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Mr Victor Paige

Volume 98: debated on Wednesday 4 June 1986

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3.36 pm

(by private notice)

asked the Secretary of State for Social Services if he will make a statement on the resignation of Mr. Victor Paige from the chairmanship of the National Health Service Board.

In October 1983 I announced that the Government accepted the recommendations of the NHS management inquiry, under the chairmanship of Sir Roy Griffiths, that general management should be introduced into the NHS, and that a board should be set up within my Department to be responsible to Ministers for the Department's functions in relation to the management of the NHS.

Mr. Victor Paige took up appointment as chairman of the board, and as second permanent secretary within my Department, on 2 January 1985. His contract was for three years. The board was established in April 1985 and contains members drawn from business, the National Health Service and the Civil Service. Mr. Paige has paid tribute to the abilities of the Board and the progress the board has already made. I should like to express my thanks to Mr. Paige for his part in that progress.

I confirm that substantial improvements have already been made in the efficient management of the NHS. Those achievements reflect great credit on the Health Service itself, including authorities, managers and staff, and on the direction and leadership which the service has had from my Department.

As the House will be aware, Mr. Paige has resigned his position as chairman of the management board. He discussed his intention with me, and we agreed that it would be right for him to stand down. I have published in full the exchange of letters between us in which Mr. Paige explained his reasons. There is nothing that I can add to what he has said and my reply. I have therefore appointed Mr. Len Peach, who is the board's director of personnel on secondment from IBM, as acting chairman of the board. I shall make a substantive appointment as soon as possible.

The Government remain fully committed to better management of the National Health Service. I have every confidence that, under the leadership of the management board, health authorities and their general managers will continue to ensure that more and better care is provided for patients and that the best value for money is obtained.

The statement raises more questions than it answers.

Will the Secretary of State tell the House precisely why Mr. Paige gave up his £70,000 a year job in mid-contract? Did he jump, or was he pushed? Was he pressed for too many or too few cuts? Does his departure leave in tatters the policy of bringing private bosses into the National Health Service? Is it true that, in the past two months, three similar appointees have resigned as district managers — three out of the 25 outsiders? Is it true that the business genius who was appointed to head an audit into value for money in the NHS has just gone bankrupt to the tune of £300,000?

Does the Secretary of State agree that his policy is wrong, or is it just that he is a bad judge of people? Will he now appoint someone from the thousands who have made the NHS their life's work and not appoint another rank outsider with no staying power? Will he ensure that the new person uses the National Health Service instead of relying on the private sector?

I do not accept what the hon. Gentleman has said. Mr. Paige set out the reasons in his letter. I do not think that there would be much point in my trying to interpret further what he said. There was no question of disagreement about resources. We have 750 general managers in post, and two or three have left. That shows the confidence in the concept of general management. I think that the hon. Gentleman will concede that Mr. Paige himself endorsed the concept of general management.

Substantial achievements have already been made. Indeed, £150 million of cost improvements have been made. The concept of identifying one person as being responsible and accountable for ensuring that decisions are made and that action is taken can only be right. We have no intention whatever of turning our backs on the general management concept. That concept is in the interest of the Health Service, and it is about time that the hon. Gentleman supported it.

Although one regrets Mr. Paige's departure, is not the important point that the concept of general management is now sufficiently well established — notwithstanding Mr. Paige's decision to go—and that very few people, other than one or two Opposition Members, would want to return to the old idea of a bloated bureaucracy? Does my right hon. Friend concede that, if any lesson is to be learnt, it is perhaps that Mr. Paige's successor should be given even more support, if that is possible, in standing up to the vested interests in the NHS, who have no interest in the NHS running on a commercial basis?

There is much truth in that, and particularly in my hon. Friend's opening remarks. The general management concept is accepted in the NHS. As the Institute of Health Service Management has said in a statement made during the past 24 hours, general management is beginning to work very well, and the NHS will provide better quality care and value for money as a result. That is why general management is important, and that is why it will and should continue.

Irrespective of one's view about the principles of general management, is there not widespread concern about the way that it is being implemented? Following Mr. Paige's unfortunate resignation, will the right hon. Gentleman undertake a review of the implementation of unit management policy? Does the Secretary of State have any intention of reviewing the new incumbent's terms of reference?

No, I do not think that that is necessary. The managment board is carrying out an important job. It continues in post, although obviously with the exception of Mr. Paige. and it will continue to do its work. Mr. Len Peach, the acting chairman, comes from outside industry, and is a man of enormous experience. I believe that the management board will establish itself and will continue to achieve great things for the NHS.

Does my right hon. Friend agree that management by committee cannot be very effective? Does he further agree that trying to manage by consensus must lead to inefficiency? Surely it is high time that we returned to a system of one person in a hospital being responsible for all management. That would be much better than having many committees, with one looking after provisions, one looking after beds. one looking after cleaning, and so on, without any one person being in charge. That is the problem in the NHS.

My hon. Friend is absolutely right, and that is why general managers are being introduced. not just at the regional or district level, but, most importantly, as my hon. Friend said, at the hospital or unit level. That is the philosophy behind what we are doing. The concept involves identifying the person responsible and accountable for ensuring that decisions are made and that actions are taken. It replaces the old unsatisfactory system which in, for example, the Stanley Royd case might lead to great tragedies for the NHS.

