Healthcare Features

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Written by: Sean Clement

Category: Healthcare Features

Published: 28 July 2010

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The remuneration of civil servants – from BBC senior management to Whitehall mandarins – is under the microscope like never before, with the public and media clamouring for details of where their taxes are being spent. With cutbacks being made left, right and centre, Nick Siddall says public bodies’ legal departments need to be careful how they defend the inevitable disputes over compensation packages. The recent Court of Appeal case of Gibb v Maidstone and Tunbridge Wells NHS Trust, in which the trust argued it was acting beyond its own powers in promising Rose Gibb a £250k payoff, shows that the courts will not accept weapons designed purely to avoid golden goodbyes.

It is difficult not to feel a measure of sympathy for Maidstone and Tunbridge Wells NHS Trust. It had been rocked by the outbreaks of the 'super bug' C.difficile at hospitals managed by the Trust, closely followed by a Health Care Commission report damning its management. Amidst a storm of negative publicity it reached the view that its then chief executive (Rose Gibb) could not be permitted to remain in post. It sensibly sought the advice of solicitors as to the best means of terminating the employment of Ms Gibb as a result of campaigns both internal and external to the Trust. It agreed to pay her a compensation package at the top end, but within the range of, sums which it had been advised to consider.

All appeared to be progressing to an amicable parting of ways between the Trust and Ms Gibb when the Director General of NHS Finance wrote, prohibiting the Trust from paying a penny more than the contractual sum to which Ms Gibb was entitled. It appeared to everyone that the motivation for this prohibition was the then Health Minister’s desire to state publically that he did not “reward failure” and that he had blocked the payment.

Therefore the Trust was forced to refuse to pay the sums in excess of Ms Gibb’s contractual notice pay and to argue before the courts that its own decision to pay circa £170,000 additionally by way of compensation was irrationally generous, unlawful and thus void under Wednesbury principles.

At first instance before Mr Justice Treacy, the Trust won and it was held that the compensation payment was indeed irrationally generous and that Ms Gibb’s alternative claims in restitution and/or breach of contract failed. However in a judgment handed down in June the Court of Appeal overturned the decision of the High Court. The essential basis of the Court of Appeal’s decision was (1) a public body faces a high hurdle indeed when it seeks to claim that a decision is unlawful as a result of its own irrationality and (2) Treacy J had wrongly adopted his own view of the financial sense of the Trust’s decision. Thus he had acted as a financial auditor and wrongly applied his own view of the financial sense of the agreement.

The Court of Appeal also expressed the common law doctrine that the breach of relevant Treasury guidelines as to the level of the settlement was irrelevant to the irrationality of the payment. It finally suggested (but did not decide) that if the compromise agreement had been void that Ms Gibb would have a remedy in restitution allowing her to mount a claim in any event as the Trust would have been unjustly enriched by obtaining the termination of her employment without paying for the obvious benefits that it gained. One appeal judge (Laws LJ) went even further and stated that he considered that Ms Gibb would also have a claim in breach of contract in the event that the payment was void.

In the absence of a successful appeal to the Supreme Court by the Trust it is clear that statutory bodies should pay careful attention and act with care in assessing the level of all compromise payments paid on the termination of employment. Relevant Treasury or statutory guidance should be considered and weighed when agreeing to the level of any payment. It would seem wise that the advice of lawyers should be sought as to the likely costs of and potential awards flowing from any envisaged litigation. It may well be wise that advice external to the statutory body is sought to avoid suggestions of partiality.

If a statutory body follows this approach, it will be protected against being caught between the rock and hard place in which the Trust in Gibb found itself.  Such steps ought to allow justification of its decision to the eventual auditor/paymaster as being a sensible and reasoned compromise of the risks of potential litigation.

Nevertheless there is a clear theme running through the judgment of the Court of Appeal that statutory bodies cannot have their cake and eat it. Even if the assessment process suggested above has not been completed by the statutory body, the judgment makes clear that the courts will be extremely unwilling to allow a body which has been careless or whimsical in agreeing a compensation package to rely on its own default to get out of deal which it no longer likes.

The principle is perhaps best seen in the words of Sedley LJ. The judge said: “This is not only because public bodies, with access to competent legal advice, can be expected not to act on whims and, when accused of doing so, are generally found not to have done so. It is because if a public body can denounce its own commercial agreements as having been excessively generous – in other words can invite the court to recalculate its liability – it will not be only at the authority's own instance that this can happen...What matters is that the autonomy of statutory bodies like the Trust will be irrevocably compromised: the enlargement of what counts as a public law wrong will mean that every financial decision of a public body is open to scrutiny by the courts on the motion of anyone with a sufficient interest. Only the legal profession would regard such a development as desirable.”

