Operational Productivity in NHS Providers

Matthew Offord Excerpts

Wednesday 1st July 2015 Westminster Hall

[Mark Pritchard (in the Chair)]

Given the temperature today, colleagues may remove their jackets if they so choose.

[Dr Matthew Offord (Hendon) (Con)]

I beg to move,

That this House has considered operational productivity in NHS providers.

It is a pleasure to serve under your chairmanship, Mr Pritchard, and I welcome the Minister to his role. I believe this may be his first Westminster Hall debate, and I am greatly pleased that I am the Member who secured the debate.

The national health service featured heavily in the recent general election campaign. I recall speaking at several hustings and telling my constituents that I recognised that this Parliament would witness an increasing demand for NHS services. On occasion I was challenged on how the additional £8 billion highlighted by the Stevens review would be found. My response, then and now, is that the greatest efficiencies can be identified within current services without undermining patient care. Such a view is shared by Simon Stevens, but most interestingly it is a view shared by others, including my constituents Philip Braham and David Green, who established a medical recruitment company called Remedium Partners. I am pleased that both gentlemen are here today in the Public Gallery.

Having met Mr Braham and Mr Green before the election, I was eager to re-establish contact with them earlier this month to discuss their ideas about NHS efficiency in employment. It is possible that more cynical Members will say that this is more evidence of the Conservative party seeking to introduce greater private sector involvement in the NHS for others to make a profit, but that would be an incorrect assertion to make. In fact, I found our discussion focusing on opportunities to save the NHS more money and prevent its resources being plundered by unscrupulous individuals.

The publication of Lord Carter of Coles’s interim report, “Review of Operational Productivity in NHS providers”—hence the title of this debate—two days before our meeting could not have been more fortuitous. The report outlined four areas where Lord Carter believes greater efficiencies could be achieved to allow additional moneys to be spent on front-line care. One objective in seeking today’s debate was to air the issues and to place them on the public record. Lord Carter’s efficiencies within the NHS include saving £1 billion from improved hospital pharmacy and medicines optimisation, £1 billion from the NHS estate, £1 billion from improvements to procurement management, and £2 billion from improvements in workflow and encompassing workforce costs.

Workforce costs is the area that I intend to focus on in this debate, as I have discussed it directly with my constituents and because just a 1% increase in workforce productivity could achieve as much as £400 million of savings. This is a significant and important area of the work of the NHS. Lord Carter believes that the £2 billion figure would be achieved without making anyone redundant and without seeking to increase the responsibilities of staff, nor would it mean decreased levels of remuneration for future employees. What it does mean is a greater command of management control on non-productive time, which are the periods when staff emphasis is not on direct patient care—days and shifts of annual leave, sickness and training. It also includes better management of rosters, improved guidance on appropriate staffing levels and skill ranges for certain types of wards.

The NHS is one of the largest employers in this country, employing more than 1.3 million staff in more than 300 different types of roles. In the last year that figures were available, the cost to the NHS budget was £45.3 billion, the largest proportion of the £118 billion budget. The cost of nurses alone totals £19 billion, and with the increased number required for safer staffing and a third increase in the number of nurses leaving the profession in the past two years, the reliance on agency nurses will see this figure rising.

[Mr Jim Cunningham (Coventry South) (Lab)]

When the hon. Gentleman talks about increasing the productivity of staff, can he itemise which staff he is referring to and say how much would actually be saved?

[Dr Offord]

We are talking about all the different staff. There are 300 different employment roles in the NHS, so we are talking about everyone across the NHS, but I hope later in my speech to come to the specifics of clinicians and the use of agency staff for that sort of role.

[John Stevenson (Carlisle) (Con)]

I congratulate my hon. Friend on securing this important debate. In my constituency in north Cumbria there is a hospital with a large number of agency staff, which has been a problem for some considerable time. I understand the need to employ agency staff, but does he agree that it would be far better to have staff employed directly by the hospital, as that would improve patient care and staff morale and also—to echo his point—improve the costs and productivity of that hospital?

[Dr Offord]

I certainly do agree with that point, and I hope to elaborate further on that. I also wish to touch on the use of bank nurses, or bank employees, who periodically work for parts of the NHS. I agree that for patient care it would be best to have full-time permanent staff who not only know the patients and the hospitals, but know the other employees they work with on a day-to-day basis.

Most worryingly, Lord Carter identified the fact that, in some of the 22 hospitals he surveyed, bank nurses are remunerated at a level that does not discourage them from remaining with, or moving to, agencies. I looked at the website of one of the trusts that took part in the review by Lord Carter and was surprised to see the range and number of bank employees—including, ironically, the position of the e-roster co-ordinator. I will not name that particular trust, as this debate is not a “name and shame” exercise, but I raise it to illustrate the point, because if such a role is vacant, what hope can there be to ensure that other clinical positions are staffed suitably?

