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Achievements So Far

In my speech today, I would like to reflect upon how far the NHS has come, at the halfway point in the 10-year NHS Plan.  What have we achieved, and what do we still need to do.

We have certainly spent a lot of money.  The NHS budget has doubled from £37bn per annum in 1997 to £76bn now and is on its way to over £90bn.  This money, allied to staff dedication and service reform has delivered a better NHS.

The modernisation agenda that you are driving is recognised by academics and other health systems as world leading and examples of this abound in all sectors:

Together we have made hugely significant reforms to create the platform for a Patient-Led NHS.  But is this enough?

What Still Needs To Be Done?

No, it is not

Our main focus since 1997 has been on the acute sector, incentivising it to cut waiting times and improve its service.  It has responded magnificently to this and I am sure that it will continue to do so.

But, there is a clear risk that a strong, vibrant, incentivised hospital sector will suck all the new investment into hospital care unless it is balanced by an equally strong and vibrant commissioning function that can represent patients, focus on prevention and public health and management of hospital providers to ensure good value for money.

Commissioning a Patient-Led NHS

Commissioning a Patient-Led NHS moves the change agenda onto the critical area of commissioning.  It focuses specifically on the importance of expert, imaginative commissioning in achieving a patient-led NHS.

Why is this important for patients?

Firstly, commissioning is the means by which PCTs ensure that the local NHS budget is spent as effectively as possible. 

Weaker PCTs, who allow hospitals to set terms, cannot create new models of service and when faced by financial problems are forced to squeeze the services that they run themselves, particularly community-based services.

Secondly, strong commissioning is needed locally to ensure that the money actually gets spent on the areas of greatest need rather than being sucked into the areas where demand is more vocal.  In too many areas we are still spending more money per head on affluent, healthy communities than we are on poor communities with high health needs.

Thirdly, stronger PCTs will be able to drive the implementation of practice-based commissioning and remove the obstacles so that GPs and other skilled community clinicians can manage the care pathway for individual patients, redesign services to shift care into the community and ensure that patients' wishes can influence how hospitals organise services.

This drive for improved commissioning means that some organisational change is necessary.  I know you will be thinking about these changes today, and that they feel unsettling for many of you - and that they are causing real anxiety amongst the staff directly affected. 

I'm not someone who believes in structural reorganisation for the sake of it.  Indeed, I came into office saying that I would not have another reorganisation.

However, having looked at where we are in the implementation of the Plan and the challenges ahead, I have come to the conclusion that these changes are an unavoidable consequence of the reform programme, which is critical to making the NHS fit for the 21st century.

PCT Restructuring

It's important to say upfront that this is not a top-down reorganisation - we don't have a blueprint for the number or shape of PCTs.  We have asked SHAs to oversee the development of the plans locally, because the solutions will not be the same in every part of the country.  Many of you are already bringing together commissioning functions and changing the management of provision - you should build on what is already happening.

In some areas, bigger PCTs may be seen as key to strong commissioning and delivery of Choosing Health.  In such cases, I will want to know how they intend to maintain a strong local focus, developing their GP Practices and integrating with non-NHS services. 

In other areas, smaller PCTs may fit better with local circumstances.  In such cases, I will want to know how they intend to create the commissioning expertise to manage their providers and ensure the range of services required by their population. 

Both options are acceptable provided they stand up to all the assessment criteria that we published in Commissioning a Patient-Led NHS.

I could be more directive and tell you what to do, but you know your patches better than me and you should do it.

Some PCT Chairs and PEC Chairs have complained to me that they are not involved in their local process.

I have also been asked about the national part of the process - who will judge that the criteria have been fully addressed and, critically, that the proposals will bring lasting benefits to patients.

Some people have said to me - you're pushing too fast - we need another couple of months.

Some people have said to me that there is no real job for PCTs in the new structure.

And as the configuration of PCTs change, SHAs will also change shape.  They will continue to provide an important set of functions but will be better equipped to do so as their larger size gives them a more strategic overview.

