NHS Chief Executive Sir David Nicholson has warned that the Government’s controversial health service reforms may end in “misery and failure”.

Sir David said that politically driven changes to any public sector body usually ends in disaster.

Speaking to doctors at the Royal College of General Practitioners conference, Nicholson said that “carpet bombing” the health service with private sector competition was not the right way to tackle rising costs.

The NHS’ leader said that the reforms would benefit patients by offering them increased choice and improved standards of care through competition. But he added that GPs would only benefit from the reforms if they are free from negotiating new services.

“If we are creating a system where general practitioners feel it is their job to do all that, then I think we have a massive problem,” he told delegates. “We need to create the right kind of people with the right kind of skills, which we are trying to do at the moment through commissioning support, to enable people to focus their attention on clinical decision-making.

“My advice to anyone – and I have been involved in the last five or six years with the national programme for IT, and I have, as they say, the scars on the back around all of that – is that big, high-profile, politically driven objectives and changes like this almost always end in misery and failure.”

Shadow Health Secretary Andy Burnham said Nicholson’s comments were a concern. “David Nicholson is a man who has the NHS at heart, so it is worrying to hear him talk in these terms,” he said. “He has put on a brave face in public, but clearly has private concerns about the real damage this reorganisation is doing.

“His open acknowledgment of the possibility of it ending in failure will send shock waves through the NHS and provide a stark illustration of the sheer scale of the gamble the Government is taking.”

Hospitals across England are struggling to deal with real term cuts in funding imposed by the Government as part of its efficiency savings, the NHS’ economic regulator has warned.

Trusts across England are forecasting cuts of more than 8% over the next three years as the Government attempts to meet its target of saving £20bn by 2015.

But following a review of trusts’ three year plans Monitor said that hospitals need to make “significant changes” beyond efficiency savings to remain financially sustainable.

The review found that hospitals may be forced to reduce services in an attempt to meet financial targets – despite being tasked with treating the same amount of patients.

Hospitals across England have started to reduce their cost base by an estimated £7bn to meet Government targets. However, Monitor expects trusts with hospitals built using private finance initiatives and small general hospitals to suffer the most when aiming to cut costs.

Andy Burnham, Labour’s Shadow Health Secretary, accused the Government of making a “major mistake” in imposing harsh savings targets instead of finding cost-savings efficiencies.

“Eyes were taken off the ball just when the NHS needed its full focus on the money and this report suggests the NHS has failed to get ahead of the problem,” he said.

“Senior civil servants complain of how hard they have found it to get the Secretary of State on the seriousness of the financial challenge – a damning indictment of his time in office. This failure to plan is resulting in an increasingly crude approach to reducing costs and panic measures. Ministers are in danger of losing control of NHS finances and urgently need to get a grip.”

The King’s Fund anticipates that the outlook for hospital finances are bleak over the course of the next three years but is unsure how the cuts will affect standards of care. “The question is to what extent that will translate into a cut in quality or in the amount of care hospitals provide,” said Professor John Appleby, Chief Economist at the King’s Fund

What priorities does Andrew Lansley’s draft mandate for the NHS Commissioning Board reveal?

The draft mandate for the NHS Commissioning Board (NHSCB), published on 5 July 2012, is a manifesto for the new NHS: the first clear public statement of the anticipated course of NHS reform since the Health and Social Care Act became law. It offers a snapshot of the emerging structure for local commissioning, and highlights the Government’s key priorities for an NHS reform that is now a reality.

Introducing Our NHS Care Objectives: A Draft Mandate to the NHS Commissioning Board to Parliament, Health Secretary Andrew Lansley said: “Today we will be laying the foundations of the new, more independent NHS.” By this, he explained, he meant an NHS “free from constant political interference” and “tasked with continuously improving the care that patients receive”.

Transfer of powers
A key background document to the draft mandate is Lansley’s letter to the new Chair of the NHS Commissioning Board Authority, Malcolm Grant, in April. The letter stated his primary objective as being
“to design the Board so it transfers power to local organisations”. Other priorities included integrating health and social care and promoting patient choice.

Another important background document is the NHS Outcomes Framework, published in December 2010 and updated a year later. This defines the patient outcomes the NHS has to work towards – a counterpart to the business processes defined by the reform agenda.

The draft mandate has been issued for consultation. The final NHSCB mandate will be published in October and will guide the Board when it assumes its full statutory authority in April 2013.

Improving healthcare outcomes
The draft mandate begins by setting the context: the NHS is facing “one of the tightest funding settlements in its history”, while elderly care, long-term conditions and mental health are growing priorities. It outlines 22 objectives for the NHSCB for the two years from April 2013, as well as ‘ambitions’ for the coming decade.

The first major section lists 11 objectives for improving outcomes. The first six relate to the NHS Outcomes Framework – one for each of the five domains and one for the whole – setting concrete targets in QALY and similar terms, but leaving the actual numbers to the final version.

While there are no objectives for specific conditions, this section refers to dementia and mental illness and notes the need for better integration of general healthcare with treatment of these conditions. The NHS should work towards treating mental health as “on a par with physical health,” it states. There are objectives for reducing health inequalities, including life expectancy at birth. However, the reference to “greater improvement in more disadvantaged communities” should be seen in the context of the planned shift of public health funding from the NHS to local government. Finally, there are objectives relating to service performance standards and support for patient self-care.