The e-roster co-ordinator is in the best position to monitor employment and identify irregularities in work patterns to prevent fraudulent practices. The majority of people who work for the NHS are honest, but there are a minority who seek to defraud its resources. I want to highlight the types of fraud that occur. Such fraud involves staff and professionals who claim money for services not provided or more money than they are entitled to, or who divert funds to themselves. It can also involve external organisations that provide false or misleading information, including invoices, to claim money they are not entitled to. Some of these frauds can be fairly low value, but they can often cost the NHS hundreds of thousands of pounds.

One example is Michael Botham, a hospital worker in Stoke-on-Trent who claimed nearly £20,000 for shifts he did not work. He applied for work via a recruitment agency, AMG Nursing and Care Services, in October 2007. He was then assigned as an unqualified healthcare worker to Bucknall hospital in Stoke-on-Trent, where he worked in the complex needs ward. Most worryingly, it took a ward manager to identify an overspend and to report their suspicions about Botham to the trust’s local counter-fraud specialist team. When the team analysed his timesheets, they revealed that he had submitted false claims for work from 1 January to 26 July 2009, complete with forged authorisation. In fact, he had worked only one shift during that period.

Botham also claimed payment for four shifts at Bradwell hospital, part of the same trust, in January 2009. Again, he had not worked those shifts and the authorising signatures were also false. In total, the trust overpaid £19,362 as a result of his false claims to the agency, which invoiced the trust in good faith on a weekly basis, but subsequently, to its credit, offered to pay back its fees of £3,956.50. This is a clear case of an individual deciding to defraud the NHS, but what is concerning is that the problem emerged only as a result of the scrutiny of another member of staff whose role was not to look for fraud.

[Karin Smyth (Bristol South) (Lab)]

I worked for a clinical commissioning group in Bristol. Does the hon. Gentleman accept that one reason why that would have happened is that all members of NHS staff have to undergo mandatory and statutory training to recognise and counter fraud?

[Dr Offord]

I do, but I am saying that this should have been picked up by an individual with a strategic, holistic approach to staffing and staffing budgets, rather than leaving it to one individual on the ward who realised there was a problem with the budgets. There are processes in place to ensure that fraud does not happen, and I would like all hospital trusts to introduce such processes. In his report, Lord Carter highlights a case where one provider identified 20 cases of counter-fraud when they reviewed and strengthened their sickness and annual reporting leave. That prompts the question of why such abuses continue to be left unchecked.

There is another case of fraud that I want to highlight, which has been judged more harshly, although it can be argued that it is certainly not as deceptive because the individual actually undertook the work. Simon Olufemi Ajani was sentenced to 12 months’ imprisonment following a fraud investigation by NHS Protect after he had produced a false passport and certificate of entitlement to the right of abode in the UK. That enabled him to obtain work with patients at East London NHS Foundation Trust, South London and Maudsley NHS Foundation Trust, and other London trusts through NHS Professionals, the agency that supplies temporary staff to the NHS. His fraud was first uncovered through a data-matching exercise that highlighted inconsistencies between UK Border Agency records and NHS payroll records.

The difference between those two cases is that Ajani worked the hours that he was paid for, even though he was not entitled to be employed in this country, while Botham was just a crook stealing money directly from the NHS and patient care. These examples lead me to ask the Minister about the employment of those from outside the EU, an issue I have discussed recently with my constituents, as I mentioned. There is some criticism about the use of foreign doctors in the NHS, and some people consider that these jobs have been taken out of the reach of British people. However, we all know that the NHS does not have the numbers of doctors and nurses that it needs and there is not the capacity within the population of the United Kingdom to provide them. That is why some agency staff are required.

For some medical practitioners, however, remaining a locum is an alternative to having a permanent position. Some doctors are able to earn between £1,400 and £1,500 for a 12-hour shift, while the on-costs payable to agencies mean that hundreds of thousands of pounds a year are being charged to health trusts around the country for employment of temporary staff. One alternative to the costly system of locums could be the employment of a permanent doctor from overseas who could earn a salary of between £75,000 and £120,000. I need not ask the Minister whether he feels that this is better value for money than having a locum.

The NHS is an employer of those considered to have skills that are needed in this country, and a tier 2 visa allows “skilled workers” from outside the European economic area with a job offer to enter the UK. However, it has been established that the immigration health surcharge is levied against non-EU citizens. This requires every applicant and their dependents to pay not only their visa fees but a further £200 each year for up to three years. It strikes me as perverse that the very people needed to work in the NHS are being penalised by paying an additional amount that should perhaps be part of their terms and conditions of employment. Can the Minister explain in his summing up how the figure of £200 was reached and whether he feels that levying this tithe against NHS employees is counterproductive?

Lord Carter’s report goes on to identify opportunities in managing annual leave—what he terms the largest part of non-productive time. There are many ways in which NHS employers can ensure they manage staff leave. I am not going to stand here and say that the Minister should micro-manage the NHS in England, but even simple practices do not appear to be implemented in some NHS trusts. We all agree that, while the needs of patients must be considered when managing annual leave, people do need time off. Introducing a notice period of a month for leave requests of, say, more than three or four days would allow NHS managers the time to plan ahead, but that is not happening uniformly, thereby ensuring that agency staff are needed as an emergency measure.

