Chris Hopson: Sustainability and transformation plans

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  • Posted:Thursday 17 November 2016

Chris Hopson, Chief Executive of NHS Providers, shares reflections on the progress made so far in developing sustainability and transformation plans.

This presentation was filmed at our conference, Sustainability and transformation plans: from planning to implementation, on 17 November 2016.


Hello my name is Chris Hopson, I think as many of you know, I am the chief executive of NHS Providers. We are the membership organisation and the trade association for the 238 acute community mental health and ambulance trusts.  So I’ll just give you a short set of reflections from how we think on the provider sector representative side the STP process is going.

Let me just start by giving you a sense of how we think from NHS providers, the process is going. What I’ve done is, I’ve done a score card, an emerging score card of how we think the STP process is going.  So I’ll be very interested to see whether our panel agree with this or not.

So just to place all of this in context, our view is we think this is a very important process. We believe, certainly when we talk to our members on the front line, what they’re saying to us is it’s stimulating much needed new conversations and relationship and I think as you all know there are some places where conversations probably ought to have been happening but perhaps haven’t been happening and are now happening.

One of the things that I think really comes across to us which I find very interesting, is in a sense people are saying don’t talk about STPs for a second, actually what we’re finding is that those collaborations and those conversations are actually helping us to solve some immediate and some more mid-term problems. So, I’ve got this operational problem next week, I’m not in an STP area with two other neighbouring DGH’s that maybe I’ve never really had a big relationship with and now actually we are all collaborating in a more effective way to solve some of those immediate problems.

I think a general view across STPs that this is an important opportunity for system wide discussions, genuinely on how to transform and head towards greater sustainability longer term. I think I would make the observation when I talk to people about, well how’s the STP process going on, and how are you plans coming together, our view is what we hear is a relatively small number of people saying “we think we’ve got a really good plan” and it really is a relatively small number.  And the interesting thing, that we believe underpins all of those is that actually the common characteristic is it tends to be in places that have got long well-established relationships.  So in other words, it tends to be for example, you know, the Dorset’s, the Manchester’s who have been really going at this for really quite a long time.

I think the other important thing to say is, if you’re Simon Stevens, you clearly wanted this process to have an impact and my kind of sense is that genuinely again when we talk to people, our sense is that local systems know they have to make this process work and they are investing significant time, energy and effort into it. So I think we all know of that kind of bit where there’s a bit of a tick box exercise and kind of people don’t really engage with it, our kind of sense is that actually people think this is an important process and they are investing time, energy and effort into it.

So on a score card, you have some positives. Please note you don’t have negatives, you have risks to manage.  So the first one for example, I think our view would be that many, especially those start from scratch footprints, are taking time to build relationships and they are taking time to get to big issues, so the last guys I talked to about a couple of weeks ago were saying “actually we are sitting round the table for the first time, we’ve had some good conversations but to be honest we still haven’t really got to the big issues there, that’s going to take more trust”.  So I think what the message we’ve been consistently feeding back to the system leaders running this process is that we believe that October timeline is unrealistic and more time is needed.

I think the second risk is, and I wanted to really explore this in a bit more detail, is that effectively I think our nervousness is that we are in danger of becoming mesmerised by one potentially inaccurate description of the 2020/2021 financial problem and I have a dedicated slide to this, which is one of those ones that builds.

So effectively, here is the 2021 money problem and money gap, and our view is that we think there are two different ways of describing this. One way effectively starts from today and the other way is you start from a 2021 gap and work back, and our observation would be one way you could describe it is “look guys if you look at the CCG allocations for the next three or four years, they effectively are gonna only go up by 2% and we know there’s likely to be a 4% annual demand and cost increase”.  So there is a gap there each year, so effectively the question that you’re asking, if you ask the question that way is “how do you cope with that gap?”.

Now our argument would be that if you asked the question in that way, I think there’s a sense of it might look possible, it certainly feels realistic and it seems to us where that kind of tends to point you towards is perhaps more on demand avoidance and efficiencies. They probably looked, because you’re starting from the left today, and looking forward, it may not encourage you to perhaps look at radical transformation.  Our view is that we’ve potentially got ourselves into a pickle by looking at it in the other way and this is what we think has happened, which effectively is, we’ve monetised, we’ve turned into a financial figure that 4% demand and cost growth to 2020/2021 and you will all be familiar with that £30 billion figure in the five year forward view, so what we’ve done effectively is to chop that £30 billion figure up between the 44 STP footprints and effectively said to each STP footprint here is your 2020/21 financial gap and you’ve got to effectively, working backwards, work out how you’re going to fill it.

One of the observations that a number of our provider chief executives have been making is that actually that gap may not be accurate and I think more importantly potentially, in most STP areas that looks like a scarily large gap. So we know for example that in one of the biggest STPs, so we’re talking about West Yorkshire which covers a population base of over 2 million, they have a £billion gap by 2021 to cover, most of the STP gaps look like that in that 300 to 900 million range.

