Home Page Search Final Report Interim Report Evidence - Transcripts - Witness Statements - Submissions - CCNR Report and associated documents - Statistical Reports and associated documents - Background Papers - Expert Papers Inquiry Seminars About the Inquiry Help		Daily transcripts     Hearing summary 19th October 1999   The Inquiry oral hearings will focus this week on the concerns raised about paediatric cardiac surgery at the Bristol Royal Infirmary (BRI) between 1984 and 1995 and actions taken during the period to resolve those concerns. The Inquiry will also hear evidence which will illustrate the national scene and address the subject of post mortems and tissue retention.   Today the Inquiry heard evidence from Sir Alan Langlands, Chief Executive, National Health Service Management Executive (NHSME) 1994 to 1996 and then National Health Service Executive (NHSE) to date. He described the relationship between the NHS, the NHSE and the NHS Regional Outposts during the 1980s and 1990s and discussed in detail the issue of accountability and responsibility. He commented on the role of NHS Trust Boards after 1991, the guidance issued to them by, and their accountability to, the Secretary of State. Sir Alan commented on the establishment of the Supra Regional Services Advisory Group and its role in commissioning specialist healthcare services. He went on to discuss guidelines circulated in 1990 regarding disciplinary procedures and their application following the introduction of NHS Trusts from 1991. He commented on requirements to include quality in service contracts between purchasers and providers and added that the focus of quality standards in the early 1990s was on national priorities such as ‘Health of the Nation’ targets. He concluded by confirming that confusion existed between professional bodies such as the Royal College of Surgeons, the DOH, regions, districts and trusts regarding responsibilities for monitoring the quality of supra regional services and acting upon concerns.   Hearings concluded today with evidence from HM Coroner for Avon, Paul Forrest. He clarified the position regarding consent for the retention of tissue following a coroner’s post mortem and confirmed that tissue should not de retained for teaching or research purposes without the consent of next of kin. He concluded by saying that the current coroner’s system was unable to guarantee consistency and that reform was required.

FULL TRANSCRIPT

   1                     Day 65, 19th October 1999
   2   (9.30 am)
   3   THE CHAIRMAN: Good morning, everyone. Good morning,
   4     Mr Langstaff.
   5   MR LANGSTAFF: Good morning, sir. Sir, today, as
   6     I indicated yesterday, we have both Sir Alan Langlands,
   7     who will be questioned by Miss Grey, and then Paul
   8     Forrest, Her Majesty's Coroner for Avon, whom I will
   9     question.
  10        Before this morning begins, may I take the
  11     opportunity of reminding you of the application made
  12     last week by Mr Lissack on behalf of the Bristol Heart
  13     Children's Action Group, and wonder if you have had the
  14     opportunity to consider what response the Inquiry should
  15     make to it?
  16   THE CHAIRMAN: Mr Langstaff, thank you, yes.
  17             CHAIRMAN'S STATEMENT
  18         RE MR LISSACK'S APPLICATION OF 12.10.99
  19              TO RECALL WITNESSES
  20   THE CHAIRMAN: Last Tuesday, which was October 12th, as you
  21     say, Mr Lissack made an application on behalf of his
  22     clients, the Bristol Heart Children's Action Group, for
  23     the recall of several employees of the UBHT in
  24     connection with matters arising subsequent to the
  25     evidence of Professor Berry, given here on 23rd

   1     September.
   2        In response, we heard from Mr Chambers on behalf
   3     of the Trust, and we have had the opportunity of reading
   4     the relevant correspondence, including the letter of
   5     18th October, from the Action Group's solicitors to the
   6     Trust's solicitors.
   7        We, the Panel, are of the opinion that some
   8     further enquiries should be made into this matter before
   9     a decision can be taken to grant or refuse the
  10     application. Consequently, I have asked the solicitor
  11     to the Inquiry to write, today, to the Trust requesting
  12     certain information from the Trust and the witnesses
  13     mentioned in Mr Lissack's application.
  14        Once a response is received, which we trust will
  15     be prompt, the Panel will consider it and rule on the
  16     application.
  17        Subsequently, the Inquiry will publish the
  18     exchange of correspondence and its decision.
  19        Mr Langstaff?
  20   MR LANGSTAFF: Thank you, sir.
  21   MISS GREY: Sir, as you are already aware, the first witness
  22     this morning is Sir Alan Langlands. Sir Alan, we have
  23     asked witnesses to stand whilst affirming and taking the
  24     oath, please.
  25            SIR ALAN LANGLANDS (SWORN):

   1             Examined by MISS GREY:
   2   Q. Sir Alan, you are the Chief Executive of the NHS
   3     Executive and you have held that post from 1st April
   4     1994; is that right?
   5   A. That is correct.
   6   Q. Could we have a look, please, at WIT 335/1? Is that the
   7     first page of a statement which you have provided to the
   8     Inquiry?
   9   A. It is.
  10   Q. If we turn, please, to page 22, is that your signature
  11     which appears at the bottom?
  12   A. It is.
  13   Q. Are the contents of that statement true to the best of
  14     your knowledge and belief?
  15   A. They are true.
  16   Q. Sir Alan, this is the first time you have spoken in
  17     public about these matters. Is there something which
  18     you would like to add or raise to your statement before
  19     we take that evidence as read and start this morning's
  20     questions?
  21   A. Thank you very much. It is the first time, and I expect
  22     today that we will spend time thinking about the
  23     structure and the functioning of the Department of
  24     Health and the National Health Service, but I would not
  25     like any of this to eclipse the human side of this

   1     Inquiry. I therefore wanted from the outset to extend
   2     my deepest sympathy to the children, the parents and the
   3     families who have suffered so much as a result of the
   4     events at Bristol Royal Infirmary.
   5   Q. If we can go back, then, to your statement, please,
   6     page 1, you set out in the first paragraph the wide
   7     variety of posts that you have held within the National
   8     Health Service over the last 25 years and you say that
   9     during 1993/94, you were appointed Deputy Chief
  10     Executive of the NHS Management Executive, the NHS ME.
  11     Can you tell us when you took up that post?
  12   A. I took up that post on 1st January 1993.
  13   Q. So that was the point at which you moved from the
  14     regional or district structure, you had been working in
  15     both, to the central Department of Health?
  16   A. I moved from the North West Thames Regional Health
  17     Authority.
  18   Q. If we could go on to page 2 of your statement, you say
  19     at paragraph 4 that the relationship between the NHS and
  20     the NHS Executives reflects some of the tensions
  21     inherent in this form of accountability. You described
  22     that in the preceding paragraph.
  23        On the one hand, you say, it is impossible and
  24     certainly undesirable for the NHS Executive to monitor
  25     the treatment of individual patients or patient groups.

   1        Can you help us a little further on what you mean
   2     by "certainly undesirable"?
   3   A. I mean by that that there are probably 400,000 people in
   4     the National Health Service providing clinical services
   5     on a day-to-day basis to 50 million people in the
   6     population of England, sometimes dealing with the most
   7     sensitive and difficult of personal issues. It would be
   8     impossible in terms of pure scale for the NHS Executive
   9     to be involved in that process and it would be, I think,
  10     a breach of the relationship between these clinicians
  11     and patients if they were to be so involved in these
  12     individual relationships between patients and clinical
  13     staff. That is what I mean.
  14   Q. So by "undesirable" you are referring to the
  15     doctor/patient relationship, its confidentiality, and
  16     would this be a further strand: the clinical freedom
  17     exercised by doctors within that relationship?
  18   A. Yes. "Clinical freedom" is not a phrase I have heard
  19     for a very long time in the National Health Service but
  20     I think there is a relationship of trust and of
  21     confidentiality between patient and doctor that should
  22     not be breached.
  23   Q. Help us a little further on why the phrase "clinical
  24     freedom" is disappearing from the vocabulary. First of
  25     all what is the chronology in the change in its use?

   1   A. I would think the chronology is to do with the review
   2     and sometimes the audit of medical practice from the
   3     late 1980s and through the 1990s. It is to do with the
   4     increasing tendency, both in the hospital services and
   5     general practice, for doctors to combine their
   6     management responsibilities with clinical
   7     responsibilities. It is to do with a tendency certainly
   8     very current in the last two or three years of setting
   9     clinical standards at a national level from the
  10     Department of Health in conjunction with professional
  11     associations and Royal Colleges, and the like, and
  12     holding people accountable for putting in place systems
  13     to ensure that these standards are met.
  14        So I think we are seeing a change and I think we
  15     have seen, through the work of the GMC and others,
  16     a change in the professional accountability of doctors
  17     over a period of, say, 10, 15 years.
  18   Q. So there is a shifting agenda and it is one that is
  19     fashioned of a number of strands, some of which you have
  20     just outlined to us. Do you think that the change in
  21     the vocabulary is something which is happening primarily
  22     at a policy-setting level involving as it were the
  23     leaders of professions, or do you think that that is
  24     something which is fully reflected on the ground, as it
  25     were, as well?

   1   A. I think it is increasingly reflected on the ground.
   2     I think professional bodies have shown, certainly over
   3     the last few years, a determination to reform. I think
   4     there had been some very significant policy changes in
   5     that direction, but all of these things, I believe, are
   6     driven by the public will and both the Department of
   7     Health and I think the regulatory bodies have
   8     a responsibility to protect the interests of the public
   9     in all that they do, and I think the public mood is
  10     towards greater accountability in all things, especially
  11     services provided in the public sector.
  12   Q. If we could look first at one strand of accountability,
  13     and that is the accountability of Trusts from 1991
  14     onwards through the Department of Health and the
  15     Secretary of State. If we could turn to page 5 of your
  16     witness statement and to the first paragraph there where
  17     you are coming to the end of the description of the
  18     changes made in Working for Patients in the 1989 White
  19     Paper, you come to a description of the establishment of
  20     NHS Trusts. You say at the end that the Secretary of
  21     State had no power to direct NHS Trusts in respect of
  22     the services they provided.
  23        Firstly, the members of the Trust Board and in
  24     particular the Chairman, were appointed, were they not,
  25     by the Secretary of State?