Can the Minister therefore confirm that measures introduced by the Secretary of State to reduce agency locum spend will include a requirement for trusts to ensure that their employment practices and policies include such conditions as notice periods to book leave, that trusts consider employing e-roster co-ordinators and that trusts examine their employment policies so that they can compare themselves with their peers and undertake a skill mix review, the combination of which would reduce the need for spending on agency staff?

A fear raised with me by my constituents concerns the revalidation of full-time locum doctors. It is well known that locum doctors can experience a variety of challenges with revalidation, largely due to the peripatetic nature of their work, but annual appraisals are the backbone of revalidation and fundamental to demonstrating the fitness of medical professionals to practise. Revalidation should be carried out by the framework suppliers—the agencies that supply staff—but I have heard anecdotal reports that agencies do not revalidate, and it has been alleged that some health professionals are even practising outside their qualifications and skill range. Can the Minister tell us how the Department will ensure that the revalidation of all full-time locum medical professionals is carried out by the framework suppliers?

The final issue about the use of agency staff I want to raise is the use of master vendor contracts between health trusts and employment agencies. The use of this practice creates an opportunity for collusion within the employment industry to seek maximum financial gain through the use of exclusive contracts. While such contracts may be an easy option for the employer—in this case, the health trust—the agency can ask premium prices for a service that could be provided more cheaply if it were opened up to competition. Such a practice effectively introduces a closed shop and prevents smaller employment agencies from being able to enter the health market. Can the Minister advise us how the Department can ensure that the use of master vendors does not result in tacit collusion in the employment industry for exclusive contracts that cost the NHS more than it might pay for the services elsewhere?

In conclusion, this debate is not a negative criticism of employment agencies or the work of people in the NHS; in fact, it is the opposite. I congratulate the people who work in the NHS and I want to ensure that more people are employed in the NHS. I am framing this debate as an opportunity to assist the Government in ensuring that the resources needed by the NHS and identified by the Stevens review are made available. It is an opportunity to start the process by recognising where we can work smarter to ensure a better NHS for all and identify opportunities to achieve economies that do not undermine patient care, but in fact achieve the opposite, by ensuring the correct number of appropriately qualified staff in the NHS, working confidently, diligently and at a pace that ensures the best care for patients.

--- Later in debate ---

[Dr Offord]

It was a pleasure to start the debate under the chairmanship of Mr Pritchard and, indeed, it is a pleasure to finish under you, Mr Gray.

[Mr James Gray (in the Chair)]

Covering all your bases.

[Dr Offord]

The debate was fantastic, but not entirely what I expected. The NHS is often used as a political football. I thank the Members present for their contributions and for highlighting some issues for me to consider, as well as for the Department and the Minister to consider.

The personal NHS experience of the hon. Member for Bristol South (Karin Smyth) is welcome not only in the debate, but in the House as a whole, and I look forward to her contribution to other debates. I thank her for today’s contribution, which was important.

I was surprised at first by the hon. Member for Angus (Mike Weir), because the Carter review looked at England, and I wondered where the hon. Gentleman’s contributions would go, but I am pleased that both he and the hon. Member for Strangford (Jim Shannon) spoke about the devolved institutions and the lessons that can be learned throughout the United Kingdom from Lord Carter’s report. That is a great way for us to work as a one nation country.

I am grateful for the comments of the shadow Minister, who made some points about NHS procurement. Some issues about extraction from European Union procurement programmes still need to be resolved—I understand that the shadow Health Secretary, the right hon. Member for Leigh (Andy Burnham), says that that can happen, but Simon Stevens does not believe that is correct—so there are some good things for the Minister to go away and think about. I will certainly take them away too, and I am grateful for that.

In the short time I have available, I want to say a little about the response to the Carter review. There has been a positive response from the Royal College of Nursing, which not only acknowledged that nursing numbers have not been meeting demand, but stated:

“It is clear that there is waste in the NHS, which is holding it back from directing its resources to frontline patient care. Lord Carter’s review is a welcome illustration of how the NHS and individual hospitals could be much more effective in how they procure equipment, drugs, and above all staff.”

As the Minister said, we as parliamentarians therefore have a great opportunity to engage in the issue. As I said at the start of my speech, it came up at many hustings. It is often said that the Conservatives are not strong on the NHS, but I think we have a good story to tell. If we carry on in the same vein, and if the Minister carries on in the way he spoke today and in the recent debate in the main Chamber, that will please me and other colleagues.

I have been unfortunate enough in the past nine months to have need of the NHS, but I have been fortunate enough that it has been there. I am grateful. I have attended Moorfields, the BMI in east London and the Whittington with fairly serious issues. Indeed, my father-in-law had a hip operation on Friday, so I am grateful to the hospital in Swindon as well for making that happen. The care that he and I received has been second to none and I am grateful. I hope that it may continue to be such and that today’s debate will continue our efforts to make the NHS the best national health system in the world.

Question put and agreed to.

Resolved,

That this House has considered operational productivity in NHS providers.