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How Brent coped with a PCT in crisis

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When Brent LBC’s local primary care trust suddenly went into financial freefall the borough was hit by a bill for£10-12m. Chief executive Gareth Daniel tells the story.

It was a total surprise to everyone at Brent LBC when we first discovered in autumn 2006 that our local primary care trust was in financial meltdown and expecting a£42m end-of-year deficit.

We soon discovered that a new PCT officer team had been parachuted in by an anxious London NHS, the capital’s strategic health authority. It then abruptly advised us that the PCT would be seeking to transfer costs of between£10-12m to the local authority as part of delivering its ‘turnaround’ plan. No one at the council had expected such a sudden and dramatic collapse in the financial performance of this key NHS partner and nobody was quite prepared for the lesson the dispute provided on the real-world limits to inter-agency partnership working.

Partnership working

For years before the meltdown, we had been assured at joint meetings between our two agencies that the PCT was on an even financial keel and that it was supposedly one of the most financially stable health trusts in the West London area. As a council that takes partnership working very seriously and is generally regarded as being rather good at it we had enjoyed a very close relationship with our local PCT and had developed a wide range of jointly commissioned services in areas such as mental health, learning disability, children’s services and drugs and alcohol. Relationships at political, corporate and professional levels had been very cordial and we had no reason to believe this was about to change in the most lurid and unexpected fashion.

We soon discovered NHS commitment to partnership working is only as strong as the balance sheet of the health trusts with whom we worked. We also learnt that, when the chips were down, long-established partnership arrangements and the mutual trust and confidence on which they critically depend were suddenly deemed to be dispensable. Nothing would be allowed to get in the way of returning the PCT to financial break-even and the interests of Brent, or its many needy residents, didn’t enter into the calculation. The council’s reaction was understandably furious how could any serious partner realistically expect us to absorb such a big financial hit with little or no prior notice or consultation? Our anger was reinforced by the realisation that the new PCT chair was openly attributing the financial meltdown to a “catastrophic failure of governance” within the PCT.

The managerial and supervisory failures within the PCT were soon manifest for all to see. However, it was the ruthless and at times chaotic attempts by the new team of mostly interim health managers, aided and abetted by their sponsors in London NHS, which caused Brent LBC the most profound concern. Local NHS managers, many clearly fearful for their own careers, generated a series of ill thought out and under-researched savings proposals. The weakness of many of the PCT’s internal systems, procedures and information management arrangements were quickly exposed. And a major question mark was placed over many long-standing agreements such as the provision of speech and language therapy in Brent schools, the smoking cessation targets in our local area agreement and the jointly established protocols around continuing care for vulnerable adults. Proposals appeared to change literally on a daily basis and securing an accurate and up-to-date list of PCT proposals proved to be well nigh impossible.

Financial threat

But it was the sheer scale of the financial threat which provoked most concern at the council. Few, if any, local authorities have the capacity to absorb in-year a massive and unanticipated transfer of responsibilities from a partner agency and Brent is no exception. As an authority, Brent LBC is highly rated by the Audit Commission for its prudent financial management and effective budget planning. But we were never going to be in a position to throw money at the PCT to solve problems which we felt were entirely of its own making. Like many other councils, we were and still are struggling with the demographic pressures and rising costs associated with providing adult social care and we had little or no leeway to respond to the PCT’s demands, even if we had thought they were justified. Almost overnight, we were confronted with a major financial threat, a serious political controversy and most importantly a risk of large-scale disinvestment in the local health economy. And, ironically, all of this was happening at a time when the real-terms national budget of the NHS was growing far more rapidly than central government funding to local councils.

To say that our new Liberal Democrat-Conservative joint administration were disappointed would be a massive under-statement. Their political response was vitriolic to say the least but they were accurately reflecting the widespread concern in large parts of Brent’s community to what was being proposed by the NHS. Even normally calm local government officers were mortified by the arrogance of the ‘turnaround team’ and their apparent disdain for councillors and the democratic process. The indifference of the PCT was matched by contempt shown by London NHS, whose attitude seemed to be that we should keep quiet and stop rocking the political boat. The near total failure of NHS managers at both local and regional levels to understand the practicalities of council budget-making, the realities and constraints of our local political environment or the legitimacy of public debate about their savings proposals was something of a revelation to all of us. More worrying still was their evident lack of concern for the serious damage the PCT’s then leadership was doing to partnership working with the local authority. Our clear impression was that this issue simply wasn’t on their radar screen.

So how did the council respond to these varied challenges? At a political level, our leadership made it very clear that they would campaign against the cuts being made by the PCT and we succeeded, after much prevarication in Whitehall, in securing a joint meeting with the then London health minister Lord Hunt and former local government minister Phil Woolas. We prepared a detailed dossier setting out our concerns and the local impact of the PCT cuts programme. We also sought some recognition of the near-impossible situation in which we had been placed. To be fair, we were given a good hearing by the two ministers and the senior civil servants around them. Indeed, we even received a rather helpful letter from the Department of Health a week or so after the meeting which helpfully confirmed our interpretation of the legal position with regard to funding community care clients. But on the hard question of financial support there was nothing on the table for either the council or the PCT.

Local oligarchies

It was at this point that Brent LBC began to truly appreciate that the National Health Service is not a national service at all but rather at least when it suits the Department of Health’s purposes a network of local and largely unaccountable oligarchies. Without doubt, these still report to the centre but it is equally clear that major national challenges such as getting the NHS back into financial balance are quickly and expediently devolved to local managers and the unelected boards which supervise them.

That said, of course, we were well aware that London NHS was still very much involved in monitoring the situation and it did not hesitate to intervene by imposing a whole raft of interim senior managers to help reverse the financial crisis in the PCT. Some of these appointments were, in our view, political disasters that exacerbated an already difficult situation by their posturing and evident disregard for the consequences of their actions on a very diverse London borough with very high levels of health need. We were also somewhat puzzled by the curious reluctance of London NHS managers to accept any responsibility for their own governance failures in allowing one of their constituent bodies to go belly up so dramatically.

Encouraging signs

So where are we now and what have we learnt from this painful saga? Well, in the best traditions of pragmatic local government, we have been locked in negotiations with the PCT for months around scores of individual cases and we are hopeful that we will soon be able to draw a line under this whole painful affair. A deal will no doubt be struck which will push up Brent’s council tax but the PCT will not by any stretch of the imagination be getting what it initially demanded.

We have worked hard to ring-fence this dispute at a political and corporate level so it does not poison the many very important professional and service delivery relationships we have with operational staff in the PCT. And there are some early and encouraging signs that the new permanent PCT chief executive and his new team are making a genuine effort to rebuild the bridges so badly burnt by their predecessors. We will reciprocate fully but it will not be easy to forget the collateral damage that has been done over the last 18 months.

At the very least, we believe that Brent can be proud of standing up for its community and organising an effective high-profile campaign against the withdrawal of vital community health services. We also believe we have acted throughout this dispute in a spirit of self-confident local government and surely this is exactly what the ‘place shaping’ agenda should be all about.

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