Patient choice and local control
While the first 11 outcomes are related to the agenda for NHS improvement defined by Lord Darzi in 2008, the last 11 belong wholly to the new reform agenda. One crucial objective relates to patient choice. The Board must ensure that people are “involved in decisions about their care and treatment”; that personal health budgets are available “to anyone who might benefit”; and that a patient who has waited 18 weeks for treatment is entitled to choose another provider.

The Board is required to develop integrated care through joint commissioning and other methods, particularly for “people with dementia or other complex long-term needs”. It should also improve the quality of NHS information, using IT to make the NHS “transparent” to patients and carers.

The Government’s innovation agenda is highlighted by an objective requiring the Board to “promote access to clinically appropriate drugs and technologies recommended by NICE”, as well as supporting the participation of NHS clinicians and patients in life science research.

The section on commissioning states that the Board should fully authorise “as many CCGs as are willing and able” by April 2013, and allow the CCGs “full control over where they source their commissioning support”. The new clinical senates and networks will provide advice, with CCGs “free to make their own arrangements”.

The Board must have a “transparent, principle-based system” for managing “poor performance” or “financial risk” by CCGs. It must “support a fair playing field between providers” and “ensure that financial incentives for commissioners and providers support better outcomes and value for money”. The latter objective includes the controversial Quality Premium, a bonus payment rewarding CCGs who achieve a surplus on their annual budget. This will be funded from within “the overall administration costs” available to CCGs.

Crucially for industry, there is an objective to support “changes in services that lead to improved outcomes for patients”. These must meet four criteria: support from clinical commissioners; strong patient engagement; a clear clinical evidence base; and consistency with patient choice.

On the critical issue of cost savings, the mandate says only that the Board must ensure that QIPP savings are made “in a sustainable manner” as dictated by the Treasury, but without reducing service quality.

Between the lines
Responses to the draft mandate have focused on its open-ended nature. Mike Farrar, Chief Executive of the NHS Confederation, commented: “Unlike documents that have gone before it, the mandate does not seek to develop an ever-growing ‘wish list’ of objectives. It rightly encourages commissioners to exercise their knowledge of the needs of their local communities to plan and deliver the best care.”

Shadow Health Secretary Andy Burnham argued that Lansley had missed an important opportunity to highlight the issue of healthcare rationing – which the Health Secretary had recently stated to be
“unacceptable”. The delegation of control to local commissioners, Burnham argued, was “a mandate for privatisation.”

Dr Richard Vautrey, Deputy Chairman of the BMA’s GP Committee, praised the mandate for not placing too many restrictions on GP-led commissioning. However, he was strongly critical of the Quality Premium, which he claimed would encourage rationing and increase health inequalities.

Whatever the consultation period delivers, the draft mandate for the NHSCB is a clear statement of the NHS reform agenda: to deliver improved patient outcomes through CCG autonomy and provider competition.

Labour plans to scrap the Government’s controversial NHS reforms if they win the next general election, Shadow Health Secretary Andy Burnham (pictured) has said.

Speaking in Parliament during a debate opposing the reforms, Mr Burnham insisted the changes open the door to privatisation within the NHS and undermine the health service in general.

He said that Labour will “repeal the bill” if elected claiming it to be a “defective, sub-optimal piece of legislation” that has left the NHS with a “complicated mess”.

The Shadow Health Secretary added that it would be “irresponsible” to leave the Health Act in place if Labour were elected and added that the “gap between ministers’ complacent statements and people’s real experience of the NHS gets wider every week”.

“They are in denial about the effects of their reorganisation in the real world, it is dangerous complacency and it can’t be allowed to continue.”

Health Minister Simon Burns countered Mr Burnham’s claims by reminding the Leigh MP that Labour leader Ed Miliband had previously said he would keep clinical commissioning in place if elected as prime minister.

But the former Health Secretary insisted “it’s not about the organisations, it’s about the services they provide”.

“The existing organisations can be asked to work differently, as I would ask them to work differently,” he said.

“I don’t want those NHS organisations in outright competition, hospital versus hospital. I want them working collaboratively.”

Critics have claimed that private healthcare firm Circle is putting profits before patients after documents showed it will received at least the first £2 million Hinchingbrooke Hospital makes annually.

A contract obtained by HSJ shows Circle will receive an initial two million pounds as well as more than half of the trust’s annual profits, unless this exceeds £6 million.

Christina McAnea, Head of Health at UNISON, called the agreement a “disgrace” and said patients and staff will “pay the price” for such a deal.

Circle began its ten-year contract in February 2012 and became the first private company to manage an NHS hospital and its full range of services.

Hinchingbrooke Hospital in Cambridgeshire has debts of around £40m. At the time of the deal, Circle said it would invest millions of pounds into the hospital in an attempt to clear the debts.

When the deal was announced, Circle Chief Executive Ali Parsa likened management of the hospital to the John Lewis chain.