Why does not the Secretary of State come clean? He knows very well that Mr. Paige was not prepared to be shoved round by him and his Department. The right hon. Gentleman talked about Mr. Paige's resignation, but we need the right hon. Gentleman's resignation on the table.

I have endured three months of the hon. Gentleman during the proceedings in Committee on the Social Security Bill and I suppose I can take a little more than that. However, his comments on the NHS are no nearer the mark than any of his comments on social security matters.

I thank my right hon. Friend for his tribute to my constituent, Mr. Victor Paige, and his work in the NHS. Mr. Paige, together with my right hon. Friend and many Conservative Members, is deeply committed to the idea of general management because of the result that it has already produced. Is my right hon. Friend aware that the 25 per cent. more nurses at the Hemel Hempstead hospital in my constituency are paid for partly by the efficiency savings that have been brought about by strong general management? Will my right hon. Friend confirm that the terms of reference for the new chairman will not only be the same as those for the previous chairman but will be redoubled in an effort to obtain efficiency?

I am grateful for what my hon. Friend has said. We have already achieved £150 million in the cost improvement programme. That money goes directly into the Health Service and is valuable to it.

Does not this affair show that one cannot impose the blunt instrument of commercial markets on what is effectively a social service? Why does not the Secretary of State tell the truth? Why in his reply to my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) did he stick so religiously to his brief? Why does he not tell us what really happened and what arguments have taken place in the past two months between Mr. Victor Paige and the departmental Ministers on the running of the service?

We have exchanged letters on this matter. Mr. Paige has put out his reasons for resigning, and I have replied to them. We agreed that it would be right for Mr. Paige to step down.

Does my right hon. Friend agree that, in his letter, Mr. Victor Paige does more than endorse management principles; he warmly and enthusiastically supports them? Does he further agree that the management of the NHS is, as Mr. Paige has said, complex? Is it not inevitable that there will be difficulties in introducing business management methods into this enormous concern, which covers professional people and staff in catering, laundering, cleaning and many other activities, all of whom have traditional but inefficient practices? Is my right hon. Friend aware that we shall fully support the new chairman, when he is appointed, in helping him to rid the Health Service of these practices and to achieve efficient business management within the NHS?

I am grateful to my hon. Friend. The Health Service is a complex management job, and it employs about 1 million people. The Griffiths report recognised that complexity, and Mr. Paige's achievement has been that he has taken the management process to stage one and, in particular, to the stage when general managers have been appointed almost entirely throughout the country.

Is the Secretary of State aware that, while people may not care too much either way about Mr. Paige, they are aware that there is insufficient funding of the National Health Service resulting in continued cuts, lengthy waiting lists and closures? Is he also aware that there is no lack of understanding on the part of the public regarding the Conservative party's attitude to the NHS? It has no genuine commitment to the NHS, and it would not stay in power for five minutes were it not for electoral reasons.

There is nothing in the resignation of Mr. Paige to do with the question of more resources. The attitude of the Conservative Government to the Health Service is shown by the fact that we are spending £18·75 billion on the Health Service, which is a 24 per cent. real increase on what the last Labour Government spent.

Will my right hon. Friend take on board Mr. Paige's two comments about improving employees' commitment and the importance of management education? Does he agree that we are lucky to have a large number of committed and able people within the NHS who, with a little encouragement and a dollop of that management education, might provide the general managers of the future, whom Mr. Paige rightly regards as vital to the future of the NHS?

That is an important point, particularly in relation to management education. The new acting chairman of the management board, Len Peach, with his experience will be well placed to implement just that.

Do not the terms of Mr. Victor Paige's resignation letter to the Secretary of State make abundantly clear the Government's absolute folly when they decided to implement the Griffiths report wholesale and appoint 750 general managers throughout the country, creating this new edifice of which Mr. Victor Paige was the top point, without bothering to test the Griffiths report in pilot schemes in different health authorities throughout the country?

As the Secretary of State has laid such emphasis on the need for general management and lines of responsibility, does he not feel that what comes through loud and clear from this resignation is that, instead of decisions being taken in the front line, they were being referred more and more up the line to the Elephant and Castle and that they were falling victim to personalities and politics there?

No, I do not think that that is the case. The concept of general management is that decisions should go down the line to the hospital and to the districts, and that is what is taking place. I have heard before what the hon. Gentleman has said about pilot schemes, but I do not think that that is a very sensible way of introducing the concept of general management into the Health Service. I certainly do not think that if we had done it that way we should have secured anything like the cost improvements that we have managed to secure under the plans and policies that we have implemented.

Order. This is a private notice question. I shall allow one more question from a Member on each side of the House.

Is my right hon. Friend aware that, although the National Health Service management board has been in existence for just over a year, much of the best work that it has done has been in recent months, particularly in its evidence to the Public Accounts Committee? Is he able to give a commitment to the House that this work will continue with even more rapidity than before, even while we are awaiting the appointment of a new chairman?

Yes, entirely. I am grateful for what my hon. Friend has said. The work of the management board will go on as usual. I can give him totally that assurance.

What estimable qualities other than those possessed by Mr. Paige is the Secretary of State looking for in his successor?

We need someone with management experience and I think, above all, with a commitment to the National Health Service.