Our view is that if you say to people whatever happens you have to hit that financial gap, our sense is that there’s a danger that that induces and indeed has in many cases, induced somewhat of a sense of panic and that therefore if you tell that you have to balance to that figure, there’s a real sense that people are reaching for, in our view, potentially over ambitious and unrealistic large cost reduction programmes, projects. So if you ask us what we think what are the key features of many of the STPs is, they are coming up with some very, very ambitious service reconfiguration plans that appear to be seeking to realise very large amounts of cost savings but it seems to us that in many cases there will be neither the capital nor the political capital to actually approve them.  But our view is that they partly reach that because they’ve been driven into that as the only solution to balance bottom right by describing that 2021 money problem and money gap in a particular way, where if you look at it from the way its described on the left, we think actually you come to this slightly different set of conclusions.

Now it’s not a hypothesis that we’ve particularly tested but certainly when we’ve talked to people, there is an emerging sense that we may have actually talked ourselves into a wrong way of looking at things, where actually if you looked at it in a different way, you might come up with a different answer.

So there is a real question fair bit down, of is it better to try and leap to balance to a potentially wrong bottom right hand 2021 financial figure or is it better to set out how far you can realistically get in terms of doing some things without leaping for service reconfiguration and build from there. And just to make that point, in some plans, we think, there is a potentially worrying over reliance on service reconfigurations a silver bullet, and I’ve talked about the capital and political constraints, but I did want to make the point, it’s very clear to us there are some STP plans where it really does make sense to do some reconfiguration.  We know there have been a number of places that have been wanting to reconfigure for some time.  It seems to us the rather interesting question is “How do you distinguish between a rather over ambitious leap for something that’s never going to be delivered versus actually what’s a sensible thing to do and that we should all give our support to”.  And my observation would be that we don’t seem to be able to particularly tell the difference between the two at the moment, and that’s something that I think we really do need to look at properly.

The other set of risks I think we feel need to be managed, is we do think there is a bit of an unclear purpose about these things. So we think, as ever with an NHS planning process, they’ve been asked to do lots of different potentially conflicting things. So the way it was described at the beginning was, this is the chance for your local system to come together and to basically discuss the big strategic issues and for you to come together with your partners that you’ve probably never really talked to before and really work out how do you kind of go for transformation, how do you get to long term sustainability.  That, it seems to us, a perfectly legitimate and sensible aim and that’s the one we would particularly support.

We seem to then relatively quickly, get into a hey this is all about you’ve got to tell us how you’re going to balance to that very aggressive 2021 figure which turns it much more into a financial plan and much less a debate about how do we get to transformation and long term sustainability. In some cases it’s been even more granular than that in terms of people saying well you really need to set out very clearly, how you’re going to make your money work in 2017, 2019 and in other cases its effectively been play the usual NHS planning process which is everybody at the centre who has got a particular priority, let’s hang our bauble on the Christmas tree and then effectively you’ve got to tell us, here are fifty different priorities please tell us how you’re going to deliver absolutely every one, how are you going to deliver cancer stuff, how you’re going to deliver the mental health stuff, how you’re going to do paperless NHS, how are you going to sort out all your workforce problems, and to be frank, again it seems to us that’s almost completely inimical for the first objective which effectively is let’s discuss the big strategic issues.

So one of our observations would be, we need to be clearer about what this process is about. You’ve seen quite a lot over the last few days, particularly as a result of the King’s Fund.  The excellent, in our view, report that the King’s Fund published on Monday which we thought really did nail quite a lot of these risks extremely accurately.  You’ve seen a real kind of sense that you know, the stuff around public engagement and our perhaps rather misplaying of that, but also some real nervousness around governance issues, it seems to us is adding risk to this process.  If you buy the argument this is a really important process we absolutely kind of need it to work, but there is a nervousness at the moment that given the governance risk we have around it and given the public engagement risk we have around it, actually we’re making this process more risky than it needs to be.

We also think there is a bit of confusion around STPs and footprints. You know, are these plans, is this actually delivery footprints, is this the only or the primary footprint that we will work within in the future or one of many competing for space.  And the other risk that we think needs to be managed is, I think there are a lot of people who are saying to us, they’re nervous about particularly in a sense forced by that money issue, that there tends to be awful lot of focus on acute reconfiguration and actually perhaps insufficient focus on how are we going to really build new models of care that transfer care out of hospitals and certainly I think a real nervousness in some places about how inclusive are they of mental health, community, ambulance and primary and social care.

So just two very quick slides in terms of having perhaps given you a bit of a diagnosis and emerging score card, here’s our view I think about what should happen next. We believe that this process does have huge potential to bring together key local players to chart the right path for the future.  A phrase we quite often use is this is the only game in town and the process must be made to work.  I think as we all probably know, or most of us will know, we have actually got a bit of a pause on this process, so effectively what NHS England and NHS Improvement have said is, and I think they’ll say this formally next week, is effectively focus on the 17/19 operational plans and then really come back to the STPs with full force in January and I think our view is that that pause offers a good chance to get this process slightly more back on track and again to just really in a sense, pull together, what I said in the previous slides, we think for that to work the focus has to be clear.