   1   A. That is correct, and the Secretary of State, while
   2     having no powers to direct Trusts in the way at that
   3     time that he would direct health authorities, and that
   4     would be the contrast I would make, did, however, have
   5     powers to remove the Trust Chairman or the Trust
   6     Chairperson and members of the Trust Board.
   7   Q. On specified grounds?
   8   A. On specified grounds.
   9   Q. Were those grounds linked to the financial performance
  10     of the Trust or were they more widely framed?
  11   A. I could not remember offhand what the legislation says,
  12     but certainly the interpretation on the rare occasions
  13     when this in my experience happened was drawn more
  14     widely than just financial failure.
  15   Q. More widely so as to encompass what factors?
  16   A. In my experience of this, to encompass factors like the
  17     breakdown of the relationship between the non-executive
  18     group, the managers and sometimes the clinical staff in
  19     the hospital. In other words, where relationships
  20     became dysfunctional to the point at which they impeded
  21     the proper work of the Board.
  22   Q. You mentioned that that happened on rare occasions?
  23   A. Yes.
  24   Q. Are you able to help us as to the number of occasions
  25     that the Secretary of State invoked that power from 1991

   1     onwards?
   2   A. I can remember it happening once in relation to
   3     a Regional Health Authority; I can remember it happening
   4     once in relation to an NHS Trust. I cannot remember if
   5     it is the 1970s, I suspect it is late 1970s rather than
   6     early 1980s, but there was of course a case where the
   7     then Secretary of State removed the whole board of
   8     a health authority -- the NHS Trusts did not exist at
   9     that time. So the power to intervene by removing Board
  10     members is something that has been used rarely over the
  11     years.
  12   Q. In relation to Trusts specifically, you can remember one
  13     instance of it?
  14   A. I can recall one, at the very edges of my memory maybe
  15     two, but I will say one to be safe.
  16   Q. Are you able to help about the guidance given to Trust
  17     Board members at the time they took up appointment?
  18   A. I cannot give you a reference, but there was a blue
  19     booklet which set out the roles and responsibilities of
  20     NHS Trusts and set out the basis upon which they would
  21     be monitored by the Department of Health and I can
  22     certainly reference that for you and send you a note on
  23     that subject.
  24   Q. That would be of assistance, because I think we have
  25     seen guidance that was issued in 1993 to Trust Board

   1     directors specifically.
   2   A. Yes.
   3   Q. But if you are able to provide us with the booklet that
   4     was issued in 1991, that would be helpful.
   5   A. I could not say that the date would be 1991, but it may
   6     be. The main source of guidance in 1991, as Trusts
   7     moved to the first wave, would be a series of working
   8     papers developed in the wake of the 1989 White Paper
   9     "Working for Patients".
  10   Q. How would you describe the time? Was it a time when
  11     there were clear guidelines on how Trusts were to
  12     develop, or was it rather a time of experimentation and
  13     innovation, if one is to put those at two ends of an
  14     opposite spectrum?
  15   A. It was in the middle of the spectrum. It was a time of
  16     change and turbulence. As I remember it, only 59 Trusts
  17     existed in the first wave, i.e. from 1991 to 1992
  18     onwards, so we were running at that time a sort of mixed
  19     economy where some hospitals were Trusts and some were
  20     directly managed by the health authorities. In other
  21     words, they were part of the pre-1991 arrangements
  22     before taking on Trust status.
  23        It was certainly a time where there was a very
  24     good Trust development team in the Department of Health
  25     at that time and there were quite precise notions about

   1     the roles and responsibilities of Trusts and how they
   2     would function in the arrangements set out in the 1990
   3     Act.
   4   Q. You have spoken about the use of the power to remove
   5     directors --
   6   A. Yes.
   7   Q. -- in case of dysfunctional Trusts, and told us that the
   8     understanding of the Secretary of State's powers went
   9     wider than purely financial mismanagement?
  10   A. Yes.
  11   Q. What would have been the Secretary of State's
  12     understanding of his or her power to direct or guide
  13     a delinquent Trust, as it were, which was in trouble not
  14     because of financial mismanagement but because of the
  15     quality of the services which it was providing?
  16   A. The Secretary of State, in legislation, had no power to
  17     direct such Trusts, but would seek to influence these
  18     Trusts and would use the team that supported him or her,
  19     the management team, to exert that influence. So whilst
  20     there was no direct power, there was very strong central
  21     influence where things were going wrong and, indeed, in
  22     some cases -- I cannot tie them to cases where there was
  23     a breakdown in the quality of care provided but in some
  24     cases there was quite a direct intervention. In other
  25     words, the various Secretaries of State through that

   1     period would err on the side of intervention.
   2   Q. What sort of factors did then trigger that intervention?
   3   A. I think factors -- first of all I should probably say
   4     I think these interventions were few and far between,
   5     not least because if we are talking about the sort of
   6     1991 to 1993 period, a relatively small number of
   7     hospitals or other units had been Trusts, and they had
   8     been carefully chosen because they had expertise and
   9     systems that had developed in advance of others that
  10     were not chosen.
  11        So by definition, they were more competent perhaps
  12     than some others, but where intervention did take place,
  13     it was often in relation to service change where there
  14     had been public concern, for example, about the closure
  15     of an outpatient clinic or the closure of wards. It
  16     might have come if we were suspecting persistent failure
  17     against some of the numerical targets that existed at
  18     that time, for example in relation to finance or waiting
  19     lists.
  20   Q. So what levers would the Secretary of State use by way
  21     of influence to intervene?
  22   A. The Secretary of State at that time -- again, if we are
  23     talking of that period, in the early 1990s, perhaps it
  24     is important at this point to confirm that at that time
  25     I was in a Regional Health Authority -- would often ask

   1     the Chair of a Regional Health Authority or indeed the
   2     Regional General Manager to intervene. There was,
   3     I must say, sometimes some confusion about that in that
   4     mixed messages emerged from the Department of Health.
   5     On the one hand there was a clear signal that we should,
   6     from a regional perspective, have a definite hands-off
   7     approach in relation to Trusts. On the other hand, we
   8     would be expected from a regional level to pick up the
   9     pieces if something was going wrong. So that was a time
  10     of rather confused accountabilities in that regard.
  11   Q. Because the Region, surely, had no more formal powers
  12     than the Department of Health possessed?
  13   A. That is correct.
  14   Q. If the lines of accountability were financial from Trust
  15     to Department of Health?
  16   A. Yes.
  17   Q. And from purchasers to Trust?
  18   A. Yes.
  19   Q. The region had no greater powers than the Department?
  20   A. There was no line management relationship, or any
  21     relationship of accountability between NHS Trusts and
  22     Regional Health Authorities.
  23   Q. So what was the source, then, of the authority for any
  24     regional intervention?
  25   A. The source of authority was one of influence. The

   1     regions did have some levers: for example, as it says
   2     later in my statement, they were responsible for
   3     resource allocation. They were responsible for deciding
   4     at that time on the priorities of certain aspects of
   5     capital investment. They very often had long-standing
   6     relationships with the people who were in the chair or
   7     who had been appointed as Chief Executives of these
   8     early Trusts, and one can look at this positively and
   9     say it was certainly the case at that time that whilst
  10     there was no line of responsibility, Trusts would very
  11     often look to regional health authorities for advice, or
  12     not so much to the body itself, but to individuals
  13     working in the regional health authority for advice and
  14     guidance on difficult issues.
  15   Q. So their authority might come not so much from the
  16     formal powers that they had at their disposal, but from
  17     a long-standing relationship and also their
  18     understanding of the regional position?
  19   A. The powers came from their expertise, in the sense that
  20     on occasions they were talking on behalf of the
  21     Secretary of State, and from their ability to influence
  22     certain crucial processes.
  23   THE CHAIRMAN: Miss Grey, may I intervene for a moment? You
  24     mentioned there that one of the levers was related to
  25     capital investment.

   1   A. Yes.
   2   Q. Could it be a possibility that the Region would, for
   3     example, hold back or not encourage a capital investment
   4     if it thought a particular Trust was not performing as
   5     it should be?
   6   A. I can think of no example where a Regional Health
   7     Authority deliberately held back capital monies to
   8     somehow penalise an errant Trust, but where a Regional
   9     Health Authority might have been trying to influence --
  10     if you remember, this is a period of transition -- the
  11     pattern of services in a particular part of the country,
  12     it may have been taking advice from health authorities,
  13     from general practitioners, from others on the regional
  14     medical networks that ran counter to the views of the
  15     Trust about capital investment or expenditure of that
  16     nature.
  17   MISS GREY: If we could go on, please, to the top of page 5,
  18     we were looking at that particular sentence, no power to
  19     direct NHS Trusts in respect of the services they
  20     provided. You mentioned that during the earlier period,
  21     1991 to 1993, this was perhaps a confused period in
  22     terms of accountability?
  23   A. Yes.
  24   Q. By the time you took over responsibility, say in early
  25     1994, had lines of accountability clarified in any way?

   1   A. Let me just double back. When I say it was a confused
   2     period, I think it would be confused to the people who
   3     were not working in the system, as it were. People who
   4     were running health authorities and who retained direct
   5     responsibilities for hospitals and community services,
   6     people who were working in family health services,
   7     authorities, people who were working in the new Trusts,
   8     would not be confused about their accountability, but my
   9     simple point was that the system was in transition.
  10        When I took up post on 1st April 1994, we were
  11     going through another cycle of change and I had been
  12     party to that. I mention in my evidence that a Working
  13     Group under the title of the Functions and Manpower
  14     Review led by Kate Jenkins had been thinking about the
  15     structure and functioning of the Health Service during
  16     1993, and I was in fact part of that group. In other
  17     words, the prelude to my taking up post as Chief
  18     Executive was to be involved in that -- I think at the
  19     time really quite significant study of the top
  20     management arrangements in the NHS, which ultimately led
  21     to the 1996 Act, the abolition of regional health
  22     authorities, the integration of district health
  23     authorities and family health services authorities.
  24        So that work had been done in 1993; it was under
  25     discussion during 1994 and led to legislation in 1996,

   1     so yet again, we were in a period of transition.
   2        The other point I would make about the period from
   3     1st April 1994 -- I do not have the number to hand but
   4     of course a great many more groupings of health
   5     services, hospitals and community services, had become
   6     Trusts at that point, so it was much more the normal way
   7     of operating, so that the focus from that period onwards
   8     was in sorting out the top management of the Health
   9     Service, the NHS Executive and the Regional Health
  10     Authorities, which later became the regional offices, on
  11     integrating the district health authorities and the
  12     family health services authorities. That was the focus
  13     of management attention at that time.
  14   Q. I am not quite sure whether you have answered the
  15     question, in that I am seeking to press you on whether
  16     lines of accountability would have been clearly
  17     understood, say at the Trust level. Do you think they
  18     would have been at that stage?
  19   A. I think they were very clearly understood at the Trust
  20     level. People understood the statutory basis of
  21     a Trust. They understood the management relationship
  22     with the Department of Health. They understood the
  23     parameters on which Trusts would be monitored. So my
  24     direct answer to your question is, yes, people working
  25     in the system would be very clear about the lines of

   1     accountability. My explanation, I think, was intended
   2     to show you that yet another wave of change was
   3     unfolding and as it unfolded a number of new initiatives
   4     were taken which influenced the way in which Trusts
   5     operated.
   6   Q. If we can just look briefly at one of the documents that
   7     was produced during that period of examination and
   8     change, this is "Managing the New NHS", which I think
   9     would have been produced in October 1993. If we could
  10     look, please, at the first page, HOME 2/174, that,
  11     I think, must be something you are well familiar with?
  12   A. Yes. Less so than I was at that time.
  13   Q. If we could go to page 202, there is a statement there
  14     or a summary of the requirements, the accountability
  15     arrangements for NHS Trusts?
  16   A. Yes.
  17   Q. That is couched in financial terms, in the primarily
  18     financial accountability arrangements which have been
  19     described there?
  20   A. Yes.
  21   Q. Is that the limit of the information the Trusts were
  22     required to report back to the Department of Health by
  23     the Regions?
  24   A. That was the technical position, the position in law, if
  25     you like. Just in passing, the document that is

   1     mentioned on the first line there, "NHS Trusts -
   2     a Working Guide" is the blue booklet I referred to
   3     earlier, which would have set out these terms, the
   4     financial parameters and the rest of the sentence, in
   5     some more detail.
   6   Q. If that is the letter of the law, in practice was it
   7     given a wider interpretation and understanding, or not?
   8   A. In practice it was given a wider interpretation because
   9     the Health Service, as ever, was having to cope with
  10     change; it was having to cope with structural change,
  11     for example, and just to give you one very significant
  12     example from that period, there was ongoing a very
  13     detailed study of the pattern of health services in
  14     London and that was a study that was driven by the
  15     Department of Health, by the NHS Executive at that time,
  16     and by the Secretary of State. It required the Trusts
  17     who were part of that study right across London to be
  18     providing information to be expected to have been
  19     studied in much more detail than just these few
  20     financial parameters set out in paragraph 50 on this
  21     page.
  22   Q. What would you understand to be the primary
  23     responsibility of members of a Trust Board? Was it to
  24     meet the criteria set out in this paragraph, or did
  25     their duties go wider?

