Agenda item

Attached: Whittington Hospital Foundation Trust Consultation Document.

The Panel will hear evidence from Officers:

• Susan Sorensen, Director of Strategy & Performance and Deputy Chief Executive
• Siobhan Harrington, Director of Primary Care

Susan Sorensen, Director of Strategy & Performance and Deputy Chief Executive and Siobhan Harrington Director of Primary Care presented an overview of the Whittington’s Hospital application for Foundation Trust status and responded to Panel questions.  A summary of the discussions that subsequently took place is provided below:

Background to application

·        The Whittington was told it could apply for FT status in the 2006/7 business planning cycle having met the required standards.  The Whittington Hospital will therefore be part of the 7^th wave of applications for FT status.  The decision to seek FT status was unanimous among current Whittington Board.

·        The acute sector must continually ‘horizon scan’ to ensure that business plans recognise and respond to anticipated events.  In this context, the Whittington had been required to make some tentative assumptions about the outcome of the London review of NHS services.

·        It was emphasised that this was a genuine application which would be thoroughly assessed by the scrutinising body (Monitor).  It was noted that not all NHS trusts had been successful in their applications for FT status, indeed, some had been deferred for further developmental work before they can resubmit their application.

Local Health Economy

·        The Whittington Hospital indicated that it was aware of the issues that may arise with many local health agencies in transformation at the same time.  It was reported that there is ongoing dialogue with both Haringey PCT and NHS London to ensure that local and regional developments are planned coherently and that services do not fragment.

·        The Whittington indicated that it was committed to maintaining a strong network of local health care provision.  Even though the Whittington will be independent of NHS control once acquiring FT status, it will retain a strong interest in maintaining clinical networks which naturally extend over many acute sector sites (such as the North Middlesex Hospital).  Similarly, under the London NHS review (Darzi), emphasis will be on developing effective care pathways which will maintain links between acute sector sites.

·        It was pointed out that the Whittington was particularly keen to maintain links with the primary care sector, hence the development of the innovative post of Director of Primary Care at the hospital.  This role will help the Whittington to maintain an awareness of community developments and provide a focus for ongoing consultation processes between the two sectors.

·        The Whittington sought to reassure the Panel about private sector provision from the site under FT status.  It was indicated that there would be no benefit from incorporating private sector health care provision (i.e. treatment centre) within the hospital business model, as the FT would have a much tighter business case for all services provided in the future. 

London NHS Reconfiguration

·        Concerns were raised about the future of the Whittington Hospital in the context of the review of NHS services in London.  There was a general indication that Primary Care Trusts (as commissioners of services) would lead the way in shaping the nature and level of acute sector provision across London (subject to Darzi model and principles).   Thus, it would be local PCTs which would ultimately shape the nature of services provided through the Whittington and other acute sector hospitals.

·        The impact of the Whittington acquiring FT status upon the wider health economy was a concern to Panel Members.  New financial freedoms together with greater autonomy to determine governance arrangements may confer a competitive advantage to the Whittington Hospital FT over other acute trusts in the area (i.e. The North Middlesex Hospital).  There was some anxiety as to what implications this may have for 1) the availability of services across both sites 2) patients ability to choose services. 

Governance & Accountability

·        Although FT’s are independent of NHS control, public accountability will be maintained through reporting and monitoring processes established with Monitor: a government agency that specifically regulates FT’s. Monitor has already established a quarterly inspection and assessment processes with the Whittington in the lead up to their formal application and these will continue if FT status is attained.

·        The Board of Directors will have responsibility for day to day running of the Hospital.  The board will consist of 12 Directors (6 Executive and 6 Non Executive) and the Chair. 29 representatives will make up the Members Council which will include, patient, public and staff representatives and other local stakeholder organisations (i.e. PCTs, LA’s).  The Members Council would have powers to appoint the Chairman and Non Executive Directors to the Board.

·        The value of public accountability through the role of the Members Council was questioned by the Panel.  The Panel were concerned that the ability of the Members Council to guide and influence decisions taken by the Board of Directors may be limited, given that it will not have an indicative budget and will have limited opportunities to meet with the Board. It was also noted that that the only direct link between the Members Council and the Board of Directors was the Chairman (who presides over both).

·        Further clarification was sought as to the accountability of the Chairman’s role within new governance arrangements at the Whittington, particularly in their duty as Chair of both the Board of Directors and the Members Council.  Whilst it was noted that this role may provide a link between the two management bodies of the FT, there was a concern that this placed considerable singular authority within the role of the Chairman. 

·        Panel Members indicated that further work needed to be undertaken to explain the nature of the relationship between the Board of Directors and the Membership Council.  If FT status was to represent greater patient and public accountability, further involvement of the Membership Council in decision making processes was needed.

·        Further details as to how Executive Directors will be identified, appointed and remunerated within the new Foundation Trust was also sought.

Finance

·        New financial freedoms will be one of the key benefits of Whittington gaining FT status.  With FT status, the Whittington will be able to access new sources of financial support and do so more efficiently than under current NHS financial processes.  This may enable the Whittington to respond to patients needs more quickly as there is ‘less bureaucracy’ in planning and developing new services.

·        Each Foundation Trust is subject to rigorous financial planning and monitoring standards set by Monitor.  Each FT is allocated a financial borrowing limit based on the assessed accounts.  Whilst borrowing can be from private or public sources, the FT cannot breach these total borrowing limits.

·        The Panel discussed what the implications would be of FT that failed (either financially or through poor governance).  Recent evidence would seem to suggest that in such circumstances, a FT would be taken over or forced to merge with a more successful FT.

·        With the maintenance of the Payment By Results (PBR) system, where acute sector providers are remunerated at the same rate for hospital services, there is no incentive for cost cutting between competing acute sector hospitals.

·        If a financial surplus is recorded by a FT at the end of the accounting year this money is not subject to any external controls. A financial surplus cannot therefore be reclaimed by wider NHS bodies.  Financial surpluses can be retained by the FT for future investment or redirected to service areas at the discretion of the FT Board. 

·        It was recorded that the intention of the Whittington was to plan for an operating surplus at the end of the first financial year as a FT.  This would be in line with surpluses recorded at other FT’s. 

Staff

·        Then Whittington will have greater flexibility and autonomy to vary staff employment and conditions within FT status.  The Whittington indicated that it had no plans to vary conditions from national pay agreements. The Whittington have undertaken consultations with Staff Side (Trade Union) representatives in the furtherance of their FT application..

Standards & Monitoring

·        Even though Foundation Trusts are independent of NHS control, the Hospital will still be subject to service standard inspections as carried out by the Healthcare Commission.  The Whittington will also still be subject to core standards as set out for other acute trusts. Current arrangements for recording and publishing of standards data will be maintained. 

Consultation

·        The Whittington has undertaken a wide ranging programme of consultation events and meetings with staff, patients, public and other services in the locality.  The local Public and Patient Involvement Forum have also been kept informed of developments as the hospital’s application for FT status has progressed. 

It was noted that the Whittington Hospital has an Open Day on the 26^th September from 14.00–18.00. 

A copy of the presentation that was made to the Panel is attached for information.