NHS White Paper – what does it mean for HR?

The Government’s White Paper, Equity and Excellence: Liberating the NHS, proposes a radical shake-up of the NHS in England.

Under the plans, primary care trusts (PCTs) and strategic health authorities (SHAs) will be scrapped, GPs will be handed responsibility for commissioning care for their local communities, and hospitals will be set free from central control.

The aim is to release up to £20 billion of efficiency savings by 2014, which the Department of Health (DH) says will be reinvested in the health service to support improvements.







Key dates in NHS shake-up



  • End of Sept 2010: all staff affected to have had a discussion with their line manager
  • 2011/12: GP consortia established in shadow form
  • 2012: Formal establishment of GP consortia
  • 2012/13: SHAs abolished
  • April 2013: PCTs abolished
  • End of 2014: NHS management costs reduced by over 45%

Source: NHS Employers.

Plans to reduce management costs by more than 45% over the next four years are also outlined, along with proposals to cut the number of NHS bodies and quangos. The NHS will also employ fewer staff by 2014 – although the White Paper states that frontline staff will be protected.

A consultation period now ensues, but draft legislation is expected to be laid before Parliament in the autumn. Critics argue that GPs may lack the skills to commission services, while others fear that the cost of redundancies could spiral into hundreds of thousands of pounds – a Sunday Telegraph investigation found that most of England’s SHA chief executives are in line for redundancy payments worth about £340,000 if no job can be found for them in the new structure.

A DH spokesman said the precise cost of the shake-up would not be known until the new organisations had been designed in more detail. He said:


“We know that in the current climate it is inevitable that there will be reductions in the size of the workforce – this would be the case even if we did not bring forward any reforms. These reforms are about trying to make sure that we reduce unnecessary management and administrative functions to protect the jobs of nurses and doctors wherever possible.”

Given the looming workforce changes, HR professionals now have a mammoth task on their hands, both in terms of managing the reorganisation but also in mapping out their own future. The following quotes give experts’ thoughts on the challenges ahead:

Judith Smith, head of policy, The Nuffield Trust:


“As with any major re-organisation, there is a real risk of losing scarce and valuable managerial talent, and the organisational memory that goes with that. Whilst some managers will inevitably migrate to the new NHS Commissioning Board and GP consortia, others will jump ship and be lost to the service. We know from experience there is a struggle to secure sufficient, high calibre commissioning expertise in the NHS. GP consortia will face the same challenge as PCTs before them in trying to recruit sufficient experienced senior commissioning managers and analysts.”

Jean Sapeta, partner at law firm Hempsons:


“There’s going to be a lot of pressure on the HR function because of the volume of work – consulting with employee reps about TUPE and individual employees about personal situations. [NHS chief executive] David Nicholson has sent out an edict that he wants everybody to have a conversation [with their line managers about how they will be affected] by September. That’s quite a challenge: What can you say to somebody if you don’t know what’s going to happen?

“I can only look back to when [the Government] last reformed PCTs – there was a lot of disengagement, managers were openly saying they weren’t undertaking some of the more difficult projects because they didn’t know if they would be in post. The temptation was to leave the ‘too difficult’ pile for someone else to sort out.

“On TUPE, it’s not clear. We don’t know how the GP consortia are going to operate. GPs may well relish the opportunity to revisit the commissioning function.”

Mike Bourne, professor of business performance, Cranfield School of Management:


“Commissioning skills at PCT level are senior jobs. The jobs in the local GP practices will not be at that level, so I believe there will be a lack of skill and experience unless those qualified downsize their jobs and ambitions significantly.”

Karen Jennings, head of health, Unison:


“If the NHS is to be more efficient it needs to have stability. People in fear of their jobs, or how they are going to be able to deliver services cannot be expected to make informed or rational decisions.”

Shaun Tyson, emeritus professor of HR management, Cranfield School of Management:


“If [HR professionals] are threatened by a PCT or SHA closure, they might well not be looking at a long-term career. That throws up all sorts of challenges. It’s difficult to maintain motivation if you know your own job is not there. If they have spent their whole life in the NHS they won’t necessarily be seen by private sector employers as being ideal unless they can offer something highly relevant.”

Gill Bellord, director for core services, NHS Employers:



“There are regulations that determine when TUPE may be applied to the transfer of staff, however, it remains to be seen how these rules will be applied to the new emerging business arrangements. It is not yet known whether, for example, PCT staff who move to GP consortia will retain the conditions of their employment contracts.”









Key areas for NHS employers


Efficiency

Savings of up to £20 billion, which includes a 45% reduction in management costs.

Staffing

The abolition of SHAs and PCTs will lead to redundancies. The scale of job losses is hard to estimate, but the proposals state that frontline staff will be protected. Transfer of the commissioning role to GP consortia will have a major impact on staff employed in commissioning roles in PCTs.

Employee-led organisations

The foundation trust model will be reviewed with a view to developing more “employee-led” organisations. This shift in policy is likely to mean more transfers of existing staff to non-NHS providers and more diversity of employers in the NHS.

Engagement

Every member of staff in an SHA or PCT should have the opportunity for a discussion with their line manager on the changes and how they may affect them as they develop.

Pay

The NHS is included in a two-year public sector pay freeze from 2011-12. Pay review bodies will be asked to make recommendations for staff earning less than £21,000. The Government wants local employers to lead negotiations for any new employment contracts. It is not yet clear how this model will run alongside the national pay machinery.

Pensions

The Government will consider the findings of an independent review of public pensions, chaired by Lord Hutton, later this year. However, the White Paper outlines a commitment to ensuring that pension solutions are found that are fair to the workforce in the health service and fair to the taxpayer.

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