   1   A. It was to meet the criteria set out in this paragraph,
   2     but I think in reality they had wider responsibilities.
   3     They were expected to behave as part of a single
   4     National Health Service. If I can give you some
   5     examples, they were expected to pursue national
   6     priorities and planning guidance produced by the
   7     Department of Health; they were expected to work to
   8     comply with patient charter standards and during the
   9     period, I guess, 1992 to 1995, they were expected to
  10     operate to a series of codes. This was a time when the
  11     question of corporate governance was a controversial
  12     issue in the country as a whole and based on the work of
  13     the Cadbury Committee, there was work carried out --
  14     very important work, I think -- on the Health Service
  15     which resulted in the production of codes of openness
  16     and accountability. So each Trust was expected to
  17     establish a system of corporate governance, which of
  18     course now has echos in the way in which we define
  19     clinical governance, which included audit committees and
  20     required them to have standing financial instructions to
  21     a certain format, required them to produce annual
  22     reports, required them to engage in quite a detailed
  23     system of internal and external audit.
  24   Q. Suppose we narrow it down to a specific example of
  25     a Trust Board which is receiving reports or hearing

   1     rumours of difficulties with a particular service or the
   2     quality of that particular service, but this is an
   3     example in which the Health Authority in question has
   4     not laid down any contractual standards for the quality
   5     of that particular service, which may be realistic.
   6        What would be the source of the obligation, if
   7     any, on the Trust Board to investigate that particular
   8     matter, given that it does not engage a contractual
   9     issue with the purchaser?
  10   A. There is absolutely no doubt in my mind -- whether
  11     I could tie it to a specific part of legislation or
  12     whether I could find a phrase in the establishment
  13     orders of Trusts that allow me to say this, I am not
  14     very sure, but there is absolutely no doubt in my mind
  15     that they would have to deal with that issue properly
  16     and effectively. I would go as far as saying that in my
  17     experience, at that time, it would be a matter of public
  18     duty to ensure that the services that were being
  19     provided were safe and effective. I have no doubt about
  20     that and I think that has been essentially the position
  21     in the Health Service since 1948.
  22   Q. So there would not necessarily be any need to rush
  23     around finding a particular guidance letter or terms of
  24     an establishment order to create a common understanding
  25     on the members of the Trust Board that part and parcel

   1     of their responsibility would be to ensure that health
   2     care provided in hospital was safe and adequate?
   3   A. That is my view. Can I just add one point, because that
   4     is a view based on specifics. I think it is very
   5     important in thinking about the regime at that time to
   6     recognise that another of the things that happened in
   7     the 1990 Act was the development of a relationship
   8     between the Audit Commission and the National Health
   9     Service and, indeed, something called the Clinical
  10     Standards Advisory Group and the National Health
  11     Service. So the Audit Commission were carrying out
  12     value-for-money studies, but studies that often strayed
  13     into quite complex clinical areas at that time. The
  14     Clinical Standards Advisory Group, perhaps a precursor
  15     to some of the changes we see now in the health service,
  16     were beginning to carry out studies which began to raise
  17     generic problems in the way care was provided in the
  18     Health Service. I have absolutely no doubt that a Trust
  19     Board functioning properly at that time would be taking
  20     that good practice on board as part of their normal way
  21     of working.
  22   Q. If we look back at the paragraph, paragraph 50 of the
  23     document on display here, would it be right to think
  24     that Trusts were required to report to regional outposts
  25     in the terms of the information contained within that

   1     paragraph?
   2   A. That is right.
   3   Q. And would their reporting obligations to those outposts
   4     have trespassed or been any wider than that?
   5   A. The people who were running the outposts were
   6     responsible to or accountable to the Financial Director
   7     in the NHS executive, as it then was, from 1st April
   8     1994 onwards, the Management Executive before that.
   9   Q. So were they solely then, as it were, a financial arm of
  10     the Department of Health, or were their interests and
  11     obligations wider than that?
  12   A. They were essentially a financial arm. They were very,
  13     very small groups of people. Just to put this in
  14     context, there were seven outposts and each outpost
  15     probably employed something like 8 to 10 people and the
  16     contrast there would be, for example, with the prior
  17     relationship with the Regional Health Authority, which
  18     may, you know, at their peak have employed 500 or 700
  19     people. So there was a very small group of people
  20     monitoring some very specific measures in Trusts, and
  21     given that there were seven outposts and probably
  22     upwards of 300 Trusts at that time, each having
  23     responsibility over a wide geographical area for about
  24     50 Trusts, so this was not a detailed process of
  25     inspection, review or scrutiny; this was a rather

   1     mechanistic measure against the parameters set out in
   2     paragraph 50.
   3        The only additions I would make to that is that
   4     I think they were probably tracking some of the higher
   5     profile national objectives. They would be looking
   6     perhaps at performance on waiting lists; they would
   7     certainly be advising and sometimes supporting the
   8     Trusts in handling the process of capital investment and
   9     capital development that I was talking with you and to
  10     the Chairman about earlier.
  11   Q. If we go back to your statement, WIT 335/9, please, and
  12     paragraph 26, you describe there a change from 1995
  13     onwards, in that all Chief Executives of NHS Trusts and
  14     health authorities had been designated as accountable
  15     officers and they are answerable to Parliament through
  16     you for the efficient and proper use of the resources in
  17     their charge, and in cases of serious management
  18     failure, they would be expected to accompany you to
  19     answer personally before the Public Accounts Committees.
  20        That continues the focus of responsibility of
  21     Trusts to the Department of Health and then upwards to
  22     Parliament, being primarily a matter of reporting for
  23     the efficient use of resources and financial matters.
  24     Is that an emphasis that you intended to give, or is
  25     that merely a reflection of a particular issue being

   1     addressed in that part of your statement?
   2   A. I think that is the impression I intended to give and
   3     the phrase "the efficient and proper use of resources"
   4     is intended to mimic, if you like, at that local level,
   5     my responsibilities at a national level as the
   6     accounting officer for the NHS, so that we were trying
   7     to localise that process. Bluntly, we were trying to
   8     give ourselves an additional management lever. The
   9     punch-line, perhaps not included in this paragraph, is
  10     that if a Trust Chief Executive or indeed a health
  11     authority Chief Executive, or soon the Chief Executive
  12     of a primary care Trust when they exist, fails to
  13     discharge their duty in a way that is not giving rise to
  14     efficient and proper use of resources, I can effectively
  15     remove the accounting officer responsibility from them,
  16     which, in my book, means they will be unable to function
  17     effectively in that job.
  18        So this was a means of tightening up accounting
  19     responsibility, and, if you like, overcoming the
  20     difficulties of operating in a big, distributed system
  21     where there is no clear line management responsibility.
  22   Q. If we stay with the matter of what your understanding
  23     would be throughout this period of the responsibilities
  24     of Trust Board members to deal with allegations or
  25     issues of the quality of clinical care or safe practice,

   1     we have heard the view expressed to the Inquiry that
   2     a Trust, as the employer of a consultant, had the
   3     primary or direct responsibility to act if allegations
   4     of poor performance or poor clinical judgment were
   5     made. On the other hand, others have responded that the
   6     responsibility on the management of the Trust -- one can
   7     perhaps trespass rather broader than Trust Board and
   8     include a CEO, for instance, or other senior management
   9     figures -- for dealing with such problems lay rather
  10     with various professional bodies, whether one is talking
  11     about the Royal College of Surgeons in the case of
  12     surgical performance, or the General Medical Council, to
  13     identify, to act on such problems of professional
  14     judgment and that if there were so, the duty of senior
  15     management or Trust Board would be limited rather to
  16     drawing it to their attention, but that the freedom of
  17     clinicians prevented any more effective or direct action
  18     from being taken.
  19        What would your view be on that circle of
  20     responsibility which is there being described?
  21   A. I do not think I accept that interpretation. It is
  22     certainly very clear, and I am sorry I cannot reference
  23     it for you. I probably could, if I search through my
  24     notes, but there is guidance --
  25   Q. Can I just interrupt you for a moment, in that you say

   1     you do not accept "that interpretation". I think I was
   2     putting two hypotheses to you, or two views. Which one
   3     were you responding to, or perhaps both?
   4   A. Perhaps you could just summarise the question again, if
   5     I got it wrong.
   6   THE CHAIRMAN: It was about the response to poor
   7     performance: was it for the Trust Board and its Chief
   8     Executive, or was it as some would say a matter for the
   9     professional bodies with which the Trust Board entered
  10     with trepidation?
  11   A. I did get the question clear in my head. There is no
  12     doubt in my mind that the Trust Board had responsibility
  13     in both areas, and I think the words that are used in
  14     the guidance are "personal conduct" and "professional
  15     conduct". Sometimes the boundary between the two is
  16     very difficult to establish. It was sometimes the case
  17     that the Trusts had in place locally agreed policies,
  18     disciplinary policies, essentially, or policies for
  19     dealing with poor performance that had these two
  20     elements to it. Personal conduct and professional
  21     conduct. And I can remember these cases during this
  22     period of change.
  23        In other cases where a Trust Chief Executive felt
  24     unable to handle a very difficult or sensitive area of
  25     professional conduct, he would often, as I said in my

   1     evidence earlier, not draw on the Regional Health
   2     Authority or the regional office because of the
   3     statutory position of that body, but draw on the
   4     expertise there. There were people who, by that time
   5     I think they were probably called Regional Directors of
   6     Public Health who had been Regional Medical Officers who
   7     would have handled these very difficult employment
   8     issues in the past, but I have absolutely no doubt
   9     whatsoever that Trust Chief Executives should not have
  10     limited their intervention solely to matters of personal
  11     conduct that they were quite at liberty to tackle issues
  12     of professional conduct; they might do with advice.
  13     They would certainly have to take on board the possible
  14     requirement to refer a particular issue or a particular
  15     case to the General Medical Council, so there was
  16     a professional dimension to this.
  17        I think it is also fair to say that some people
  18     found that process a very difficult thing to deal with,
  19     the process was often long drawn out and legalistic, and
  20     still is, and indeed, it is something that we are
  21     looking very carefully at, at this moment. I have known
  22     these cases, which perhaps have resulted in suspension
  23     and disciplinary action and appeal, to go on for a very
  24     long time, certainly many months and sometimes years,
  25     and I do not think that is an acceptable position, and

   1     it is something that we are looking at very carefully at
   2     the moment.
   3   Q. Because if we look, please, at HOME 1/221, this is the
   4     circular HC(90)9.
   5   A. You could have told me and I would have remembered.
   6     That is exactly the one I was referring to.
   7   Q. I rather assumed it was, because you spoke in terms that
   8     reflected its content.
   9   A. Yes, but I could not remember the number!
  10   Q. This is dated, of course, March 1990, so it is
  11     a pre-Trust piece of guidance.
  12   A. Yes.
  13   Q. If we go, please, to page 226 we can see there, if we
  14     scroll down a little, that there were broadly three
  15     types of cases which may involve medical or dental staff
  16     and those include both professional conduct and
  17     professional competence cases?
  18   A. Yes.
  19   Q. If we go down a little, please, we can see that they are
  20     cases involving professional conduct and professional
  21     competence, how they are dealt with. The circular at
  22     that stage envisaged that the Chairman of the Health
  23     Authority would need to decide whether there was a prima
  24     facie case?
  25   A. Yes.

