PAPER B

 

                                                                                                                Purpose : for Decision

                        REPORT TO THE EXECUTIVE

 

Date :              6 OCTOBER 2004

 

Title :               ORGANISATIONAL REVIEW - PREFERRED OPTION AND NEXT STEPS

                       

JOINT REPORT OF THE LEADER OF THE COUNCIL, THE PORTFOLIO HOLDER FOR ADULT AND COMMUNITY SERVICES AND THE PORTFOLIO HOLDER FOR CHILDREN’S SERVICES

 

IMPLEMENTATION DATE :18 October 2004

SUMMARY/PURPOSE

 

1.                  To receive a further report from PricewaterhouseCoopers; to report on the listening exercise undertaken during August and September; to determine which, if any, short listed option to further develop, and to set out an indicative timetable of next steps.

 

BACKGROUND

 

2.                  During a cycle of meetings in July 2004 the Local Authority Executive, Primary Care Trust Board and Healthcare Trust Board each considered a report that set out the following detailed context, developing the Healthfit process and the Statement of Intent in of July 2003:

 

“analysis of nine alternative configurations by PwC has led to a clear recommendation that a short-list of two, labeled option 5 and option 6, should be pursued. These are:

 

(a)       Establishment of a Health and Social Care Trust on the Isle of Wight that includes commissioning functions; and

 

(b)       The establishment of a Health and Social Care Trust on the Isle of Wight that does not include commissioning functions but that commissioning is undertaken in a separate organisation.

 

These options require further detailed work and development.

 

Option 8 in the long list identified by PWC refers to the establishment of one public service organisation. The report does not recommend this option for further development at this stage but organisations may wish to affirm that they will continue to explore this concept.

 

The two short listed options are differentiated only by the inclusion, or exclusion, of the commissioning function. The significance of this in differentiating between the two options is not made sufficiently clear by the current report. A further issue is determining what is to be included in terms of health and social care and housing within these two options. Further work is therefore proposed to be commissioned from PwC to:

 

·                     Determine how commissioning would be delivered in either option

 

·                    Provide clarity on the next steps which need to be taken, including the establishment of a transitional steering group to lead this work.

 

This work would be undertaken during the next few weeks with a view to being reported back to the Trust Boards/Executive during September 2004”

 

3.                  Each of the three Boards agreed:

 

(a)               To receive the PricewaterhouseCoopers report and accept the principle of establishing a care trust, and agree the additional work that is required to enable a decision on the two options.

 

(b)               To use August and the early part of September as an opportunity to involve stakeholders, including staff, in an exchange of information and views about the short listed options.

 

(c)               To receive a further report in September 2004 to determine which, if any, of the short listed options the Executive wishes to be pursued.

 

(d)               To continue to explore, as a long-term aspiration, the development of a single public service organisation for the Isle of Wight.

 

4.                  The two short listed options were:

 

·        Option 5 - establish a health and social care trust on the Isle of Wight that includes commissioning functions.

 

·        Option 6 - establish a health and social care trust on the Isle of Wight that does not include commissioning.

 

            Both options may include a range of services (the detail of which will be determined in the next development phase). The development work to date has been on the basis that each will contains primary and acute health services, adult social services, strategic housing services but not Children’s Services.

 

5.                  Attached as Appendix 1 is the Executive Summary of the second report by PricewaterhouseCooper.

 

6.                  Attached as Appendix 2 is a report prepared jointly by the PCT, Healthcare Trust and the Local Authority setting out the outcomes of the listening exercise.

 

STRATEGIC CONTEXT/EVALUATION

 

7.                  The options investigated by PricewaterhouseCoopers, and the recommendations in the previous and current reports, concern the creation of a wholly new organisation.  This provides unrivalled opportunity to adopt new structures and culture to deliver services in a manner dovetailed to the unique circumstances of the Isle of Wight.

 

8.                  The timing of the development work gives an opportunity to shape national policy, not least in relation to the adoption of structures to deliver governance and accountability in the delivery of health, social care and housing services, in ways which reflect the particular needs and aspirations of the Isle of Wight.

 

9.                  The proposed development work is, therefore, in many ways at a higher strategic level than the existing strategic framework within which the three existing authorities work.  However, as the key building blocks of that strategic framework, such as the Local Strategic Partnership and the HealthFit exercise, were designed to deliver services in the Island context the proposed development work will be consistent with the objectives set out in that strategic framework, even if ultimately the product of the development work will supersede the existing structures.

 

10.             The short listing of options was previously conducted against the following criteria:

 

(a)               Is the option sustainable?

 

(b)               Does it provide the potential to achieve economies of scale at reduced costs?

 

(c)               Is it consistent with, and assists in the development of, the local healthcare strategy?

 

(d)               Does it recognise the existing and emerging national policy and planning guidelines for the NHS and social care agendas?

 

(e)               What is the ease of transition and the timescale for change?

 

11.             It is suggested that a further criterion be applied in determining which, if any, of the two options to further develop:

 

(f)     Which option provides the greatest opportunity for efficiency and innovation in delivering health, social care and housing services to the Isle of Wight?

 

12.             The joint recommendation of the Island Strategy Group Plus (comprising the Chairs of the two Trust Boards, the Portfolio Holder for Adult and Community Services and the Chief Executives of each of the three organisations) is that Option 5 best satisfies the six criteria.

 

13.             The view of the Island Strategy Group Plus is that:

 

·        Option 6 creates too small an organisation to be viable and sustainable.

 

·        Option 6 would prove more costly due to the need to duplicate governance and managerial structures.

 

·        That the Isle of Wight environment means that commissioning cannot drive efficiency in the same way as elsewhere.

 

·        That there are tangible advantages to be gained through closer links between commissioning and provision.

 

·        That a single organisation with responsibility for commissioning and provision would better enable democratic accountability and community engagement.

 

14.             Development of the proposal is in it’s infancy. It is too early to present a business case or detailed cost benefit analysis.  These steps come later.

 

15.             It is also too early in the process to take a decision as to what form the new organisation should take. Advice from PricewaterhouseCoopers is that either of the existing health trust models could deliver a viable new structure. Perhaps the single most important of the key steps set out in Appendix 3 is the decision to be taken, in the light of further development work and negotiation with the Strategic Health Authority and national government, as to what model the new structure will follow. Clear criteria are needed to guide that development work, and to evaluate alternative structural models:

 

·                       Improving service delivery;

·                       increasing the extent of democratic accountability in the delivery of health services;

·                       preserving and enhancing the involvement of the local community in the delivery of health and social care services;

·                       the reduction of inequality;

·                       securing the continuation of a fundamental role for local authority overview and scrutiny of health and social care functions.

 

16.             It is not, however, too early for all parties to be concerned about delivery structures and, equally, about the financial stability and performance of the existing structures. 

 

17.             The Council executive, PCT Board and Healthcare Trust Board will remain as currently constituted and with their existing accountabilities.

 

18.             A Strategic Transitional Steering Group made up of the Leader of the Council (to Chair until appointment of a Chair Designate for the new body), the Chairs of the PCT and the Healthcare Trust and the Portfolio Holders for Adult and Community Services and for Children’s Services. The Group will be accountable to each of the two Boards and the Executive.

 

19.             An officer group, made up of senior staff from each of the three organisations, representatives of the various professions and utilising support from the Strategic Health Authority, will support and deliver the project managed by the Transitional Steering Group. This group will be lead by one of the existing Chief Executives.

 

20.             A second officer group, headed by one of the existing Chief Executives, will be responsible for ensuring, within a sound corporate governance framework, the financial stability and performance delivery of the Primary Care Trust and the Healthcare Trust. This group will be accountable to the existing Boards. The report at Appendix 3 adds further details.

 

21.             Throughout, the Council Social Services Select Committee will be able to undertake it’s statutory functions of overview and scrutiny in relation to the ongoing delivery of health, social care and housing services and in relation to the development and delivery of any proposed new structure.

 

22.             For all the partners there is a need to see that:

 

·        transitional corporate governance arrangements are robust and enable the functions of the two health organisations to be discharged.

 

·        appropriate organisational change principles and processes are used in developing the transitional arrangements and during any transitional period

 

23.             The indicative list of key steps out as Appendix 4 has an ambitious start date of April 2006.  It identifies as key steps:

 

·           decisions by each of the three existing bodies in relation to which services will be included within any new structure,

·           the details of corporate governance and accountability arrangements

·           the approval of a business case

·           several stages at which the Local Authority Select Committee can play a substantial role.

 

 

RECOMMENDATIONS

 

24.             It is recommended that the Executive:

 

(a)               Receive the PricewaterhouseCoopers Phase 2 report.

 

(b)               Receive the joint report of the PCT, Healthcare Trust and Local Authority on the listening exercise and commit to engaging with staff and taking account of their views at appropriate stages in any future development.

 

(c)               Approve the development of a single health, social care and housing organisation on the Isle of Wight that includes commissioning functions, ensuring that the model developed delivers, in the medium and in the long-term, innovation in:

 

·        Improving service delivery;

·        increasing the extent of democratic accountability in the delivery of health services;

·        preserving and enhancing the involvement of the local community in the delivery of health and social care services;

·        the reduction of inequality;

·        securing the continuation of a fundamental role for local authority overview and scrutiny of health and social care functions.

 

(d)               Establish structures to deliver these recommendations including a strategic transitional steering group and an officer support group made up of representatives of each of the existing organisations and the strategic health authority.

 

(e)               Supports the development by the PCT and Healthcare Trust Boards of an officer group to deliver continuing good corporate governance, financial stability, performance delivery and equality of opportunity during the transitional period.

 

(f)                 Note the indicative list of key steps at Appendix 4.

 

BACKGROUND PAPERS

 

Previous Reports to Executive

PwC report

 

Contact Point :           John Lawson, Head of Legal and Democratic Services, ' 823201

                                    [email protected]

 

 

SHIRLEY SMART

Leader of the Council

 

GORDON KENDALL

Portfolio Holder for Adult

and Community Services

 

JILL WAREHAM

Portfolio Holder for Children’s Services