Therefore if a statutory body had felt that Treacy J’s judgment at first instance gave it a “get out of jail free” card as regards a compromise by which it no longer wished to be bound, those days are definitely over. Budget cuts or no budget cuts statutory bodies and Whitehall Mandarins (just like private individuals) need to bear in mind the mantra “let he who compromises beware!”

Nick Siddall is a barrister at Kings Chambers in Manchester and Leeds.

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Written by: Sean Clement

Category: Healthcare Features

Published: 22 July 2010

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The government has fleshed out its plan to hand local authorities a greater role in healthcare, launching two consultations on key proposals contained in its recent White Paper on the future of the NHS.

The consultation papers – Local Democratic Legitimacy in Health and Commissioning for Patients – set out how patients, councillors, local authorities, public health experts and others will work alongside GP consortia, which will now make most commissioning decisions.

Proposals include establishing a statutory partnership board or “health and wellbeing board” within local authorities.

The Secretaries of State for Health and Communities and Local Government, Andrew Lansley and Eric Pickles, said the partnerships, led by local authorities, would mean services “will become more responsive and be developed in ways that fit around the people who use them”.

The ministers added that patients and the public would have a stronger voice through local HealthWatch, a new patient group dubbed a “citizen’s advice bureau” for health and social care.

Under the scheme, within a ring-fenced public health budget local health improvement funds will be held by local authorities, with decisions about how this is spent taking into account all local issues that impact on well-being.

Pickles said: “For the first time in 40 years there will be local democratic accountability and legitimacy in the NHS. Elected councils will have a key role including commissioning HealthWatch services to guarantee patients a voice. As we push power away from Whitehall we will make the health service more answerable to patients, not politicians.”

In Local Democratic Legitimacy in Health, the government sets out how local authorities will have greater responsibility in four areas:

• leading joint strategic needs assessments (an assessment of the health and wellbeing needs of the population in a local area) to ensure coherent and co-ordinated commissioning strategies
• supporting local voice, and the exercise of patient choice
• promoting joined up commissioning of local NHS services, social care and health improvement, and
• leading on local health improvement and prevention activity.

The consultation paper says: “With the local authority taking a convening role, it will provide the opportunity for local areas to further integrate health with adult social care, children’s services (including education) and wider services, including disability services, housing, and tackling crime and disorder.”

Take up of current flexibilities to enable joint commissioning and pooled budgets has been relatively limited, the paper says. “It has tended to focus on specific service areas, such as mental health and learning disabilities,” it continues. “The full potential of joint commissioning, for example to secure services that are joined up around the needs of older people or children and families, remains untapped.”

The government believes there is scope for stronger institutional arrangements, within local authorities and led by elected members, to support partnership working across health and social care, and public health.

One option, the consultation paper says, is to leave it to NHS commissioners and local authorities to devise their own local arrangements. However, the government’s preferred approach is “to specify the establishment of a statutory role, within each upper tier local authority, to support joint working on health and wellbeing”.

The consultation paper argues that the advantages of such a statutory arrangement would be that it provides duties on relevant NHS commissioners to take part, a high-level framework of functions and therefore clarity of expectation about partnership working.

A statutory partnership board could also enhance the respective roles and responsibilities of participants and act as a vehicle and focal point through which joint working could happen, it says.

The functions of such a board would include a scrutiny role in relation to major service design, and the consultation paper proposes transferring across the statutory functions of overview and scrutiny committees.

The government insists that any requirements for a statutory partnership board would be minimal “with local authorities enjoying freedom and flexibility as to how it would work in practice”. Arrangements would need to be put in place in two-tier areas so that democratic representatives of areas below the upper tier can contribute.

Membership of the board would bring together “local elected representatives including the Leader or the Directly Elected Mayor, social care, NHS commissioners, local government and patient champions around one table”. Directors of Public Health, within the local authority, would also have a critical role. GP consortia will be represented, while councils could also choose to invite representatives from the voluntary sector and “other relevant public service officials”.

In cases where there is a dispute between commissioners and local authorities, health and wellbeing boards will have a power to refer the commissioning decision to the NHS Commissioning Board. If concerns still exist, then they will have a statutory power to refer cases to the Health Secretary.

Local Democratic Legitimacy in Health can be downloaded here.