Management at the hospital claim it has already made substantial improvements and transformed its A&E department from one of the worst in the region to one of the best.

However, Shadow Health Secretary Andy Burham aired concerns about the terms of the contract. He commented: “The structure of this deal holds worrying implications for the future of the NHS. It gives Circle a financial incentive to make eye-watering cuts.”

A spokesperson for the Department of Health said the deal has preserved this “valued local service – had it not been agreed, the hospital may have had to close.”

Campaigners against privatisation of the NHS have said the money earned by Circle should’ve been reinvested into improving services or treatments, or reducing the debt.

The Government looks set to have won its battle over the Health and Social Care Bill after the last attempt to halt the legislation failed in the House of Commons.

An emergency debate by Labour to block the changes to the Bill until a risk register was published was defeated by 328 votes to 246.

Andy Burnham, Shadow Health Secretary – who pushed for the risk register to be published – said that the general public would “struggle to understand” how MPs had made “such momentous decisions” without considering all of the evidence on the reforms.

Final amendments to the controversial reforms were approved by MPs paving the way for Royal Assent for the Bill before the break for Easter next week.

Peers in the House of Lords approved the Bill on Monday evening.

The changes to the structure of the NHS will see Strategic Health Authorities and Primary Care Trusts abolished in favour of local Clinical Commissioning Groups. The move, which will see GPs given budgetary responsibilities and the opportunity to outsource services privately, has been widely opposed.

Mr Burnham admitted that the legislation becoming law was inevitable and the only hope left to defeat the Government’s plans would be a “change of heart” from the Lib Dems.

“We have given this fight everything that we had,” he said. “All I can say is our fight will go on to protect and restore this party’s finest achievement.”

The Royal College of Nursing (RCN) and the Royal College of Midwives (RCM) have expressed their complete opposition to the Health and Social Care Bill and called for it to be removed.

The unions were initially willing to work with ministers over the controversial reforms. But, after witnessing the effect the changes are having within the NHS, they now insist it should be scrapped.

Peter Carter, General Secretary of the RCN, said the “turmoil of proceeding” with the reforms is greater than the “turmoil of stopping them”.

The Bill is currently in the House of Lords. However, changes are already being made within the health service. The switch to clinical commissioning is well under way with pilot plans in place in 97% of the country.

The reforms would see Clinical Commissioning Groups being given a large percentage of the NHS budget to spend on local services. These could come either from within the health service or via private providers of care. The reforms, which have also been opposed by the BMA, would see PCTs and SHAs abolished by 2013.

The Government accepted a number of recommendations from its NHS Future Forum last month and in June last year after healthcare professionals were consulted after a ‘listening exercise’.

Health Secretary Andrew Lansley says the latest setback to his plans to modernise NHS are not fundamentally about the reforms but about “pay and pensions”.

Speaking to BBC Breakfast he said: “The only thing that has happened in the last few weeks that has led to this situation with the Royal College of Nursing, is that the two sides of the Royal College of Nursing have shifted.

“They used to be a professional association that was working with us on professional issues, and will carry on doing that, but now the trade union aspect of the Royal College of Nursing has come to the fore. They want to have a go at the Government.”

The Department of Health insist the Bill will “empower doctors, nurses and other front-line healthcare workers across the NHS to take charge of improving care”. It says, despite the opposition, it will continue working with nurses and midwives to ensure the health services delivers the best possible care for patients.

Yet Cathy Warwick from the RCM said the Government had failed to “present sufficient evidence” that the reforms were necessary and that the “upheaval” will improve services.

Andy Burnham, Shadow Health Secretary, said it was now time to withdraw the Bill after the BMA, RCN and RCM all oppose its progression. “A reorganisation on this scale needs a professional consensus for it to succeed,” he said. “A year since the bill was introduced, it is abundantly clear that the Government’s plans do have failed to build that.”

Click here to view Peter Carter’s full statement.

The top-down reorganisation of the NHS is David Cameron’s “biggest single mistake” during his time in office, Shadow Health Secretary Andy Burnham (pictured) has said.

Mr Burnham claims the decision to combine the challenge to make £20bn of efficiency savings at a time of the biggest reorganisation in the history of the NHS is a “catastrophic error of judgment” by the Coalition Government.

Bringing a day motion on the coalition’s record on the health service, he accused the Prime Minister of breaking promises to push through the Health Bill and using pre-election statements to “help the Conservatives win votes in marginal seats”.

“People will remember only too well, running up to the general election, the then leader of the opposition’s ostentatious shows of affection for the NHS,” said the MP for Leigh. “His airbrushed face on the posters and three very personal promises: real terms increases in every year in this Parliament; no A&E and maternity closures; no top-down re-organisation of the NHS.

“He protested his love for the NHS, and at photocall after photocall on the wards, routinely wore his heart on his sleeve. He was protesting a little too much and today we expose the hollowness of his promises.”

The Shadow Health Secretary added that if Mr Cameron continues with the Health Bill he will “ultimately pay a heavy price for it”. When speaking about his counterpart Andrew Lansley, Mr Burnham also claimed that the controversial Bill was “unravelling before his eyes” and that the health policy introduced by the Government was currently in a chaotic state.