   1   Q. Presumably, post 1991, the role of the Chairman of the
   2     Health Authority would be replaced by action by whom?
   3   A. By the Chairman of the NHS Trust.
   4   Q. He has to --
   5   A. In cases where NHS Trusts existed. Of course some
   6     health authorities would still have these residual
   7     management responsibilities.
   8   Q. I am positing the example of the Trust in all these
   9     cases. He may need to have an investigation conducted
  10     in order to decide whether there is a prima facie case
  11     and the mechanism envisaged here is that the
  12     investigation would be placed in the hands of either the
  13     Regional or the District Director of Public Health on
  14     behalf of either the Regional or District Health
  15     Authority?
  16   A. Yes.
  17   Q. Whichever would be the appointing authority?
  18   A. Yes.
  19   Q. That mechanism enabled an investigation to be carried
  20     out by persons who were not directly attached to the
  21     hospital in question?
  22   A. That is right.
  23   Q. Do you think that the mechanisms which were set up after
  24     1991, again looking at the Trust example, were
  25     satisfactory replacements for that procedure?

   1   A. There is one area that I am slightly struggling with
   2     here and that is the sentence which says the decision
   3     which is reached should be in the hands of the Regional
   4     or District Director of Public Health on behalf of the
   5     Regional or District Health Authority. The
   6     interpretation of the 1990 guidance on these issues
   7     would vary quite considerably, depending on what point
   8     of time we were between 1990 and 1996, and it was, as
   9     I remember it, sometimes the case the Regional Health
  10     Authority is mentioned because they were the primary
  11     employers of consultant staff, and it was sometimes the
  12     case during that period that consultants who were
  13     working on Trusts, as I remember it, retained their
  14     employment authority as the Regional Health Authority
  15     and only lost that at the point at which the regional
  16     health authorities were abolished from 1st April 1996.
  17        The reference to the District Director of Public
  18     Health is something of a red herring here, I think,
  19     because that really only applied to people who were
  20     employed either in the public health specialty or as
  21     community-based doctors, child health doctors and things
  22     like that, at a community level, a very low number of
  23     people.
  24        The real point here would have been to determine
  25     whether the consultant concerned was an employee of the

   1     NHS Trust or, as part of a transitional arrangement,
   2     still the employee of a Regional Health Authority.
   3        In the second case, the example I referred to, the
   4     Trust Chief Executive would have been working in
   5     conjunction with the Regional Director of Public Health
   6     to deal with the matter. In the former case, where
   7     a consultant was maybe a Trust appointment, as some new
   8     consultants were, and indeed some who had changed their
   9     terms of employment, the matter would have been dealt
  10     with by the Trust Board. For "Health Authority" in that
  11     sentence you would read "NHS Trust".
  12   Q. Perhaps we could just carry on over the page, to give
  13     the full context of the sorts of investigation that are
  14     considered may take place, because we see that there is
  15     an initial investigation envisaged by the Regional or
  16     District Director of Public Health, but then if we
  17     scroll down, if there is a prima facie case established
  18     or considered to have been established, the practitioner
  19     is notified and then there is provision made for
  20     proceeding to an Inquiry. There is further detail given
  21     in the remainder of the circular, but what one can see
  22     from paragraph 7 is that nobody involved in the hospital
  23     in question would be made part of that Inquiry team?
  24   A. That is right. I am not sure I am absorbing this as
  25     quickly as I should from the text. We can come back to

   1     the text if necessary, but my memory is that the inquiry
   2     team was made up of specialist sources of advice, if you
   3     like, they were nominated by the Joint Consultants
   4     Committee and the appropriate Royal Colleges.
   5   Q. The fault is mine, because I should have referred you to
   6     paragraph 8 in any event. What I was paraphrasing
   7     rather than quoting, if we scroll down a little, please,
   8     is the phrase "no member of the Panel should be
   9     associated with the hospital in which he works, or in
  10     the case of a doctor, in public health medicine or the
  11     community health service in the authority in which the
  12     practitioner concerned works". Then one sees further
  13     detail.
  14        The point I was seeking to put to you was that
  15     there is a mechanism which gives to the person
  16     conducting the inquiry the ability to draw on a number
  17     of sources of expertise and provides that they should
  18     not be located within the hospital in question.
  19        If we take the example of a Trust where the
  20     contracts are held by the Trust in question, and so the
  21     Region or the District has no formal involvement as an
  22     employing authority, do you think that the systems that
  23     were set up in such Trusts were adequate substitutes for
  24     the mechanism set out in this guidance?
  25   A. I do not think I could say with any certainty what the

   1     systems were. I can see clearly the strengths of this
   2     system in that it has a strong element of expertise and
   3     independence. I think there is another side to this
   4     coin, whoever. Normally when this issue is discussed
   5     with me, I am being criticised because this is thought
   6     to be terribly medically dominated; it is thought to be
   7     a very legalistic process, one that requires
   8     determination from the employing authority to see it
   9     through, and indeed we have had in the past gross
  10     examples of delay in setting up these panels and
  11     providing the right group of experts and all the rest of
  12     it which has slowed the whole process down.
  13        I think it is worth saying in that context, and
  14     indeed in relation to this whole issue, that I am sure
  15     somewhere else in this guidance it makes clear that if
  16     there is at stake a clear question of public safety,
  17     there is a route by which the doctor concerned, the
  18     consultant concerned, be suspended.
  19   Q. I think what I am seeking to explore with you is what
  20     your understanding is of the relevance of this guidance
  21     to Trusts after 1991. What applicability did it still
  22     have, and was it adequate guidance?
  23   A. I think that is complicated in the way I have
  24     suggested. I am not trying to make this more difficult
  25     than it is, but I think a lot depends on the point at

   1     which employment responsibility transferred essentially
   2     from the Regional Health Authorities to the Trusts.
   3        I think this in many ways is a sound piece of
   4     guidance, and I think I could mount an argument that
   5     says that any Trust worth their salt would want to
   6     include these sort of elements in their approach. They
   7     would want it to be fair, they would want it to be firm,
   8     they would want the power of suspension, they would
   9     certainly not want to tackle issues directly that were
  10     outside their own area of expertise. Equally, I think
  11     this guidance as it currently stands, this 1990 guidance
  12     as it currently stands in 1999, is not really fit enough
  13     for the purpose, and it is being thought through at the
  14     moment in terms of trying to ensure some streamlining
  15     and improvement.
  16   THE CHAIRMAN: I have one question, Sir Alan, just going
  17     back to the first page of this. When you were talking
  18     a while back, you contrasted what you described as
  19     "personal conduct" with "professional conduct".
  20   A. Yes.
  21   Q. This document has three categories: personal conduct,
  22     professional conduct and professional competence?
  23   A. Yes.
  24   Q. Were you including in "professional conduct" both the
  25     notion of whatever conduct may be and competence?

   1   A. I think I was. I was drawing from memory and I am sure
   2     somewhere later, maybe in an appendix, these three
   3     things are accounted for, but the distinction I always
   4     make in my mind is, you know, personal conduct may be
   5     absenteeism or pinching petty cash. Professional
   6     conduct or professional competence is about the
   7     treatment of patients, about communications with
   8     patients, about keeping good medical records; it is
   9     about acting in the patient's interests at all times.
  10   Q. When you talked about how you would regard it as part of
  11     the Trust's responsibility to take account of
  12     professional conduct, you were not intending to exclude
  13     professional competence?
  14   A. No, I was not.
  15   MISS GREY: Would it be right to take from your previous
  16     answer, the fact that this guidance has not been updated
  17     since 1990, firstly?
  18   A. I am sorry?
  19   Q. It is right that this guidance has not been updated
  20     since 1990?
  21   A. It is correct that it has not been updated. I think
  22     there have been some adjustments to the system which
  23     have been designed to speed up the process. For
  24     example, I see every six months, personally, a list of
  25     current suspensions and I ask questions if I think there

   1     is an undue delay in these, because I think that can be
   2     to the detriment of the individual involved and to the
   3     detriment of the service. I think throughout all of
   4     this, one wants to balance the responsibilities of the
   5     individual and the responsibilities of the requirements
   6     placed on employing authorities.
   7        The other thing that it is terribly important to
   8     balance, and I do not want my answer on professional
   9     conduct and competence to be interpreted as a sort of
  10     hard-nosed question of employment practice: of course it
  11     is important in all of these things to balance the
  12     relationship between the employing authority and the
  13     appropriate regulatory authority, so I do not intend my
  14     comments in any way to diminish the role, for example,
  15     of the GMC or the UKCC in relation to nursing in dealing
  16     with these issues of professional conduct.
  17        My simple point is that actual cases very often
  18     contain all of these elements, intermingled in the most
  19     complex way, and I think everyone has a distinctive role
  20     to play in sorting that out and that includes the
  21     employer.
  22   Q. Do you think that employers were given adequate guidance
  23     in the years from 1991 to 1995 in how to handle cases
  24     involving professional conduct and professional
  25     competence, in particular, after the transition to Trust

   1     status and a shift in holding of contracts at least for
   2     some Trusts?
   3   A. I think the transition, as I have tried to explain,
   4     mainly took place in 1996 on the abolition of the
   5     regional health authorities, where the employment
   6     relationship between consultant staff and regional
   7     health authorities broke down. So if your question was
   8     rephrased to say "Did people receive adequate guidance
   9     at that point?" I would say in retrospect, no. I do not
  10     think this guidance is good enough, nor has it proved to
  11     be good enough over the last couple of years, which of
  12     course is why we are currently looking at it.
  13   Q. If we could look, please, at WIT 351/1, this is the
  14     statement of Sir Duncan Nichol to the Inquiry. If we go
  15     down a little, we should see a description of the NHS
  16     Trusts and NHS outposts. There is a sentence beginning:
  17        "NHS Trusts were introduced from April 1991 ..."
  18        Do you have that?
  19   A. Yes.
  20   Q. Then it continues:
  21        "NHS ME outposts monitored Trusts to ensure they
  22     were meeting their financial obligations."
  23   A. Yes.
  24   Q. I would ask you perhaps to read through to the end of
  25     that paragraph. We have touched on this already in your

   1     evidence, but would you agree with that as an accurate
   2     summary of the role of the outposts, their activities?
   3   A. Yes, I would, and I think the important element that
   4     I missed out when I was talking about this was the
   5     review of Trust business plans, although they were at
   6     the very early stage of development through that period,
   7     but I think that is pretty accurate, yes.
   8   Q. The regional outposts, the NHS ME outposts, were
   9     abolished as part and parcel of the changes that
  10     culminated in legislation in 1996, so I think that their
  11     abolition was foreshadowed by the Jenkins report, or
  12     suggested by that.
  13   A. To say they were abolished suggests they were statutory
  14     bodies. They were not. They were not abolished; their
  15     work was integrated into that of the new offices. In
  16     some ways they were the precursors to the model of the
  17     new offices. They had no basis in legislation. They
  18     were as the word says, outposts of the NHS Management
  19     Executive. They were part of the NHS Management
  20     Executive based in several different parts of the
  21     country.
  22   Q. So what was the verdict on their effectiveness and
  23     performance?
  24   A. The verdict on their performance was in the areas for
  25     which they had responsibility, set out in the

   1     paragraph from Duncan Nichol's statement and what I have
   2     been saying, they were really quite effective. Trusts
   3     liked them a great deal and contrasted the hands-off
   4     approach with the rather bureaucratic approach of the
   5     regional health authorities. The whole point about
   6     regional offices was perhaps to work towards a more
   7     rounded approach to the management and performance of
   8     the Health Service, but to retain some of the really
   9     quite shrewd lessons that were learned from the outposts
  10     during that period, and the people in these jobs at that
  11     time built up some very specific expertise which is now
  12     part and parcel of the regional office roles.
  13   Q. If we go back, please, to HOME 2/174 --
  14   A. Can I make one other point, perhaps? It is just
  15     a contextual point, to make the point that by having the
  16     outpost on the one hand and the Regional Health
  17     Authority's fledgling regional offices on the other
  18     hand, the attempt was being made to mimic the separation
  19     of purchaser and provider responsibilities in the NHS.
  20     The crucial point about this document which is now on
  21     the screen is that that brought them together again in
  22     one place.
  23   Q. What was it envisaged, then, to take that a bit further,
  24     would be the benefit of bringing that expertise back
  25     under one roof rather than maintaining the

   1     purchaser/provider split?
   2   A. I think the benefits or the perceived benefits were
   3     two-fold: one that we would adopt a much more coherent
   4     approach to the planning development and control of the
   5     NHS -- these in the document you are showing there would
   6     be the key words in that document, the key
   7     responsibilities of the regional offices were to plan,
   8     develop and control the Health Service.
   9        I can remember a period in 1993, before this
  10     integration took place, where to solve a problem that
  11     crossed institutional boundaries, maybe boundaries of
  12     different health authorities, different Trusts, and
  13     maybe at that time some GP fundholders, you had to have
  14     a great army of people in the room to set about what was
  15     a rather simple problem. I thought that was not a very
  16     good way of doing things and I was very supportive of
  17     the notion of streamlining the top management of the
  18     Health Service, which reduced in that period in scale.
  19     If you take the outposts of the regional health
  20     authorities and the NHS Management Executive together,
  21     in the early 1990s a group of about 9,000 people to
  22     a group that is now substantially less than 2,000
  23     people.
  24        So there was a real attempt to get smarter in the
  25     top management of the Health Service.

