thirds of what you do is based on the resources that you have, and a third is based on the morale of the people’. We need to find a mechanism for mobilising people. At the centre, you can do all sorts of calculations which, in a sense, satisfy you because they are intellectually sound. We can identify theoretical things that can be done, but actually, it is the practice that really matters. Getting that absolutely right is critical, and in order to make that happen, you need to mobilise people. People have to believe in their hearts that they can do it.

Transparency

To deliver a safe and sustainable NHS going forward, with quality at its heart, built on the values of principles of the NHS that we all support, transparency is very important: for our patients, the population, and our staff. It will be difficult in the short term, undoubtedly, when you start being open in the sort of way. All sorts of unintended consequences happen, but it is vitally important. Transparency should start at the heart of government, with the Spending Review. As we sit here, there is a document in the Treasury which sets out the Department’s view about what is going to happen in financial terms to the NHS going forward. I cannot imagine that there are many of you in this room who have actually seen it. That, historically, has been the case, but in order to build trust in the system, that needs to be opened up so that people understand.

To deliver a safe and sustainable NHS going forward, with quality at its heart, built on the values of principles of the NHS that we all support, transparency is very important: for our patients, the population, and our staff.

The Spending Review will set out the financial position of the NHS. In the Spending Reviews that I have been part of in the past, the NHS has always been in surplus, and that has always been taken into account by the Treasury when thinking about how much extra resource you need. I can only assume they will take the same note of the financial position that the NHS is in at the moment. What happens then is that the Government’s policies and the cost of these are set out. Somewhere in there, there will be ‘Seven-day services’, with a cost attached to it. I do not know how that costing has been arranged; I do not know how bottom-up it is, but that is a critical set of things that you will have to live with the consequences of. It will go through all of the Government objectives in terms of healthcare over the next few years, and will identify an amount of resource against each one.

It will then identify a set of priorities, and set out an amount of money, along with an assumption about what the increase in demand will cost over the next period. That will be debated with the Treasury, although it seldom is debated with the Treasury in any great way, and when you have added that up to a very large figure, you have to make a decision about how much, as a healthcare system, you can deliver through improved efficiency. That is a critical set of assumptions that need to be made. I do not know the basis on which those assumptions are being made at the moment, but they are critical. Once that assumption is made, it is incumbent on every bit of the system to deliver it. The centre then has to deliver that amount for the system as a whole.

We should not get into a place of trying to deliver things that we know we cannot deliver. Even if we cannot open all of this up before the event, we need to open that detail up afterwards, because then we have to determine how we are going to deal with it. Getting the Spending Review right, getting people signed up to understand what it means, and getting the right numbers in it, are vitally important.

‘One in, one out’

One of the lessons we learned from 2005/2006, and something which Labour politicians between 2006 and 2010/11 always signed up to, was the simple idea of ‘one in, one out’. We agreed that if you want the NHS to do something, you have to first of all provide the money to do it, and if the money is not there or it is theoretical, you need to be able to say, ‘What are we not going to do in order to deliver it?’ It was a very powerful mechanism, which people like Alan Johnson used with his colleagues, and it provides discipline in the system. We should not be in a position where we are identifying objectives without being absolutely clear as a service what it means to deliver them, both in terms of the money that you need and the people that enable that to happen. That creates a trusting environment within the NHS.

Money

Overview

The NHS needs more money. The population has grown by about 7% since 2006. None of that was taken into account when we worked through the Spending Reviews at that time. France spend £400 per head on their population more than we do. The Germans spend £800 more per head than we do. If, next year, we got a budget for the NHS which was the same size as the Swedish healthcare budget, we would have a £50 billion increase in healthcare expenditure. The position that we are in is completely nonsensical.

I saw the stuff that John Appleby did on this. To be fair, Simon and the team have worked hard to get £8 billion from the government in very difficult circumstances, but that will only take us to the position we were in 2005 by 2020. The idea that the government have suddenly developed largesse for the NHS is simply not true. It shrinks the equivalent size of the NHS over that period. That may be more to do with ideology than with the reality of healthcare, and it is important that we make the case consistently that the NHS needs significantly more resources over that period.

Sourcing resources

The way that we get that money is also important. We need to change the model of care, and it is hard to imagine how you can deliver that without having extra costs attached to making that change happen. The argument that is being developed at the moment in the Treasury, I would guess, is that we need to squeeze the NHS at the beginning of the parliament in order to give them more at the end. That simply will not hold up. It will not respond to the needs of our population, and will not deliver the changes that we need over that period. We also, as an NHS, need to do more ‘shaking the tree’. There is still money in bits of the NHS that needs to be shaken out. There are a variety of national bodies now that have money, and there are a variety of ways in which money is secreted around the system. We need to shake every tree to get all of that money out, and make sure it is all spent on delivering services to patients. It is all of our responsibilities to make that happen.

As part of this transition, we need some kind of overdraft facility, to enable some of the trusts to make some of the changes that need to happen. When we had surpluses, on two or three occasions, the Treasury would ring us in February and say, ‘Can you increase the surplus you are going to make in the last couple of months or so? We desperately need the money for something else.’ Based on the agreement, they would give it us back in April, and we did that. We created £300 million to £400 million worth of extra surpluses to enable the Treasury and other parts of the system to work. It is not unreasonable to have the equal and opposite opportunity, coming down the other way. That is what government and politicians need to do to help solve the problem, and I do believe that in time, all of those things will actually happen. People will complain, and there will be lectures about ‘You cannot spend more money than you have got’, but that will happen one way or another. It is much better if it happens up front when people can plan and organise for it, rather than for it to happen way down the road, when we are all in real trouble.

