Annex A > Chapter 2 - A Historical Background to the NHS > 1974-1984

1974-1984

30 The reorganised structure did not meet with widespread approval. It was rapidly criticised for containing too many tiers of administrative decision-making; it was said that these led to bureaucracy and delays. [18] District management teams `tended to clash with their AHAs on matters of strategic direction.' [19] Administrative costs rose and staff morale suffered. Industrial unrest in the NHS increased. Against this background, a Royal Commission was established in 1976. [20] It was asked to consider `the best use and management of the financial and manpower resources of the National Health Services'. When it reported in 1979, it recommended that there should be only one level of administrative authority below the level of the regional health authority.

31 In December 1979 the DHSS and Welsh Office published a consultative paper entitled `Patients First'. [21] This proposed a strengthening of management at a local level, with greater delegation of responsibility to hospital and community levels; and removing the area tier and establishing district health authorities to combine the functions of areas and the existing districts. The professional advisory machinery and the planning system would also be simplified, to ensure that voices were better heard within regional and other health authorities.

32 These discussions resulted in the Health Services Act 1980 (1980 Act). The 1980 Act prepared the way for disbanding the AHAs and enabled the creation of 192 new district health authorities (DHAs) in England. [22] These DHAs came into operation on 1 April 1982. In many parts of the country, the correspondence between the boundaries of health authorities' areas of responsibility, and those of the local authorities, was however lost. Within districts, an emphasis was placed upon devolving management down to smaller units of management. These might be hospital or service based; there was considerable local variation.

33 FPCs were given an independent status as employing authorities as a result of changes announced in November 1981. [23]

34 The changes made in the structure of the NHS may be seen in Table 3.

Table 3: The structure of the NHS, 1982-91 [24]

35 The main responsibility of Special health authorities (SHAs) was to run postgraduate teaching hospitals in London.

36 Slightly different arrangements were made in Wales. In respect of Wales, `Patients First' noted that there was already only one tier of health authorities below the Welsh Office. These AHAs had the advantage of boundaries that were fully coterminous with county councils, but they were comparable in population and resources to the DHAs proposed for England. Stability was therefore possible. A review by areas of their district sub-structures was however proposed, with a view to eliminating formal district structures whilst remaining sensitive to the needs of local communities and to the need to delegate decision-making, so far as possible, to the level at which patient services were provided. [25]

37 In the South West, the Avon Area Health Authority (Teaching) was abolished on 1 April 1982 and replaced by the Bristol & Weston District Health Authority (B&WDHA). The B&WDHA consisted of the former Bristol Health District (Teaching) and Weston Health District (which had merged in 1978). The B&WDHA formed one of 11 DHAs under the SWRHA. Others included Frenchay DHA and Southmead DHA. [26]

38 The attempts to increase delegation to the periphery and to decrease central prescription that may be seen in the 1982 reforms did not endure. [27] Rather, central scrutiny and direction intensified, as Ministers sought to wrest greater efficiency or higher outputs from the NHS. In 1982, a system of annual performance reviews was launched. Ministers held meetings with regional Chairs, to set and then monitor progress towards targets. The regional Chairs in turn held similar meetings with the districts within their constituencies, setting up a chain of review.

39 During the financial year 1981/82 area health authorities were required to make efficiency savings in order to generate funds for new developments. Subsequently, in 1984, the efficiency savings programmes were renamed `Cost Improvement Programmes'. It was calculated that the administrative costs of the service fell, as a result of the reduction in the number of management tiers effected by the 1982 reorganisation.

40 From 1982 NHS managers carried out a series of cost-effectiveness scrutinies into issues such as transport services and residential accommodation. They were modelled on the studies carried out by the retailer Sir Derek Rayner into the Civil Service. In August 1982 a review of NHS audit arrangements was announced.

41 In September 1983 the first set of performance indicators was published. These included information about clinical services, finance, manpower and estate management. The purpose of their development was to allow health authorities to compare performance with other health authorities. The performance indicators were criticised for various reasons. Some of the criticism centred on the fact that they contained data about activity or outputs but not outcome; presentation was late; there were doubts as to their accuracy; and they were unable to measure quality. [28]

42 In September 1983 the DHAs were required to invite tenders from in-house staff and outside contractors in order to test the cost-effectiveness of their own catering, domestic and laundry services.

43 In 1983 the Griffiths Report was published. [29] It found the lack of a clearly defined general management function to be a weakness in the NHS. At each level of management, no one person was accountable for action. It recommended that all levels within the NHS should operate under the control of a single general manager or chief executive. The report sought to introduce a new management culture into the NHS and thereby give managers more prominence. Hospital doctors should be involved in this: such clinicians should accept that with clinical freedom came a management responsibility. Further, according to Klein:

`One of the report's central arguments was that the management task revolved around delivering a good product to the consumer: "Businessmen have a keen sense of how they are looking after their customers. Whether the NHS is meeting the needs of the patient and the community, and can prove that it is doing so, is open to question." Thus Griffiths put two new questions on the NHS agenda, which became increasingly salient over the following decade. First, was the NHS producing the right kind of goods? Second, was the quality of the goods being produced adequate?' [30]

44 The report also recommended the establishment of a Health Services Supervisory Board, to determine policy and objectives, and an NHS Management Board, to perform an executive role. The regional and district Chairs were to ensure that the process of securing accountability and review extended through to unit level.

45 In June 1984 the circular `Implementation of the NHS Management Inquiry' [31] authorised the adoption of these recommendations and required DHAs and units to appoint a general manager. In Bristol, Dr John Roylance was appointed District General Manager of the B&WDHA in January 1985. He was instructed to produce a management structure for the B&WDHA by 30 April 1985. B&WDHA approved this in May 1985. [32]

<< previous | next >> | back to top

Footnotes

[18] The Royal Commission (see footnote 20) summed up the criticisms as (a) too many tiers; (b) too many administrators, in all disciplines; (c) failure to take quick decisions; and (d) money wasted

[19] Levitt R, Wall A, Appleby J. `The Reorganised National Health Service' (6th edition, 1999), Stanley Thornes (Publishers) Ltd

[20] Royal Commission on the National Health Service, `Report of the Royal Commission' (1979), London: HMSO (Cmnd 7615)

[21] DHSS and Welsh Office, `Patients First' (1979), London: HMSO

[22] Changes followed a review of local arrangements by the regional health authorities

[23] The changes were made in the Health and Social Security Act 1984. They were effective from 1 April 1985

[24] Ham C. `Health Policy in Britain' (4th edition, 1999), Macmillan Limited. Illustration reproduced with the kind permission of Macmillan Limited

[25] DHSS and Welsh Office, `Patients First' (1979), London: HMSO

[26] WIT 0038 0005 Ms Charlwood

[27] Klein, R. `The New Politics of the National Health Service', p. 143 (3rd edition, 1995), Longman

[28] See also WIT 0038 0006 Ms Charlwood, which notes that the DoH subsequently shifted emphasis from performance indicators to health service indicators, `which were more concerned with helping HAs to plan and monitor the delivery of services'

[29] `The NHS Management Inquiry' (October 1983), London: DHSS; HOME 0003 0001. See also Chapter 4

[30] Klein, R. `The New Politics of the National Health Service', p. 151 (3rd edition, 1995), Longman

[31] `Health Services Management: the Implementation of the NHS Management Inquiry', Circular HC 84(13), London: DHSS

[32] WIT 0038 0009 Ms Charlwood