   1   Q. If we could go to 183, please, of this document. We can
   2     see there that the present changes are designed to
   3     ensure or assist in achieving a number of objectives.
   4     If we scroll down, please, we can see that the last
   5     bullet point is that "The continued development of the
   6     purchasing function and greater use of Trust management
   7     freedoms will create further incentives to improve
   8     quality and ensure efficient use of resources."
   9        The reference there to "use of Trust management
  10     freedoms": what had been the experience by the date of
  11     this document -- October 1993 -- in the use that Trusts
  12     had made of their management freedoms, particularly in
  13     their freedom to develop and to promote capital
  14     projects?
  15   A. I think, if you do not mind, I go wider than capital
  16     projects, because I think the balance sheet here is
  17     pretty interesting, because my sense is that there were
  18     merits in local Trust freedoms, but there was also
  19     a downside. My balance sheet would be that there was
  20     certainly improved management at a Trust level, and
  21     I think one of the very significant parts of that was
  22     the development of management expertise amongst doctors
  23     and nurses, the so-called medical directors and nursing
  24     directors at Trust level, and indeed rather more
  25     prosaically, the develop of the finance function.

   1        I think there was real innovation in systems
   2     development in some places and a real attempt to begin
   3     to tackle, to move beyond, if you like, the rather
   4     sterile business of financial control and to tackle
   5     issues of quality improvement and some really quite
   6     imaginative capital developments which, if you like,
   7     broke with some of the earlier traditions of the Health
   8     Service.
   9        So there was an upside, but the difficulty was and
  10     the difficulty still is, that that upside is the result
  11     of strong leadership and executive management at a local
  12     level, and our experience is that even now, after lots
  13     of efforts to improve across the board, the management
  14     expertise and the clinical leadership in the NHS is
  15     still pretty patchy. So the downside was, there was no
  16     consistent means in many places of spreading good
  17     practice; there were gaps that were exposed in our
  18     planning of services, with no apparent means other than
  19     intervention to deal with them -- I am thinking about
  20     things like mental health services and paediatric
  21     intensive care, and there were some quite deep-seated
  22     structural problems. If you have even a quasi market,
  23     you have to be interested in the structure of that
  24     market and that structure was no more than the past
  25     history carried forward. So, as in my earlier example

   1     when it came to sorting out the pattern of health
   2     services in London, there was no market mechanism for
   3     rationalising hospital services and investing in primary
   4     and community based services in London. That required
   5     a succession of interventions.
   6        So these arrangements were doing a job in
   7     stimulating innovation in some places, but they were
   8     failing in the sense that there was no adequate planning
   9     of services across boundaries.
  10   Q. And to come back to capital freedoms, what use did
  11     Trusts make of their powers to build, to extend, to
  12     spend money by way of capital projects?
  13   A. I think to the extent that they could, they made good
  14     use of that, but one of the financial parameters that we
  15     talked about, one of the things that the outposts
  16     measured very consistently, was that each Trust had to
  17     make a 6 per cent return on capital invested, had to be
  18     very aware for the first time of the issue of capital
  19     charges, of handling depreciation. These things were
  20     all trying to mimic life in the public sector, trying to
  21     mimic life in the private sector, so there was quite an
  22     exacting regime, but those who learned how to play the
  23     system, those who had good mechanisms for generating
  24     capital internally, perhaps by land sales or some sort
  25     of rationalisation of their estate, were making good

   1     progress and doing good things.
   2   Q. The idea was that only those schemes which had purchaser
   3     support would go forward?
   4   A. Yes.
   5   Q. Was that a significant factor in hampering Trust freedom
   6     in that area if purchasers themselves had financial
   7     constraints upon them?
   8   A. I think that I can only think of one example, one rather
   9     spectacular example, of a Trust who, presumably with
  10     support up the line, barged on to make a very
  11     significant capital investment that led to a rather
  12     silly over-provision of services in a particular area
  13     and one that could not be funded by the local health
  14     authority.
  15        That sort of thing, when dealing with -- remember
  16     the words from earlier on -- accountability, the proper
  17     and efficient use of public money, could not really be
  18     encouraged, so again, it led to an intervention.
  19        Increasingly this was part of the responsibilities
  20     of regional offices as they developed, increasingly the
  21     attempt was being made if you like at an intermediate
  22     level to reconcile the views of health authorities and
  23     GP fundholders and Trusts about the wisdom of particular
  24     capital developments in particular areas.
  25        So once again, in the cold light of dawn, the

   1     Trust freedoms were being sort of squeezed a little,
   2     because the market dynamic was being played out in
   3     a very public setting.
   4   MISS GREY: Sir Alan, it is probably time now to take
   5     a break, for perhaps a quarter of an hour?
   6   THE CHAIRMAN: Yes, thank you. Let us adjourn now and
   7     reconvene at about 11.05.
   8   (10.50 am)
   9               (A short break)
  10   (11.05 am)
  11   MISS GREY: Sir Alan, we have spoken about the
  12     responsibilities of Trust Boards vis-a-vis the
  13     Department of Health. Clearly they also had
  14     responsibilities, contractual responsibilities, to
  15     purchasers in the sense that the word "contract" was
  16     used within the NHS.
  17        So purchasers were meant -- is this right -- to
  18     hold Trusts accountable against the standards that had
  19     been set in those service agreements?
  20   A. Trusts were meant to establish a contractual
  21     relationship with either health authorities or GP
  22     fundholders to provide services to a certain
  23     specification.
  24   Q. And presumably those purchasing bodies were meant to
  25     scrutinise and detect whether or not Trusts had been

   1     able to fulfil those contractual requirements or
   2     obligations?
   3   A. That is correct.
   4   Q. Did the purchasing bodies have enough information
   5     available to them, looking across the period from 1991
   6     to 1995, to allow that to happen effectively?
   7   A. Everything would hinge on the definition of the word
   8     "effectively". Let me reply by saying that I think it
   9     is fair to say that the contracting system throughout
  10     that period, throughout the existence of the so-called
  11     market arrangements in the health service were pretty
  12     rudimentary. That is not to say that information did
  13     not improve with time and that information really was
  14     about three or four things: it was about costs, the
  15     volume of work, it was often about the case mix and
  16     sometimes it was about the quality of the work or the
  17     outcomes that were being sought from the provider of
  18     health services.
  19   Q. But to what extent was information available, you say
  20     "sometimes", about quality or outcomes?
  21   A. I think it varied enormously. It is important to put
  22     that in some sort of perspective. The definition of
  23     "health outcomes" is something that every health system
  24     in the developed world has been struggling away with for
  25     the last 10 or 20 years. This is not an easy area and

   1     I would not want to give the impression that the system
   2     was rudimentary and therefore people did not look at
   3     health outcomes. The whole question of measuring health
   4     outcomes is a sort of developing science, really, or
   5     developing work, right across all health systems, not
   6     just the NHS.
   7   Q. Do you think that the need for that, or its importance,
   8     was appreciated back in 1989 to 1991, when this policy
   9     was developed and the managed market created with only
  10     very rudimentary information about such matters?
  11   A. Oh yes. I think there was a sort of parallel track of
  12     work that would lead me to the view that that was
  13     appreciated. The development of clinical audit, the
  14     focus on clinical effectiveness, the important work that
  15     was prompted by the NHS R&D programme which had its
  16     origins in a 1988 House of Lords Select Committee report
  17     and then resulted in a huge initiative to develop the
  18     notions of evidence-based practice in the UK.
  19        So all of these things, if you like, were
  20     happening in parallel with the development of the
  21     internal market, and indeed, for some of us, these
  22     things were much more interesting than playing around
  23     with the market mechanism.
  24   Q. If we go back to Sir Duncan Nichol's witness statement,
  25     WIT 351/3, please, and we look at paragraph 5, he talks

   1     about the centrally funded quality programme which was
   2     established to take forward initiatives which emphasised
   3     the centrality of the patients' experience. He listed
   4     four areas of quality improvements: "appointment
   5     systems; information to patients; hospital waiting and
   6     other public areas; and consumer satisfaction surveys."
   7        The impression that one might get from that
   8     statement, and from various pieces of evidence before
   9     the Inquiry, was that national priorities such as, for
  10     instance, waiting lists or Health of the Nation targets
  11     or Patient's Charter standards, were matters upon which
  12     district health authorities tended to concentrate in
  13     setting contractual standards with providers. Would
  14     that appear to be a fair summary of the effort or the
  15     energy levels expended on types of quality indicators?
  16   A. I think that is fair. I think you had to be very
  17     special indeed and there were some very special people
  18     who could do it, who would handle all of the national
  19     initiatives which would rain down in the Department of
  20     Health and still unfortunately do, to a certain extent,
  21     sort of take these in their stride, if you like, and
  22     focus on coherent approaches at a local level to
  23     improving the patient's experience, so that, yes,
  24     I mean, it would be the case that most people would put
  25     most onus on following the national priorities, as it

   1     were.
   2   Q. What is missing from that list, although it is headed
   3     "Quality of service initiatives", would be any
   4     indicators that go directly towards the quality of care
   5     in terms of the safety of treatment and its competence?
   6   A. Yes.
   7   Q. What were the barriers for purchasers in trying to put
   8     those criteria in the framework when negotiating
   9     contracts?
  10   A. I do not think there were barriers. But just to take
  11     your very specific point still on the screen here,
  12     Duncan Nichol was referring there, if you like, to the
  13     non-clinical aspects of quality improvement, and for
  14     anyone who has had any contact with the Health Service
  15     in the country, the things he lists there are very
  16     important, and indeed are still very important, and
  17     still require a great deal of improvement and
  18     attention.
  19        I think it is fair to say that the whole question
  20     of measuring the quality of clinical services, measuring
  21     health outcomes, properly interpreting audit results,
  22     was a developing feature of the Health Service. It is
  23     one that had been allowed to develop, if you like, in
  24     the professional arena, although around this time there
  25     were some important changes. For example, the 1989

   1     White Paper referred I think for the first time to
   2     managers having access to anonymised audit information.
   3        So there were a whole number of things going on,
   4     if you like building blocks being put in place, that
   5     leads to, I hope, what are now a current set of policies
   6     that take the early work done on clinical audit and
   7     clinical effectiveness and apply it in the Health
   8     Service today.
   9   Q. Perhaps to summarise, firstly, would I be right in
  10     understanding from your earlier answer that you agreed
  11     with the proposition that I was putting to you, that in
  12     effect non-clinical standards or quality standards
  13     tended to be the focus of purchasers' activity, rather
  14     than clinical standards?
  15   A. Tended to be, but were not exclusively so. I think that
  16     would be, if you like, the territory that most people
  17     felt comfortable with, but what I think I have tried to
  18     emphasise throughout this last phase of questioning is
  19     that there was an important parlour of work going on,
  20     which later, and certainly now, is to be integrated with
  21     the process of commissioning health services so that the
  22     old approach of focus on cost and volume and
  23     non-clinical aspects of quality is now supplemented by
  24     important work on health outcomes and clinical
  25     effectiveness.