Commissioning for Patients meanwhile seeks views on a on a number of areas including:

• How GP consortia and the NHS Commissioning Board can best involve patients in improving the quality of health services
• How GP consortia can work closely with secondary care, community partners and other health and care professionals to design joined-up services that are responsive to patients and the public
• How the NHS Commissioning Board and GP consortia can best work together to make effective and efficient commissioning decisions
• How the NHS Commissioning Board can best support consortia and ensure they achieve improvements in outcomes within NHS resources

It can be downloaded here.

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Written by: Sean Clement

Category: Healthcare Features

Published: 13 July 2010

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Local authorities will take on the health improvement functions currently carried out by primary care trusts in a radical overhaul of the NHS, the government has announced.

The White Paper Equity and Excellence: Liberating the NHS, published yesterday by Health Secretary Andrew Lansley, also said the coalition will simplify and extend the use of powers that enable joint working between the NHS and local authorities.

Other key announcements include the establishment of an NHS Commissioning Board to lead on achieving health outcomes and allocating resources, a network of GP consortia with responsibility for commissioning care, and a Public Health Service to cover public health evidence and analysis. All NHS trusts will become or be part of a foundation trust under the plans, with the government aiming to create “the largest social enterprise sector in the world”.

Local authorities will take on the function of joining up the commissioning of local NHS services, social care and health improvement. PCTs – and strategic health authorities – will be scrapped, most likely in 2013.

The government said the move would “realise administrative cost savings, and achieve greater alignment with local government responsibilities for local health and wellbeing”. The transfer of local health improvement functions will involve ring-fenced funding and accountability to the Secretary of State for Health.

Local authorities’ responsibilities “will include:

• Promoting integration and partnership working between the NHS, social care, public health and other local services and strategies
• Leading joint strategic needs assessments, and promoting collaboration on joint commissioning plans, including by supporting joint commissioning arrangements where each party so wishes, and
• Building partnership for service changes and priorities. There will be an escalation process to the NHS Commissioning Board and the Secretary of State, which retain accountability for NHS Commissioning decisions.”

The paper adds: “As well as elected members of the local authority, all relevant NHS commissioners will be involved in carrying out these functions, as will the Directors of Public Health, adult social services, and children’s services. They will all be under the duties of partnership.”

Representatives of Local HealthWatch – local involvement networks that will be part of a new independent consumer champion, HealthWatch England, based within the Care Quality Commission – will ensure feedback from patients and service users is reflected in commissioning plans. Local HealthWatch will be funded and accountable to local authorities.

The new arrangements will be delivered by “health and wellbeing boards”, which will take the place of the current statutory functions of health overview and scrutiny committees.

“These boards allow local authorities to take a strategic approach and promote integration across health and adult social care, children’s services, including safeguarding, and the wider local authority agenda,” the paper said.

The arrangements are also intended to give local authorities influence over NHS commissioning and corresponding influence for NHS commissioners in relation to public health and social care.

The paper said: “While NHS commissioning will be the sole preserve of the NHS Commissioning Board and GP consortia, our aim is to ensure coherent and coordinated local commissioning strategies across all three services, for example in relation to mental health or elderly care.

“The Secretary of State will seek to ensure strategic coordination nationally; the local authority’s new functions will enable strategic coordination locally. It will not involve day-to-day interventions in NHS services.”

The Department of Health said it will consult fully on the details of the new arrangements, which it claimed were about devolving powers from Whitehall to patients and professionals, and streamlining the NHS.  It expects £20bn in efficiency savings by 2014.

Patients will have more choice and control, based on the principle of “no decisions about me without me”, it said. Patients will be able to choose which GP practice to register with, regardless of where they live.

Health Secretary Andrew Lansley said: “The NHS is our priority. That is why the coalition government has committed to increases in NHS resources in real terms each year of this Parliament. The sick must not pay for the debt crisis left by the previous administration.

“But the NHS is a priority for reform too. Investment has not been matched by reform. So we will reform the NHS to use those resources far more effectively for the benefit of patients.”

Cllr David Rogers, Chairman of the Local Government Association’s Community Wellbeing Board, called for councils to be given a central role in the outcome of any NHS reorganisation.

He said: “They know their area best and working in partnership with health professionals are best placed to help improve the health of residents and respond to circumstances in their areas.

“Town halls want to promote healthy, active lifestyles and help people live longer, happier lives. With a long and proven history of addressing public health issues, they are ideally placed to deliver these goals and guarantee public involvement in local commissioning decisions."