Our view is focus on the big strategic issues, focus on transformation and sustainability. We must footprints the time they need to do the job required.  We need to ensure that STPs are underpinned with appropriate governance.  We do need to improve non-executive and board involvement in the process.  I think if we’re honest with ourselves, particularly those of us in secondary care, I don’t think we’ve done a good enough job in terms of involving both primary care and local government, and that comes across consistently.  I do think we must ensure that we’re more transparent and that these plans are genuinely co-designed with clinician staff, public and in the case of FTs, governors.

I do think we need to be clearer and more technically proficient on what the real financial envelope is. Don’t effectively try and monetise that 4% demand and cost gap, and effectively turn it into a scary looking target.  Be realistic and avoid over ambition or over focus on the financial numbers because they become mesmerising.  I think carefully calibrate the role of the centre, these must be bottom up plans.   And I think also, perhaps in a sense, maybe most importantly, accept that STPs will not solve some of the fundamental problems affecting the sector.  I don’t think STPs are going to really solve the fact that at the moment there is a clear gap between what the NHS is being asked to provide and the funding available.  And it seems to me they’re certainly not going to solve the problem with the unsustainability of social care at the moment.  Those require different solutions.  STPs are not going to solve that problem.

So one final slide, I just wanted to delve, just for a second, into something even more detailed, which effectively is just talk a tiny about governance. I suppose one of my observations I would make is, I think I can still just about call myself a relative new comer to the NHS.  I’ve been in the service about four years, one of the things that I would observe is I’m very impressed with the quality of the governance particularly kind of in provider land, where effectively you have really successful unitary boards doing a really good job with really high quality, non-executive directors who have set up really good governance assurance processes and where these are complex difficult organisations with large amounts of risk, I think we’ve done a really, really good job of having robust and effective governance.

I would just make the observation that we throw that away or we casually drift away from it at our peril, and I think at our later regret. So if we’re setting up these new STP structures effectively to not only plan but to be long term delivery mechanisms, we really do need to think about effective governance.  And I do worry when I hear some system leaders, be they nameless, saying that somehow governance is pedantry or change blocking.  Actually it does matter, this is the way that we manage risk including the risk of legal challenge and we already know from some of the media coverage that you can bet your bottom dollar there’ll be at least one STP, if not to be frank, the majority, that if we’re going to do ambitious things with, they’re likely to get some form of legal challenge and I suppose my argument is that if you look at governance, particularly as I said in terms of what we do at the moment, quite often we get to the best answer precisely because we’ve got robust governance and there is appropriate challenge.

It’s also a way, to be frank, ensuring that we get appropriate sign up to a plan and we avoid consent and evade which we know is a behaviour that sometimes gets exhibited when people don’t really want something to happen. If we don’t get the governance right, somebody can say “yeah I’ll do it” but then actually not do it.  And I think it also maximises the chances of effective implementation and accountability.

So whilst not for one moment doing anything other than praising the work of the fantastic STP coordinators of who Mr Sloman is one, I think we need to recognise that we need more robust governance and I just put down here kind of six thoughts about how we might get to a more effective governance solution.

One is “one size will not fit all”, actually I think they will be different governance structures in different places. Our view is that we think it’s very important that there should be appropriate non-executive and wider input into the STP process to avoid group think.  We think it’s important there should be the right balance, between on the one hand the need to move towards a system view but the reality is that if you just go completely towards systems and just say individual institutions don’t count at all, our nervousness is that effectively individual institutions will simply consent and evade.  So it’s no good trying to railroad people who don’t want to be taken on a solution.  It won’t work.  There has to be a governance structure that effectively involves appropriate sign up.

Clearly transparency as we’ve seen from this week’s media coverage is important. We think it’s important that the governance should enable appropriate co-design and involvement and I think we need to recognise that STPs actually have no legal status in law.  There is nothing in the 2012 Health & Social Care Act that talks about STPs and they therefore have to derive their authority from the constituent members.  So genuinely just to reinforce the point towards the top is, the first time that anybody be a 38 degrees, a local campaigning group, challenges a decision that’s been taken by the STP, the first thing that a judge would look at is “what is the legal basis for this decision being made” and they have no statutory basis.  So we just need to be careful about recognising that the authority to act comes from the constituent members.

So again, I’m sure some of our panellists might explain a bit more about some of the emerging solutions but what we’re seeing is the adoption of structures like committees in common, memorandums of understanding between individual institutions and formal constitutions as it were governing STPs, but this is an issue we need to sort out, it is not something that we can just disregard because it’s inconvenient.

So I hope that gives you a quick tour de reason of how we in NHS providers see STPs.


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