   1        My point is that people were not ignoring that
   2     simply to concentrate on financial issues. They were
   3     just beginning to absorb it as part of the way that
   4     things would not done in the Health Service, and I think
   5     I have seen evidence to this committee, for example,
   6     from Dr Winyard on the evolution of clinical audit, that
   7     is consistent with what I am saying: that people were
   8     very, very interested in these ideas, but they were not
   9     current enough to be applied to the contractual process
  10     in all cases.
  11        I think the other simple but important point
  12     I would make is that some people purchasing health
  13     services on a contractual basis were highly skilled and
  14     qualified GPs, who would know about the latest on health
  15     outcomes or the very detailed measures that they might
  16     track in relation to the success, for example, of
  17     a diabetic service, right down to very detailed
  18     metabolic measures. So I do not want to give the
  19     impression that this was barren land, but it was
  20     a developing science.
  21   Q. I used the word "barriers" to assessment of clinical
  22     outcomes at an earlier stage, and you I think quarreled
  23     with that, but how would you assess the proposition that
  24     one barrier to the assessment of these measures would
  25     have been an imbalance of information or knowledge

   1     between purchaser or provider, particularly when dealing
   2     with specialised services?
   3   A. I think there was an imbalance of knowledge between
   4     purchaser and provider and an imbalance of knowledge
   5     between clinician and manager, but that, I think, was
   6     not a sort of systemic weakness; it was a consequence of
   7     the fact that this work was being developed I think
   8     quite rightly initially in the clinical community.
   9     Clinicians themselves had to build confidence in these
  10     processes of audit and review, and some were able to do
  11     so more quickly than others. Radiologists, for example,
  12     for years, have had very precise measures of quality
  13     assurance in what they do, because it is relatively
  14     simple to do that, compared with some other aspects of
  15     medicine. So this was a developing science.
  16   Q. So on the purchasing front one can summarise by saying
  17     that the primary focus may well have been upon
  18     non-clinical quality measures, but that there was
  19     developing interest and knowledge, and expertise, on the
  20     clinical outcome measures?
  21   A. May well have been, but not exclusively so, and
  22     developing interest that was being handled, I think, in
  23     quite an enlightened and structured way, and indeed,
  24     I go further and say, had these developments not taken
  25     place, the present government who now have a very strong

   1     focus on the quality of clinical services, setting
   2     national standards and processes of review and clinical
   3     governance, would not have been able to do what they are
   4     doing because the building blocks would not have been
   5     placed. So these were important building blocks.
   6        The NHS programme and their work on clinical
   7     effectiveness and the assimilation and analysis of
   8     evidence was leading the world in this field, so we
   9     should not get ourselves into the position of thinking
  10     we were somehow off the pace on this. There was a lot
  11     of hard work going on, but it had not developed to the
  12     point at which it would automatically become part of
  13     this new contracting process.
  14   THE CHAIRMAN: Sir Alan, I think part of the thrust of the
  15     questioning -- Miss Grey will tell me if I am wrong --
  16     is that to a degree the purchasers were, at the start of
  17     the process, making purchasing decisions somewhat in the
  18     dark as to the quality they were entitled to insist upon
  19     or expect, and though these developments are as it were
  20     catching up, to a degree there was a need for catching
  21     up, and some could argue that the process should have
  22     been the other way round: have the information systems
  23     in place before you introduce the other process?
  24   A. I think I am jibbing a little bit at the term "catching
  25     up". My simple point here is that there were areas of

   1     this work where we were leading the world. There were
   2     other areas where we had a lot to learn from other
   3     developed countries.
   4   Q. Your words were "parallel development"?
   5   A. Parallel development, yes. It is certainly true that in
   6     a perfect world, having more information about the
   7     quality of clinical care, more information about health
   8     outcomes, would have been an advantage in the
   9     development of this contracting process, but things had
  10     not moved to that degree. That is my simple point.
  11   Q. Does it not to a degree mean that the purchaser, who is
  12     after all supposed to be representing the interests of
  13     those on whose behalf the purchasing decisions are made,
  14     is to a degree unable to appraise himself, personifying
  15     the purchaser, of some of the most important matters
  16     which would go to purchasing a particular service?
  17   A. I think that is true without doubt and there is no doubt
  18     that key constraints in the development of these
  19     relationships were the lack of good clinical information
  20     systems and the lack of properly defined and agreed
  21     measures of health outcome.
  22        I accept that. What I think I am trying to avoid
  23     is some implicit suggestion that somehow the purchasers
  24     were neglectful in not being able to handle these sort
  25     of issues. I do not think they were. I think they were

   1     just working with the tools that they had available at
   2     the time. That is my point. That is the emphasis I put
   3     when I think of these things as parallel developments.
   4        If we were to draw a timetable from 1989 to 1999,
   5     I could track the parallel development of all these
   6     things. The real skill at any level in the service is
   7     to interleave these things so you begin to build
   8     a coherent system.
   9   MISS GREY: If the tools that the purchasers had at their
  10     disposal were evolving during this period and being
  11     refined and no doubt being improved, and they were using
  12     them to the best of their ability but they were
  13     necessarily imperfect during this period, where do the
  14     guarantees of good clinical performance derive from, if
  15     the purchasers did not have at their disposal a complete
  16     and adequate lever to achieve that result?
  17   A. Whether the techniques were developed or not, they
  18     should principally derive from the practice of
  19     individual clinicians and clinicians working in teams.
  20     The commitment of these individuals and teams to agree
  21     the standards of practice that they are trying to
  22     achieve, to audit and compare progress against these, to
  23     be willing to learn from experience, to take remedial
  24     action and if necessary re-audit, the so-called audit
  25     cycle I have seen mentioned in previous transcripts from

   1     this hearing.
   2        I think that was deeply embedded in the psyche by
   3     probably 1995, and I think that is the first point at
   4     which the GMC guidance on good medical practice,
   5     including the fact that individual clinicians should be
   6     taking part in that sort of audit process, but there was
   7     a long process of getting there that started with the
   8     confidential inquiries in the 1980s and, you know,
   9     worked through a whole series of professionally-based
  10     initiatives.
  11        There is a study, which I cannot reference but
  12     I think it is a 1995 study from the National Audit
  13     Office, that shows very high participation rates amongst
  14     clinicians in the audit process and which shows,
  15     I think, across the Health Service, something like
  16     20,000 schemes. There was a period from 1990 to 1994
  17     where we invested more than œ200 million in this
  18     process.
  19   Q. If we take the example of a clinician -- we will assume
  20     it is one clinician just for the sake of the example --
  21     who does not have insight into his or her own
  22     difficulties of performance and we take a team that is
  23     dysfunctional and is unable to assess the strengths and
  24     weaknesses of that team, or to perceive its own
  25     weaknesses in doing so, where does the line of

   1     responsibility for that situation go next, after the
   2     team has failed?
   3   A. I think there are two issues here. One is clearly
   4     individuals have a responsibility to ensure that their
   5     practice is up to date, but there is also, I think,
   6     a system responsibility, a systemic responsibility, if
   7     you like. In 25 years, I do not think I have met anyone
   8     in the health service who turns up wanting to do a bad
   9     job, but I think there are circumstances in which people
  10     do not do their best and sometimes that is because of
  11     their own weaknesses, the weaknesses in their own
  12     professional practice. Sometimes it is because the
  13     system fails them.
  14   Q. That is to describe the problem at the level of the
  15     individual clinician. What I am asking is: how does it
  16     get resolved, because we have described, for instance,
  17     that contractors, purchasers, may be responsible for
  18     quality?
  19   A. Yes.
  20   Q. But may have inadequate tools at their disposal to
  21     monitor that quality?
  22   A. Yes.
  23   Q. So that line of accountability, as you described it, is
  24     capable of failing even if it may or may not in an
  25     individual instance?

   1   A. If you want me to accept the notion that systems allow
   2     failure to occur, I accept that notion. In the period
   3     that we are talking about, because you use the word
   4     "purchaser" in your question, we were relying on four
   5     things to ensure competence in clinical practice. We
   6     were relying on the process of professional
   7     self-regulation. We were relying on the developing
   8     processes of audit. We were relying on the rather
   9     rudimentary internal market that we have discussed, and
  10     we were relying on hierarchical relationships, which, as
  11     we explored before the break, still existed between the
  12     Department of Health and health authorities, and in
  13     a very narrow way to some aspects of the work of Trusts.
  14        All of these things would have to be perfectly
  15     aligned to ensure that failure did not occur. Indeed,
  16     you could go even deeper in thinking about the incentive
  17     structures that surround that sort of process. We are
  18     dealing here with a very complex dynamic. Faced with
  19     that, I do not think one should just walk away and say
  20     that no-one is responsible. I think individuals are
  21     responsible; I think the system is responsible.
  22        In that complex situation which exists, not just
  23     in the NHS but in every health system, it seems to me
  24     that the key thing is to ensure that the roles and
  25     responsibilities of individuals, the roles and

   1     responsibilities of statutory bodies, the roles and
   2     responsibilities of the Department of Health and the NHS
   3     Executive, are adequately defined, so that everyone can
   4     see the distinctive contribution that each of these
   5     players should make to ensuring that we have a system
   6     that is as risk-free as possible.
   7   Q. Can you define, in that case, the role or responsibility
   8     of the Department of Health in ensuring the adequacy of
   9     paediatric cardiac services in a Trust such as Bristol
  10     during the period of our Inquiry, looking at 1991 to
  11     1995?
  12   A. The role as you know focuses around the existence of the
  13     Supra Regional Services Advisory Group and then
  14     subsequently the national specialist commissioning
  15     group. Both of these things operated under the auspices
  16     of the Secretary of State, who has a responsibility to
  17     promote comprehensive health services in this country
  18     and asks the NHS Executive to ensure these services are
  19     effectively managed.
  20        The nature of that group changed. The nature of
  21     that national commissioning activity changed during the
  22     period that we are talking about. In the first
  23     instance, the group which essentially was a collection
  24     of professional experts and administrative support staff
  25     was chaired by someone who was the Chairman of the

   1     Regional Health Authority, and that person reported to
   2     the Secretary of State. That changed I think in 1995/96
   3     as the regional health authorities disappeared.
   4        The group is now chaired by a regional director,
   5     who reports to the Secretary of State, not through
   6     a grouping of regional Chairmen, but through a group of
   7     officials who make up the NHS Executive Board.
   8        So that territory is described in quite some
   9     detail in my statement.
  10   Q. To put it in focus, the Inquiry has heard two opinions
  11     about the responsibility or otherwise of the Department
  12     of Health, and by that I mean the Supra Regional
  13     Services Advisory Group and the Ministers to which it
  14     reported, for the quality of the paediatric cardiac
  15     services.
  16        One is that because it was the Department of
  17     Health which as it were provided the money, and which
  18     also had direct contractual relationships between the
  19     unit and itself, so that this service stood outside the
  20     normal purchaser/provider territory, it was the
  21     Department that was responsible for ensuring or
  22     monitoring and assessing the quality of the service that
  23     was being provided.
  24        The alternative view that has been expressed by
  25     officials within the Department of Health is that it was