The role of the NHS

Again, this is not a provider problem; this is a system-wide problem. It was a central part of the Health and Social Care Act that autonomous providers and commissioners would think about the interests of their local communities and would, in some way, all work together and solve all of the problems of the NHS. It does not quite work like that; it might have, but it does not. When you have significant national intervention, it is very difficult for people locally to work out how to do things. Even in the best-run organisations, the tendency to look up to the people who have power over people’s careers in the NHS inevitably outweighs the forces bringing people together. We need to invent in the NHS some local forcing mechanisms to enable it to happen.

I am not going to say what that should be; I am certainly not saying we should bring back SHAs, but you need a forcing mechanism at a local level to make this happen. Without that forcing mechanism, we will not be able to make the kinds of difficult decisions that we need to make about the balance between commissioning, provisioning, and where people are. That, added to the fantastic work that is being done around the Vanguard and the interesting things that are coming out of all of that, means that we will increasingly move away from the idea of a purchaser/provider split.

Addressing financial challenges

1. The run rate

The scale of the financial issues that people are facing at the moment is too large for people to understand. In 2008, we talked about £15 to £20 billion. The reason we did it was that we wanted to attract politicians’ interest to what we were doing, but these numbers are just too big for people to cope with. As a system, we have to focus on the run rate. Step 1 is how you get us back into run rate balance; how you make sure that every month, you get in as much money as you need to spend in that month. It is almost impossible for people to tell me what it is in the system, or even in their organisations at the moment, but that is the first thing. If you add everything together, it just becomes too big for human beings to deal with. At the moment, it is quite difficult to define what success is going to look like, apart from a nought in the bottom-right-hand corner. Getting that run rate right is really important.

2. Restructuring debt

We also need to make sure that we can restructure the debt that people have got. Some of these accumulated deficits are not going to be solved, even in a three- to five-year period. Thinking about how we use debt in the system is going to be really important. It is important that organisations at the centre are able to do that, and that the Treasury and politicians give people the flexibility to enable them to make that happen. There also needs to be capital investment; I hear there is no capital, but nobody who is trying to make the kind of changes that we are trying to make can do that without capital investment, so why would we kid ourselves that that is possible? Creating an environment where debt and capital can be part of it is really important.

3. Reducing costs

Finally, the NHS’s attitude to cost reduction is problematic, and we can learn lots of lessons from other healthcare systems around the world. We have the evidence – you have seen the Karta stuff – but we seem to find it very difficult to enact it and make it happen in practice. We have to do it. It is what the NHS, at a minimum, needs to do to deliver the trust in the politicians that you need to enable them to give you more resource. I have been involved in some work in India around kidney dialysis, which is a massive issue in India. 80% of people who could benefit from kidney dialysis do not get it, and millions of people die because they do not get it. The vast majority of people in India pay for their own kidney dialysis, and on average, an Indian who gets kidney dialysis gets 1.8 doses a week; the clinical evidence shows that three is the minimum that you need. For those who are getting it, it is probably doing more harm than good.

Organisations there have a real incentive to get the cost of kidney dialysis down to an amount that people can actually afford, and that is a real driver for change. There are groups of people working day in and day out to work out new and different ways of getting that service to those patients in a way that they can afford. The incentives are not the same for us; it is easier to say that it is all too difficult, but creating an environment where people constantly look at the cost of things and think about the way in which they can deliver it is lower cost is important. In India, they are adopting the NICE guidelines to make sure that quality is right, but focusing really hard on cost reduction is a really important part of it.

Leadership

The generational shift

The key issue, for me, is about the leadership of the NHS over this period; leadership throughout the system as a whole. Gill talked about me working at Doncaster; I was appointed as a general manager in 1998, and I was the very first chief executive of an NHS Trust appointed anywhere in the country. It took me about three years to get my head around the job and to understand what it meant. Now, there is a generational shift in the leadership of the NHS. A whole generation of old people are now leaving the stage, and a new, more diverse, more energetic group of people are coming forward. I felt I was part of that last generational shift.

Supporting leaders

Brian Edwards, who was the regional director at the time I was appointed in Doncaster, said, ‘I want you to be the best you can possibly be as a chief executive. I want you to succeed, but I need 120% performance from you. I need you to perform way beyond how you ever imagined you could, and when you do that, you will have to take on vested interests. You will sometimes have to do things that are unpopular. You will sometimes make mistakes, but if you get it wrong, we will look after you. We will give you advice and nurture you; you will always know that there is somebody in the system who is thinking about you and is trying to make sure that, as you stick your neck out and try and do great things for the service, you succeed.’

Those of us who are responsible for the stewardship of the NHS need to make sure that we give the support and nurturing that emerging leaders need.

That is what I want to leave you with. This great generation of people, who are going to do fantastic things for our service – who are going to change the nature of how we deliver services, and make the NHS sustainable in a much more hostile environment than I ever encountered – need support and nurturing. We need to make sure that those of you who have been around for a while make yourselves available to these people, to enable and support them on the journey that they are on. We need the national bodies to make sure that they nurture and support these people. We need the politicians to make sure that the first response is not, ‘Get them out the door’. If we are going to expect fantastic things from them, we are going to have to support them and help them in a way we have not done for quite a long time.

The leadership makes me more optimistic about the future of the NHS than almost anything else. I met a whole group of people in the West Midlands last week; they are fantastic people, predominantly clinicians, predominantly female, and a large proportion from black and minority ethnic communities. They are all determined and keen to make a difference to the NHS. Those of us who are responsible for the stewardship of the NHS need to make sure that we give the support and nurturing that they need. Thank you.