Monitor’s new chair Steve Bundred wants to put the gladiatorial era of his predecessor behind him and usher in a new spirit of co-operation. Endless battles with the Department of Health are out; faith in the health secretary is in, he tells Dave West

New Monitor chair Steve Bundred will be a very different figurehead from his predecessor.

Maintaining the independence of this organisation is absolutely vital but my experience is that it can be independent without being either supine or confrontational - and that’s where I want to be

His interview for the job, which he began a month ago, touched on what HSJ has described as the famously tempestuous relationship between Bill Moyes, executive chair for six years until January, and the Department of Health.

Mr Bundred says: “My own view - and I said this - is that ‘famously tempestuous’ is not the kind of relationship an organisation like Monitor should have with the department.”

In his previous role as Audit Commission chief executive, Mr Bundred was able to be frank with ministers, telling them “their flagship policies were wrong”, without developing such “relationship difficulties”, he says.

“Maintaining the independence of this organisation is absolutely vital but my experience is that it can be independent without being either supine or confrontational - and that’s where I want to be.”

Much of the past friction has come from Mr Moyes acting as a cheerleader for foundations - both encouraging them to embrace their freedom while openly fending off perceived enemies, whether ministers or civil servants.

Mr Bundred recognises that some FTs find the NHS executive - having given them independence - still tries to control their affairs. But he says cheerleading is not Monitor’s place: “That’s a job for the Foundation Trust Network.”

His solution to the dilemma - perhaps conveniently - is Andrew Lansley, the new health secretary. “It’s fair to say that under the previous government ministers did blow hot and cold - there was a lot of ministerial churn. David Cameron has said there will be less - I think that should be applauded.

“And in Andrew Lansley not only have we got someone who knows the NHS inside out, we’ve also got someone who absolutely believes in foundation trusts and in devolution. If it was the case that civil servants were getting mixed messages previously, I don’t believe that will continue to be the case.”

He clearly shares none of his predecessor’s disdain for DH civil service culture and, further setting himself apart from Mr Moyes’ executive chair role, says he is “very determinedly non-executive”.

Thrived and prospered

Mr Bundred seems to be gambling that the strength of Mr Lansley’s plans, in which Mr Moyes’ influence continues to loom large, will give Monitor cover to be less aggressive while still achieving reform.

He is a believer in the FT model and, as if to prove it, has his own proposal for extending their freedoms. The idea - separating foundations’ assets and liabilities from the state, thereby taking them off the public sector balance sheet - could be a significant step, if it wins the ministerial interest he hopes for. It reflects his background in the pragmatism of public sector accountancy - and it seems likely to appeal to the Treasury - but Mr Bundred sells it as FT-promoting independence. “The interest the DH and NHS continue to show in the detailed activities of foundation trusts isn’t irrational. As long as spending by FTs counts against departmental expenditure limits, of course they’re going to show an interest.”

His model for the change is higher education, where he has experience in regulation and as deputy pro-chancellor of City University. The 1992 Further and Higher Education Act separated polytechnics from local authorities, “at the stroke of a pen”, he says. “Many of them made great use of that freedom and have thrived and prospered ever since.”

Notwithstanding his different approach, Mr Bundred says he has “quite a lot of respect” for Bill Moyes, and also credits the regulator’s chief operating officer Stephen Hay, particularly for their part in improving NHS financial management.

Foundations are unlikely to see a let-up in Monitor’s rigorous approach to finance from the man who, in his last guise, made waves by bringing the word “Armageddon” into the debate about the UK’s budget deficit.

Mr Bundred praises Monitor’s decisive use of its powers over stumbling foundations. This has become a fairly regular occurrence thanks to the early impact of investment cuts and a heightened focus on care quality since events at Mid Staffordshire Foundation Trust.

Mr Bundred says: “Any FT that imagines there will be any kind of relaxation in our current approach as a consequence of our thinking about the future is mistaken. We are very alert to the fact that - although the government has promised to protect spending on the NHS - such are the demand pressures that money will undoubtedly get tighter in the health service, and that will have an impact on FTs.”

But he is aware of the precariousness of balancing the “day job” with overseeing the Monitor transformation planned by Mr Lansley (see box). He is already knee deep in consideration about the change, despite, he says, having little more information from ministers than the rest of us. His approach to it, in general, is that he is ready to oblige. Monitor’s “exceptional” staff, he says, “view the prospect with genuine excitement”.

The regulator has looked at the potential conflict between the tariff setting and competition regulation powers it is likely to take on. Mr Bundred believes it can be resolved if needed through “a clear separation of roles and responsibilities”.

Monitor would even be willing to help convert the remaining 100-odd trusts to foundations, while acknowledging there could be “a degree of conflict” with its job as authoriser or licensor.

“We’re not staking a claim for [that role], not at all, but there is a discussion with the DH to be had about what steps it can take to ensure the remaining trusts come forward.”

Risk of capture

Mr Bundred suggests three adjustments - making foundation status more attractive; support for trusts to get there; and making it “a bit more uncomfortable” for trusts that have not made it yet. He has adopted the estimate that around a third of those will not become foundations in present form so need “other solutions”.

He believes Andrew Lansley will want to move quickly, and does not shrink from the potential start point of April 2012 for the new system. So an independent future for those 30 or so trusts is rapidly moving from uncertain to very unlikely.

Mr Bundred’s own position could also be time limited. Monitor itself will consider if the new role warrants a change in “size or composition of our board”. He says: “If we believe there should be, obviously we will make our view known to the department.” Is he satisfied to see his place as a caretaker, until a new board arrives? “I’m happy to do whatever I can to make the best of these arrangements.”

An irony of the transition is that, in moving to what should be greater separation, Monitor and the DH will have to embrace each other more closely than ever. The regulator doesn’t have the power to shape its future role or to start getting stuck into its new functions alone.

Senior members of its team are therefore working with the DH and may even be seconded to the department. In the eyes of Monitor’s loudest cheerleaders this will mean a real risk of capture by that culture so resisted by Bill Moyes.

Is Mr Bundred confident Monitor’s independence and future role is safe? Will Westminster-serving officials, used to running things their way, really let the power go? Again his answer rests on the new secretary of state.

  • “Andrew Lansley hasn’t spent six years thinking about these issues in order to become secretary of state then be half-hearted about it,” he says. “His commitment to a devolved health service is unquestionable.”

Many observers will hope Mr Bundred - while not wanting his disputes to end up in print - will seek to hold the government to its word.

Monitor’s prospects

The coalition has committed to “develop Monitor into an economic regulator that will oversee aspects of access, competition and price-setting in the NHS”.

The Conservatives’ 2007 white paper said this would include:

  • a duty to promote competition, wherever practicable, to achieve effective competition between NHS and independent sector providers;
  • a duty to promote safety, quality, efficiency and sufficient supply of health professionals;
  • a duty to secure universal access - including maintaining minimum services where providers fail;
  • an ability to set the NHS tariff - based on costs of the most efficient, not the average, with providers able to offer “discounts”;
  • promotion of foundation trust freedoms;
  • licensing of all providers - but not where sufficiently covered by professional regulation, such as primary care;
  • promotion of more market-based mechanisms for securing capital for foundations