   1     the health authorities -- this is "health authorities"
   2     unspecified -- that retained that role as part and
   3     parcel of their public health functions and that the
   4     funding mechanism that was represented by the Supra
   5     Regional Services Advisory Group did not alter that
   6     basic public health responsibility.
   7        Can you comment on that conflict of views?
   8   A. I do not think I am willing to choose either/or.
   9     I think I fall back on my point. What I want to avoid
  10     at all costs is any notion that somehow no-one is
  11     responsible, because I do not believe that to be the
  12     case, but I believe that the clinicians directly
  13     involved in provision of that service have some
  14     responsibility. Health authorities and the Trust which
  15     was the home to that service have some responsibilities,
  16     as we discussed earlier this morning, and the Department
  17     of Health clearly had some responsibilities, not just in
  18     relation to resource allocation in my view, back to this
  19     point about systemic failure, but to ensure that there
  20     was a system in place that ensured that these services
  21     were being properly provided.
  22        I think that the crucial thing would be to be
  23     absolutely sure in each of these cases that the roles
  24     and responsibilities, the distinctive roles and
  25     responsibilities of each of these players, was

   1     adequately defined.
   2   Q. Can I press you on two parts of that? Firstly, you say
   3     that health authorities had a role, a continuing role.
   4     We have discussed, I think, where the responsibility of
   5     the Trust would derive from. Can you help us further as
   6     to firstly whether by "Health Authority" you mean
   7     district or region, or both?
   8   A. I think I mean district in the sense that the people who
   9     were referred, the children in this case, who were
  10     referred to that service, were referred to that service
  11     because of a clinical need and health authorities had
  12     a responsibility for ensuring that the health and
  13     clinical needs of their population were being met. So
  14     I think I am accepting perhaps more of a theoretical
  15     responsibility, compared with the responsibilities of
  16     others.
  17   Q. If we remain with the district, the actual people doing
  18     the referring would have been individual clinicians,
  19     possibly paediatricians, possibly cardiologists, within
  20     a district?
  21   A. They would not be within a district. This is the
  22     point. They would be operating within another Trust and
  23     they would be making what is referred to as a "tertiary
  24     referral", and essentially, you have a new version of
  25     purchaser/provider here where the purchaser is a Trust

   1     perhaps providing secondary care and the provider is
   2     a Trust providing tertiary care. So this is a new
   3     complication which we have not yet explored this
   4     morning.
   5   Q. When I say "within a district" I mean within the
   6     geographical boundaries of a particular district, but it
   7     is a clinician who makes the referring decision and
   8     because of the funding arrangements for supra-regional
   9     services, neither the referring Trust in which the
  10     clinician is sited, nor the district within which the
  11     Trust is sited, would have to pay?
  12   A. That is correct.
  13   Q. So is there any real locus for the responsibility of
  14     the district to satisfy itself that those referring
  15     decisions are being made properly?
  16   A. I think I go back to what I said before: I think it is
  17     more of a theoretical responsibility. There is, or was
  18     at that time a clear responsibility on district health
  19     authorities to ensure that the health and health service
  20     needs of their population were being adequately met and
  21     that means the whole range of services from primary to
  22     tertiary services. But beyond that, I can see that
  23     there is no real responsibility here and that the
  24     responsibility is much easier to define in relation to
  25     individual clinicians, the Trust where that service was

   1     located and the NHS Executive who, through these
   2     advisory groups, were running the national commissioning
   3     arrangements and allocating money.
   4   Q. Could we take also the alternative health authority: the
   5     region? Does that have any responsibility?
   6   A. Now you are testing my memory here, but I think the
   7     money was being allocated directly from the national
   8     group to the Trust concerned and to the service
   9     concerned, so that the regions were not, as they were in
  10     some other cases, in the resource allocation chain. And
  11     remember, through this period regional health
  12     authorities were fading out, but as part of the
  13     management oversight responsibilities of regional health
  14     authorities, it was quite common for senior people in
  15     a regional health authority to become involved in issues
  16     relating to the designation or the funding of
  17     a supra-regional service.
  18        I think I gave the example in my paper of a liver
  19     service being de-designated at the Royal Free Hospital.
  20     If I did not, that is an example that I remember. I am
  21     speaking from my perspective at that time in a Regional
  22     Health Authority. The region were quite actively
  23     involved in that, in discussing the problems of funding
  24     and the nature of the service with the people who were
  25     providing it, and there was at that time quite a lively

   1     system of regional medical advisory committees and all
   2     the rest of it.
   3        So whilst in your very tightly drawn example
   4     regions do not have a clear locus and are not part of
   5     the funding chain, I think in reality they would quite
   6     often adopt an influential position by virtue of their
   7     historical interest in the development of services and
   8     some expertise.
   9   Q. And does that again relate back to the wider
  10     responsibility of any Health Authority to ensure the
  11     health, to be concerned for the health of the
  12     inhabitants within its territory?
  13   A. I think it is more than that, actually. I think that
  14     Regional Health Authorities whilst separate statutory
  15     bodies during their existence until 1996, did have, if
  16     you like, a sense of responsibility in relation to the
  17     work of the Department of Health and a sense of
  18     responsibility in relation to the services that were
  19     provided on their patch. So I can remember very
  20     clearly, as a Regional General Manager, being in
  21     a region where there are a lot of big teaching
  22     hospitals, being quite closely involved in discussions
  23     about the development and the funding for supra-regional
  24     services in places like the Hammersmith Hospital and
  25     St Mary's and Charing Cross. It was quite normal for

   1     the regions to be involved, almost as agents of the
   2     Department of Health.
   3   Q. You mentioned then, when turning to the role of the
   4     Department of Health, its responsibility for putting
   5     a system in place to monitor or assess proper quality of
   6     care.
   7        Can I just take you to your witness statement
   8     again, page 18, please, where at paragraph 46 you start
   9     the description of this service, or service
  10     arrangements.
  11        If we turn over the page, we can see that the
  12     supra-regional services reported, after endorsement by
  13     regional Chairs, to the Secretary of State?
  14   A. Yes.
  15   Q. Are you able to help us on the reasons why the structure
  16     apparently fell outside and remained outside the sphere
  17     of the NHS ME or the NHS Executive until 1996?
  18   A. I cannot remember it offhand, but I think if you scroll
  19     up, you will find -- it is at the top of the page --
  20     references to the Supra Regional Services Advisory Group
  21     being set up with the support of the regional health
  22     authorities and the Joint Consultants Committee in 1983,
  23     it says on the previous page.
  24        The Health Service was a very different place in
  25     1983. The Department of Health was a very different

   1     place. It was not actively managing the Health Service
   2     in the way that it does now. The regional health
   3     authorities were statutory bodies. In some cases, they
   4     were very strong fiefdoms, and the regional Chairmen --
   5     and they were Chair men during that period in the
   6     main -- were pretty powerful and influential players.
   7     Although they only had part-time jobs, they were pretty
   8     influential advisers to the Secretary of State and it
   9     was quite normal, for example, not just in these areas
  10     we are discussing today, but in other areas, for
  11     regional Chairmen to have a lead role. I can remember,
  12     for example, a Regional Chairman having a lead role on
  13     handling the policy in relation to international
  14     relationships in the health service. I can remember
  15     Regional Chairmen having a very strong lead role in
  16     relation to NHS pay negotiations.
  17        So this was the way in which the Health Service
  18     was run. The Regional Chairmen were powerful players.
  19     They were each running their own fiefdoms.
  20        That began to change very dramatically through the
  21     1990s. The abolition of regional health authorities was
  22     a major issue and the notion to the people who had been
  23     around during the 1980s that we had had a regional
  24     director, Mr Spry and then Mr McKay running this very
  25     important committee, was a real kick in the teeth,

   1     really. It was signalling a very different world and
   2     a very different power structure. If you like, it was
   3     managerialism arriving at the centre of the NHS rather
   4     belatedly, in my view.
   5   Q. Do you think, then, that if one is looking at
   6     a committee or group that is not merely deciding whether
   7     or not a particular service should be designated, but
   8     also on the running of the management of that service
   9     throughout the years, that the omission from the loop,
  10     as it were, of the NHS Management Executive,
  11     subsequently Executive, until 1996, may have had any
  12     effect on the expertise available to that group, or its
  13     approach?
  14   A. There were two reasons for the omission. One is the
  15     reason I described, and you note there the change of
  16     chairmanship did not take place in 1996, it took place
  17     in 1994. If you go back to our earlier discussions
  18     about the document "Managing the New NHS", which was the
  19     precursor to the abolition of regional health
  20     authorities, the preparation for that took place between
  21     1994 and 1996. We had to be very careful not to
  22     pre-empt legislation, but changes in the structure were
  23     clearly being made at that time and that was the switch
  24     from Sir Michael Carlisle to Chris Spry in 1994. So
  25     that was a significant point.

   1        The other significant issue, which I think came
   2     out in Graham Hart's evidence, was that policy
   3     responsibility for this area of work did not rest with
   4     the NHS Executive until 1995. It was part of the
   5     residual responsibilities of what we refer to as the
   6     "wider Department of Health". So the two key changes
   7     were a regional director clearly in the loop and two in
   8     1991, and two in 1995, the responsibility for policy in
   9     this area transferring to the NHS Executive.
  10        You asked if that meant any difference in
  11     approach. The crucial difference it made was that the
  12     people who were responsible for policy and
  13     implementation were one and the same for the first time
  14     in history, so it was not a case of policy being handed
  15     down by the Department of Health to be implemented by
  16     the people managing the NHS. The people who were
  17     managing the NHS were informing the development of the
  18     policy, and I think that integration which results from
  19     the Bank's Review, mentioned in my statement, was
  20     a jolly good thing.
  21   Q. But at an earlier stage, looking pre-1994, as
  22     I understand your statement, the NHS Management
  23     Executive had no role, even for management issues,
  24     within the supra-regional services set up?
  25   A. That is correct.

