Breakfast Seminar

As the regulator for foundation trusts, Monitor had a statutory duty to promote integrated services, Chris Walters told delegates. One of the ways it did so was by providing resources and toolkits on issues such as moving care from acute to community settings and improving the flow through hospitals.

While this had clear clinical benefits, it was difficult to save costs in the short term by moving to the community sector, he explained. Many schemes lacked economies of scale and the information needed to evaluate whether the schemes were working remained patchy. Certain pitfalls also needed to be avoided in order to deliver clinical and financial benefits, he said, which meant recruiting the right staff and ensuring that targets were the correct ones.

Monitor was in the process of merging with the Trust Development Authority (TDA) to form a single organisation, NHS Improvement, he said, and was also making changes to the assessment regime for organisations applying to become foundation trusts. “Transformation can lead to some efficiencies, but we have to look at other levers to improve productivity in the short term. Regulation in the health service has not been outcome-focused, and the fact that Monitor is becoming NHS Improvement is evidence that the balance has to change.”

A good regulatory environment was characterised by clear rules and incentives and “challenging but realistic asks”, he said. “When it comes to regulation, health is clearly much more complicated than gas or electricity or water. It’s principally publicly owned and provided, so there’s a greater emphasis on regulation to provide support – carrot, as well as stick. I do think we have a system that marries the best of a regulatory environment to the unique circumstances of the health sector.”

Despite the merger, Monitor still had a legal requirement to assess any trust applying for foundation status, he said, although there was “a finite number of trusts and foundation trusts. I don’t see a huge number of trusts queuing up for foundation status, and I don’t think we’re in a world where that status is a measure of whether something’s good or not. I think the CQC rating is a measure of that.”

Monitor’s approach to setting clear incentives and providing support was delivering genuine benefits, he told the seminar, with targets that were realistic and did not create an atmosphere of demotivation, as had happened in the past.

One major financial challenge facing the NHS, however, was the £3.3 billion spent on agency staff, the result of increasing demand and inflexible supply. “You have people re-selling themselves to their employers as agency staff,” he said. “It’s basically the same economic model as concert tickets. A venue only holds a certain number of people, so tickets can be bought at face value and re-sold at inflated prices by agencies.”

While there was competition within the NHS, it was not “head-to-head” competition, he pointed out. “It’s comparative competition, and there’s a challenge around getting more of the former into the health service.” Although the sector was vast – and world leading in many areas – it also remained “amazingly parochial”, he stressed. “It can be difficult, sometimes, to get your voice heard when you say, ‘have you thought about doing this?’ But the fact that there’s no more money has really sharpened people’s appetites for thinking beyond their own borders.”

And the financial problems were acute, he warned. “There is no money. We need our £8 billion sooner rather than later, and that’s not to fund seven-day services. That’s to keep the lights on.”