PCT provider functions

The enhanced focus that we are placing on getting commissioning right and our desire to provide patients with choice in primary and community services naturally gives rise to changes in the PCT's role in providing services.  I know that many of you have questions about this issue.

Our clear and stated aim is to develop more and more diverse community services providing earlier intervention and diagnosis, better support for people with long term conditions, more day-case procedures and more effective care for people discharged from hospital.

We want to encourage innovation and new models of provision.  We want to reduce the need for hospital admissions and attendances by having services delivered closer to people's homes, and we want to expand choice into community and primary care because the principle of a patient-led services applies across all NHS care.

I think that a patient who has been discharged from hospital after a stroke or a hip operation should have some choice over who provides their home rehabilitation and not have to take 'one size fits all.'

But, it is difficult for PCTs to facilitate innovation and choice in community services if they continue to be the monopoly suppliers of those services.

It is also difficult for a PCT Board with a large provider function to worry about give the necessary focus to its commissioning responsibilities.

That is why we are asking PCTs to reduce their provider functions.

I am driven not by dogma but by the desire to do the right thing for patients.  That is why we have said that we will use our consultation exercise - Your Health, Your Care, Your Say - to generate and gather the innovative ideas from across the country about what services people want and how they want them provided.

The new ideas will supplement the existing range of best practice from around the country.  The NHS is not starting from scratch - it has a range of provision models in different places, including PCTs who already offer no direct provision, and creative ideas.

It may be that, for example, some services will be managed by GPs or collections of GPs.  Some may become stand-alone NHS trusts or be managed by local authorities.

For some care-pathways, there may be real benefits from integration between community and secondary care services.  Some services will be provided by the voluntary sector - including staff or community-led social enterprises - and some by the private sector.  Some may be best provided by PCTs, but with a separate infrastructure which ensures choice and contestability.

This is not simply a question of shifting services in their entirety from one provider to another.  Nor is it about privatisation.  This policy is about liberating all parts of the system to provide the services that patients need.  I am looking to PCTs to ensure that we commission those services in a way which provides choice and certainty for patients.

We must also run this process in a way that protects staff and gives them the opportunity to extend their skills and fulfil their potential.  You, as employers, will of course undertake full staff consultation and give your staff a real opportunity to use their experience and creativity in shaping better services. Together, we will also ensure that we protect the position of staff who transfer to other organisations.

This is a fantastic opportunity to take a step forward in delivering services close to patients.  It needs real innovation and real leadership.  It also doesn't need to be done until the end of 2008.  Take your time and get it right.

Conclusion

So to conclude, if it feels like there's a lot happening at once, that's because there is.  I really believe that this isn't a distraction from what needs to be done, it is what needs to be done.

The changes are part of something much bigger, much more exciting.  A move to put the patient at the heart of the system and devolve power to clinicians.

In the coming months I will be working closely with leaders from all parts of the NHS and partner organisations in our new National Leadership Network.  The Network's role is to identify and remove barriers to progress, to ensure rapid and frank communication to and from the centre, to champion successful improvements in care, to promote and model shared values to offer advice on emerging policy.

A number of Chairs and non-executives have said to me over the past few months that you are not represented within the Network.  I can announce today that we will be changing that to ensure that Chairs and non-executives will have a voice within the National Leadership Network.  I will meet with this group of Chairs regularly to ensure that I hear your voice directly.

I want to leave you with two challenges as leaders in your organisations and communities:

Firstly to seize the opportunities offered by the focus on commissioning to really build a patient-led NHS in your areas;

Secondly to help your boards engage your clinicians and other front-line staff.  These are the people who will make change succeed and are, in most cases, best placed to support patients through the system.  Together we must explain the changes in ways that show how services for patients will be improved.

I thank you for your efforts and the huge contribution every one of you has made to the running and the reform of our best loved public institution.

I look forward to working with you to create an NHS that holds public confidence for another 60 years.