   1   Q. So I think my question was --
   2   A. So, I am sorry, whilst Chris Spry was an NHS manager, at
   3     that time working in a Regional Health Authority and in
   4     the transition period between 1994 and 1996, soon to be
   5     part of the NHS Executive in its new form following the
   6     abolition of Regional Health Authorities, he was
   7     carrying out that chairmanship role on behalf of another
   8     part of the Department of Health who retained policy
   9     responsibility, I think, until probably the summer of
  10     1995.
  11   Q. But from 1991 onwards, in particular, until 1st April
  12     1994, which was when paediatric cardiac surgery was
  13     de-designated, the Supra Regional Services Advisory
  14     Group was, as I understand your statement, taking
  15     responsibility for managing this service in so far as
  16     they placed contracts directly with the units concerned,
  17     and yet appeared to be remote from the specific
  18     managerial expertise of the NHS ME as it then was?
  19   A. That is correct. That is not to say that -- I would not
  20     want that to imply that the people doing that work did
  21     not have expertise in their own right, and I would also
  22     want to make the important point that ultimately these
  23     people had a line of responsibility to the Secretary of
  24     State who was in overall charge.
  25        So it was not as if that activity was taking place

   1     in organisational space, but it is absolutely true to
   2     say that it was not taking place in the context of the
   3     developing central management arrangements for the NHS.
   4   Q. Do you think that that may have had or did have an
   5     effect on the competence, or the effectiveness with
   6     which systems were put in place to monitor or assess
   7     supra-regional services?
   8   A. It may have had, but I would not want to say that for
   9     certain. Again, partly because I do not even know them
  10     in the sense that I have not worked with them closely,
  11     I am reluctant to comment on the competence of
  12     individuals who I am sure at the time were doing their
  13     best, given the cards they had been dealt.
  14   Q. Are you familiar with the details of the contracts or
  15     the contractual mechanisms whereby services were run
  16     within supra-regional services?
  17   A. No.
  18   Q. Are you able to help us then with assessing whether or
  19     not a proper system had been put in place by the
  20     Department of Health to ensure the quality of care at
  21     a supra-regional service level?
  22   A. I do not think I can do that today with confidence.
  23     I do understand that there is a significant issue here,
  24     and indeed, an issue that is made more complex by the
  25     fact that although the service was de-designated in

   1     1994, it continued until 1st April 1996 to have
   2     nationally based funding.
   3        So in the period in the run-up to 1994 and in the
   4     period between 1994 and 1996, I do not think I can speak
   5     with absolute confidence about the systems that were in
   6     place, but I understand that that is an issue of
   7     potentially real concern to this Inquiry, and I would be
   8     happy to provide a more detailed note, if that would be
   9     helpful.
  10   Q. I think that would be extremely helpful, if you would,
  11     Sir Alan. Perhaps I might touch on another issue that
  12     you might like to consider, if not today, in such
  13     a statement. It is this: we have heard that when the
  14     service was de-designated, no guidance was offered to
  15     local district health authorities who had to place
  16     contracts with the units in question for the first time
  17     in 1994 and 1995?
  18   A. Yes.
  19   Q. And it may be that you would be able to help us on
  20     whether or not you think that was a significant failing
  21     or not a failing at all on the part of the Department of
  22     Health, and whether such guidance might perhaps usefully
  23     have been offered to such district health authorities.
  24   A. If no guidance was issued, I think that does fall into
  25     my category of systems failure, because I think taking

   1     on a new responsibility for which some people have
   2     expertise and others do not, there should be
   3     a responsibility in any managed system to ensure that
   4     that expertise and knowledge is passed on to those who
   5     subsequently have to do the work.
   6        In accepting that, I am not accepting that no
   7     guidance was issued, because I do not know, but I am
   8     happy to check and to deal with that point in the
   9     context of a further note.
  10   Q. We have heard at least from the District Health
  11     Authority that it was not aware of any such guidance, or
  12     did not receive any, so perhaps that might be clarified
  13     by yourself.
  14   A. All right, we will check that point.
  15   Q. The point that I think perhaps we would welcome your
  16     assistance on is that we have talked about information
  17     and balances and it might be thought that there would be
  18     difficulties in local authorities in taking over such
  19     a specialised service, and perhaps inevitably, that they
  20     took the approach that they did adopt, which was in
  21     adopting a "steady state" attitude, at least in the
  22     first year, the initial year of contracting?
  23   A. Again, I think we need to look at the precise
  24     arrangements. It was certainly the case in some issues
  25     like this that district health authorities taking on

   1     these sort of responsibilities for the first time pooled
   2     their expertise. In other words, they developed
   3     consortia arrangements; they did not seek to contract
   4     with specialist centres always in their own right; they
   5     often developed a little locus of expertise and then
   6     arranged a consortium or some sort of co-operative to
   7     work on, on their behalf so that they would pool their
   8     money, their expertise and ensure that the good practice
   9     required in these areas was followed through.
  10        That was certainly true in a number of other
  11     areas, and I cannot cite the detailed reference, but
  12     there certainly was guidance to that effect, that that
  13     would be a good way of doing certain things.
  14   Q. I am being reminded from behind me that the evidence was
  15     that the districts were told, were advised, to take
  16     a "steady as you go" approach in taking over
  17     responsibility for the funding of these arrangements.
  18   A. Yes.
  19   Q. Again, I think our evidence has been that that
  20     responsibility did start from 1994 onwards, rather than
  21     being delayed until 1996, as I think you just suggested?
  22   A. I do not think I suggested that the responsibility did
  23     not transfer until 1996. The point I made is that
  24     central funding was still in place until 1996, and it
  25     may be that the contracting responsibility was delegated

   1     and that the continuation of central funding was part of
   2     the process of ensuring stability.
   3        It was quite normal -- there is dreadful jargon
   4     around this, but a "steady state" I remember is one
   5     example of that. It was quite normal, in making
   6     a change like that, that for at least a year beyond the
   7     change, current arrangements, meaning current financial
   8     flows, were essentially maintained to ensure the
   9     stability of the service.
  10        I think it is also worth saying that many of these
  11     services, not necessarily this one, which I cannot talk
  12     about in detail, but many of these services had links to
  13     universities, sometimes to really rather important
  14     clinical trials, so the aim was not just to ensure
  15     a steady state in the flow of Health Service money; it
  16     was to ensure the continued viability of important
  17     research projects and all the rest of it.
  18        When I talked about intervening in the market, it
  19     was not unusual at that time to intervene to ensure
  20     stability for health services and for associated
  21     research and teaching programmes.
  22   Q. One small matter. Can I ask you, Sir Alan, who
  23     appointed the members of the Supra Regional Services
  24     Advisory Group?
  25   A. It must have been the Secretary of State.

   1   Q. Would that also apply to the National Specialist
   2     Commissioning Advisory Group?
   3   A. I would think so, yes.
   4   Q. If we go on, please, looking again at your statement and
   5     go on to paragraph 48, where you talk about the
   6     development of the National Specialist Commissioning
   7     Advisory Group, does that body now have at its disposal
   8     any powers or levers to control where specialist
   9     treatments are provided that were not available to the
  10     old group?
  11   A. I cannot think that it will have new powers. I think
  12     the development in that area -- we are back to our
  13     parallel developments again -- as in many other areas,
  14     would be the development of the audit and review
  15     processes, so that whereby in the past the aim would
  16     have been to draw on the expertise of the group members,
  17     the Royal Colleges and others in the way that the SRSAG
  18     did, now the attempt has been made to install audit
  19     systems and I think I refer to one of those later in the
  20     text here, where, in relation to cardiac surgery, there
  21     is an attempt, a very detailed attempt, being made to
  22     develop outcome audit by operation that is, if you like,
  23     so "risk-stratified", I think, is the terrible jargon --
  24   Q. That is paragraph 55 of your statement, if we look at
  25     page 21.

   1   A. That would be the advance that I would point to; the
   2     other of course being that by virtue of reporting back
   3     into the NHS executive, that is the new route to the
   4     Secretary of State.
   5   Q. Because again, we have heard a certain amount about the
   6     inability of the Department of Health ultimately to
   7     prevent centres from offering specialist services
   8     outside this structure if clinicians want to do so and
   9     referrals are being made to them.
  10   A. Yes.
  11   Q. Is that a situation which still exists now?
  12   A. I think it would be wrong to say it cannot exist, but
  13     I think the barriers to that happening are much greater
  14     now than they used to be. There have certainly been
  15     cases recently that I can think of where a proliferation
  16     of services for a particularly difficult clinical
  17     procedure was frowned upon to the extent that --
  18     following some public concern and some clinical concern,
  19     the pattern of that service was changed and was focused
  20     on --
  21   Q. I am thinking perhaps of the decision that the Kasai
  22     procedure --
  23   A. The biliary atresia, that is right.
  24   Q. The Kasai procedure for biliary atresia has now been
  25     restricted to three centres?

   1   A. That is correct, yes.
   2   Q. So presumably the levers, the use of the new group, are
   3     as they were for the old, that is, a combination of
   4     funding plus guidelines for local commissioners of
   5     services?
   6   A. I think that is right, and as I have said in
   7     paragraph 35, an increasing emphasis on audit, and
   8     I think not to underplay it, just an example we have
   9     touched on, a willingness to intervene, not to sit back
  10     and see how things go, but to deal with an issue that
  11     was clearly of concern to special interest groups of
  12     patients and parents, that clearly raised its head in
  13     the media. There was a clear willingness to intervene,
  14     to draw on the professional expertise on that issue, and
  15     to deal with that issue by confining the work to the
  16     three centres best placed to achieve good results.
  17   Q. You are saying that the Department of Health's attitude
  18     in that matter has altered?
  19   A. I think that is right.
  20   Q. Over what period of time?
  21   A. I think it has probably altered over the last few years,
  22     and I would not want to under-estimate the influence of
  23     this case in that respect, but I do not think that is
  24     the sole reason for the change. I think there is just
  25     much greater awareness of these issues.

   1        If I take a completely different example, even
   2     ahead of the work that is currently being carried out in
   3     the Department of Health on the national service
   4     frameworks, the NHS Executive took a very clear lead on
   5     behalf of the Secretary of State to develop a position
   6     on paediatric intensive care services a couple of years
   7     ago, where it set very clear national standards, where
   8     it developed clinical consensus on how these services
   9     should be organised, and was quite precise on what was
  10     required and is now managing that new approach into the
  11     system.
  12        So there is much more willingness (a) to intervene
  13     if things are thought to be going wrong; (b) to plan
  14     these things on the basis of good clinical evidence, not
  15     to be shy of setting national standards, and not to be
  16     shy of holding people to account for implementing change
  17     that allows us to meet these standards. That is
  18     a change in attitude.
  19   Q. So how was the agreement that the Kasai procedure, the
  20     treatment for primary biliary atresia would be carried
  21     out only in three centres, achieved?
  22   A. You will know that -- this is the version as I remember
  23     it, and maybe this needs to be checked, but as far as
  24     I remember it, when the issue was raised, the matter was
  25     taken up by Dr Peter Doyle, who will be giving evidence

   1     to this Inquiry before long.
   2        He was concerned enough to assemble people with
   3     clinical expertise in this area, the key players. I am
   4     sure he discussed it given his role with the NSCAG
   5     group. I certainly know the Chairman of that group,
   6     Neil McKay, and one of the chief medical officers was
   7     consulted along the way. He, given all that advice and
   8     guidance from senior officials and advice from clinical
   9     experts, recommended that the procedure be carried out
  10     in only three places: I think Kings, Leeds and
  11     Birmingham, if I remember. He made that recommendation
  12     to the Secretary of State. The Secretary of State
  13     agreed and that will be the position that operates as
  14     quickly as possible.
  15   Q. But is that a position which reflects medical consensus,
  16     such that you do not have a problem with clinicians
  17     disagreeing with it and saying that they wish to
  18     continue to operate?
  19   A. Well, it reflects medical consensus to the extent
  20     that -- I do not know the detail. I really do not know
  21     the detail; you would have to ask him direct, but there
  22     is enough consensus to allow this decision to be made
  23     without any medical objection being raised. I am much
  24     more confident in my territory in relation to paediatric
  25     intensive care where there was broad consensus but where

   1     some individual clinicians felt that their practice was
   2     being challenged unnecessarily, and essentially they
   3     were overridden by a national policy and a national
   4     change process.
   5        So "consensus" need not mean absolute consent from
   6     every individual who has ever been involved in that
   7     service; it means that the broad body of clinical
   8     opinion and expertise thinks there is a correct way to
   9     do things, or a better way to do things in terms of the
  10     desired outcomes.
  11   Q. In any event, if we want to pursue that example further,
  12     the correct person to ask would be Dr Peter Doyle;
  13     is that right?
  14   A. I think, yes. I do not want to complicate his life, but
  15     I am sure I have already done that. So, yes.
  16   Q. If we could go back, then, please, to page 14 of your
  17     witness statement, you talk there about adverse incident
  18     reports, and you set out there the government's policy.
  19     That, as I understand it, is a statement about the
  20     current government's policy and current position;
  21     is that right?
  22   A. Yes, although a lot of these elements have been