NHS staff must not be forced to create health co-ops

Major changes for the NHS in England have been proposed by the Coalition Government.

One main strand running throughout the White Paper is to give more power — and control of funding — to groups of GPs. One quote to be remembered is: “Family doctors already play a vital role in the Health Service and they will play an even bigger role in future … larger practices will be able to choose to take control of some NHS funds to finance a range of local services for their own patients.”
The above quote is not from the 2010 Health White Paper. It is from page 12 of a Department of Health (DoH) booklet, The NHS Reforms and You. That was published 20 years ago, when the Conservative Party was in government without the aid of any Liberal Democrats. The Government’s changes at that time went under the general umbrella of Working for Patients.
Moving full circle, we see the theme of what was then called GP fundholding return, so what is new in these proposals? A great deal. However, we confine most of our remarks here to matters that are of relevance to the co-operative agenda as such.
The Government’s programme for government published in May contained these commitments: “We will support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services.”
“We will give public sector workers a new right to form employee-owned co-operatives and bid to take over the services they deliver. This will empower millions of public sector workers to become their own boss and help them to deliver better services.” 
The title of the White Paper this July was Equity and excellence: Liberating the NHS. Its introduction talks about moving away from “top-down control”. Leaving aside the fact that quite a few of its 57 pages contain what look like pretty prescriptive points of detail meant to be acted upon locally, the paper does contain material that is very relevant to co-operative thinking. In that same section there is also reference to “ownership and decision-making in the hands of professionals and patients”.
Parts of the NHS had already been talking about some of the implications, for example in a conference run by the King’s Fund in July, ‘Creating employee-owned organisations in the NHS’. One model in vogue is the idea that the John Lewis Partnership could be a model for setting up enterprises formed by existing groups of NHS employees. There are already mutual models such as Sunderland Home Care Associates that operate in the social care arena in the UK.
The White Paper seeks to make all NHS trusts into foundation trusts by 2013. That is actually later than the original Labour Government intentions. But, to change the culture of NHS bodies should not be done overnight. It should require careful preparation and not be hurried.
A clear move away from the intentions of the Act of Parliament that created foundation trusts is the idea that “staff will have an opportunity to transform their organisations into employee-led social enterprises that they themselves control, freeing them to use their front-line experience to structure services around what works best for patients”.
The same section of the White Paper goes on to advocate that some foundation trusts would be led only by employees; others could have wider memberships. The Government issued a consultation paper (Liberating the NHS: regulating healthcare providers) on 26th July, asking for comments by October 11th. This aspect of the Government’s plans provides a clear agenda the co-operative sector should engage with. That consultation paper repeats the option of going for employee-led foundation trusts, or having parts of some foundation trusts run as employee-led enterprises. 
There is talk of some foundation trusts having employee-only membership. It also states that the ordinary type of NHS trust in England is to be abolished and that all trusts will have to become foundation trusts. Top down reorganisation? The Government is clearly also intending that the foundation trust regulator, Monitor, become an economic regulator across the health and adult social care sector as a whole, not only for the operation of foundation trusts. It also very definitely wants Monitor to promote competition and to apply competition law to the sector.
The Government’s apparent emphasis is on a single aspect of governance: worker-led organisations. But to whom is the NHS accountable? One criticism of many public services over the years has been that they can be subject to ‘producer capture’; that is that they can end up effectively being run in the interests of their employees — not as shareholders, but making them less responsive to the public than they ought to be. 
The 2010 Health White Paper uses the term “employee-led”, rather than employee-owned, but nevertheless the emphasis seems to be on employees having a really key governance stake in healthcare provision.
When NHS foundation trusts were set up in England the governance model was a multistakeholder one, borrowed in part from the co-operative and mutual sector. Co-operatives UK was one of the bodies represented on the Department of Health External Reference Group on Governance. 
The idea was that local residents, trust employees and other stakeholders (such as local authorities and third sector health bodies) might have a say in electing the foundation trust governors, who in turn had the power to appoint and remove the trust’s non-executive directors. The model acknowledged that there are wider NHS accountabilities than to employees alone, important though they are. Furthermore, the Act of Parliament that created foundation trusts set them up as ‘public benefit corporations’, with ownership vested in the state.
To be sure, there are some interesting proposals on improving public involvement and the governance of foundation trusts that are set out in the consultation paper. The co-operative sector still has things it ought to say constructively on membership involvement and trust governance — and some of them should have been said more clearly and positively by the Co-operative Movement several years ago. Yet the emphasis on NHS policy (such as the application of competition law) is very definitely different from the approach taken by the UK Labour Government and by the Co-operative Movement up to now.
One of the speakers at the King’s Fund conference last month warned of what could happen once it came to renewal time for contracts placed for NHS services. Would a new social enterprise, co-operative or whatever form of arms-length entity that the coalition is encouraging really be up to coping with the contract compliance procedures that national and multinational private firms can take in their stride? Would a smallish worker-run co-operative providing, say, pathology services, be up to competing with the tough world of private practice? 
A common complaint under the previous UK Government was that it was very hard for small and medium-sized enterprises to compete with large businesses for public sector contracts. 
Why should that be any different in the case of a coalition government that would presumably ask the Department of Health to be neutral when it comes to commercial tendering, let alone taking the structure of the enterprise into account — whatever may be said about co-operatives in the coalition programme. Setting up organisations to fail should be no part of any reform, surely?
Or might an employee-led enterprise be converted into one with external shareholders and sold by its workers to the private sector? Such things have happened in the co-operative sector. Where would the accountabilities lie then? Whatever happens, it is not good practice to try to create autonomous or semi-autonomous NHS bodies by diktat. If any are to become co-operatives, for instance, it has to be recognised they rely on voluntary participation, not by being told by senior managers or politicians.
Both the White Paper and the consultation document on healthcare providers promise “foundation trusts will not be privatised”. Yet the intentions behind the change in role of Monitor also make it clear that competition is intended to be the NHS norm in England in the near future.
The boards of Primary Care Trusts (PCTs) were to have had directly elected directors. That idea has already gone out of the window with the White Paper proposal to transfer the health promotion functions of PCTs to local authorities.
We have both been strong advocates of co-operation in healthcare for many years. We want to see co-operation become more widely accepted in the UK healthcare economy, including applying some of the experience of many of our friends and colleagues in the International Health Co-operative Organisation.
The UK Government is clearly going to make moves to change the NHS in England. Whatever the views on parts of the Government proposals the co-operative sector should try to influence the outcomes where it can in ways that could enhance co-operation and indeed healthcare itself. Standing by and doing nothing should not be an option.
• Geraint Day served on the DoH External Reference Group on Governance of foundation trusts. Mo Girach works in the field of health co-operatives, mutuals and social enterprises and was previously Chief Executive of South East London Doctors’ Co-operative.
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