News / News analysis: Defence of the manager’s realm

Against a backdrop of increased manager bashing, the King’s Fund has taken up the defence of the management role and called for planned cuts to be revisited. Steve Brown reports

NHS managers – the perennial whipping boys of the health service – witnessed a rare event in May. Someone actually stood up for them. The King’s Fund report The future of leadership and management in the NHS countered the view of managers as a mere bureaucratic overhead – the image championed by the national media – and called for the ‘value of good NHS managers and leaders’ to be recognised. It went further, suggesting that, if anything, the NHS was currently under-managed.

The King’s Fund, whose report was published following the establishment of a commission last year to investigate management and leadership, said it was time to stop using management as a ‘pejorative’ term. ‘It is often equated sneeringly with bureaucracy, the report said. ‘Whole political careers have been built on attacking it.’

Using almost the exact phrase lifted from the HFMA’s evidence to the commission, the report said: ‘The distinction between front line and management or between front line and back office is far from helpful.’

The commission’s chair and King’s Fund chief executive Chris Ham acknowledged that there was public support for reducing the number of NHS managers. ‘But given the immense challenges facing the NHS, politicians of all parties must resist the temptation to denigrate the value of management in delivering excellent and efficient services,’ he said.

Perhaps the commission’s key recommendation was for coalition plans to cut administration costs by 33% and management posts by 45% to be ‘revisited’.

It could find ‘no persuasive evidence that the NHS is over-managed’, while there was a good deal of evidence that it ‘may be under-managed’. Management and administration would need to share the pain of cost reductions, but a ‘more sophisticated approach’ to the reduction in both areas was required.

The commission attempted to pull together broad estimates for the costs of management across the whole health service, including the Department of Health, arm’s length bodies and regulators. However, there are huge difficulties with definitions of managers and administration and its crude estimate of £8bn for the cost of these areas – less than 10% of the £100bn NHS budget – comes with a significant health warning.

‘What the figures demonstrate is that any attempt to produce a reliable estimate of the costs of administration and management in the NHS is like squeezing a block of unreconstituted jelly – and attempts to make any precise comparison of costs between countries is an even more thankless task,’ the report said (see box).

There was a recognition that the NHS may be over-administered, but this was a result of performance management, regulation and audit. Ministers needed to acknowledge that ‘the bulk of these demands have been placed on [the NHS] by politicians and the public’.

There was a clear tension between proclamations about reducing bureaucracy and initiatives to strengthen regulation and make more information on healthcare performance and outcomes available to the public.

Describing both the administration and management cut figures as ‘simply arbitrary’, the King’s Fund highlighted the complete absence of any published analysis to back them up, adding that the cuts would be pushed through at a time when – because of the current financial squeeze – good leadership and management will be at a premium.

The commission also warned that the current reforms – replacing 150 primary care trusts and 10 strategic health authorities with between 200 and 300 commissioning bodies, alongside the creation of 150 health and well-being boards in local government – was likely to lead to an ‘increase in management and administrative posts, not a reduction, and not necessarily an improvement in either management or leadership’.

Things will have to be done differently, the report said. Back-office functions such as payroll, finance and procurement could be shared. But it warned:

‘The current policy of creating more commissioning and oversight organisations while slashing management and administration costs is more likely to lead to financial failure than an improvement in patient care’.

According to the NHS Confederation, stable and effective leadership would be the difference between success and failure as the service entered a period of huge financial challenge. 

Its new chief executive, Mike Farrar, also stressed that any cut in administration would need to be driven by a reduction in centrally imposed data returns. ‘The report highlights points that the NHS Confederation has been making for some time about excess bureaucracy and the demands of supplying large amounts of often overlapping information to a range of organisations,’ he said. ‘Streamlining these arrangements so different bodies work off similar data is essential.’

The commission report suggested the current reforms raised big issues around leadership and management. It pointed out that GP practices were in the main small businesses and that new commissioning consortia would ‘require extensive management and leadership skills’.

It highlighted a concern that the best management skills in PCTs and SHAs could be lost in transition.

Governance of foundation trusts would also need attention in the new world, when bespoke regulation by Monitor comes to an end, said the report. It added that governors would have a much greater role – becoming much more like a supervisory board overseeing the work of the board of directors .

While this change had ‘received little attention’, governors would need high-quality business skills in addition to a commitment to NHS values. ‘Despite the tight budget, money must be found for training to allow governors to effectively exercise their much greater responsibility,’ the report said.

Having anyone recognise the value of management is a welcome change for managers, especially since there has been a recent escalation in the sport of manager bashing. But having such a high profile and influential organisation as the King’s Fund making the case for management should lend weight to the argument.

But will it make a difference? This is not just an issue of self-protection for managers. As the HFMA argued in its evidence to the commission, a reduction in management or ‘back office’ could in practice be a false economy. ‘For example, a reduction in back-office services may mean that clinicians are denied the right data to improve pathways or fail to be challenged on eliminating avoidable variation in clinical practice,’  it said.

The association called for the emphasis to be on achieving the right level of management and support so that the service as a whole delivers enhanced services and value – focusing on the output of improved care  rather than the simplistic input of increased front line staff.

Is the health secretary listening? Andrew Lansley, speaking at the King’s Fund report launch, trotted out the right sentiment.

‘Just so there is no confusion,’ he said, ‘I know that high-quality managers are essential to the effective and efficient running of the NHS. But he went on to say: ‘It’s time politicians and managers handed the controls over to the people who really understand the needs of patients and how to serve them best – clinicians.’ Hardly a ringing endorsement of the role and value of the non-clinical manager.

Making the management numbers add up

• The definition of a manager and how they are counted in different surveys and returns makes an accurate assessment of their numbers and costs difficult, as the following statistics show: