With management levels cut dangerously low in the health service, the NHS Confederation’s chief executive Mike Farrar tells HSJ’s Charlotte Santry the days of biting tongues when dealing with those in power are definitely over.

Cuts have left the NHS struggling with “dangerous” levels of management and “perilously close” to being unable to deliver the challenges of reform, says NHS Confederation chief executive Mike Farrar.

If the reduction in management numbers continues unchecked, quality of care will suffer and the NHS will lose its competitive advantage over private sector healthcare providers, argues the man who took the confederation’s top job in May.

Current management levels are already “quite dangerous”, he says, highlighting the fact that even top doctors need someone to co-ordinate resources and adding that the scale of the management cull leaves colleagues in foreign healthcare systems “staggered”.

The former NHS North West chief executive speaks about the cuts in emotive terms, but he plans to convince politicians of his case using cold, hard facts. 

“We should be very clear about bottom lines in terms of how much money you can take out in management,” he says.

“If you look at the OECD countries… we’re in the bottom quartile in terms of the amount of management costs per unit of healthcare.” Reducing this by 46 per cent, as the NHS has been told to do by 2013-14, “takes us down to the bottom”.

Asked whether it might be possible to devise a staffing ratio for managers, similar to those used to calculate how many nurses and midwives are needed for a set number of patients, Mr Farrar says: “We’ve not gone down that road yet. But there’s a risk that we’re hitting numbers now that are going to get so low that we might [need to] bring back a mathematical argument about why that would be inappropriate.”

The suggestion that the NHS has relatively modest management costs is borne out by the King’s Fund study published last month. This showed that, despite the furore about excessive numbers of NHS managers, they made up just 2 per cent of the NHS workforce in 1999, rising only slightly to 3 per cent in 2009.

Head-on battle 

These figures are now tumbling, with recent Information Centre statistics revealing there were 2,770 fewer managers in 2010 than the previous year. And this was before voluntary redundancy schemes and tough savings plans for 2010-11 had fully kicked in.

The King’s Fund’s findings seem to have fallen beneath the radar of prime minister David Cameron, who used a major speech on the NHS at the beginning of this month to attack the “empty bureaucracy” wasting taxpayers’ money.

But is the confederation’s ability to openly disagree with government undermined by its current business model? The Department of Health provides most of its funding through its contract with confederation off-shoot NHS Employers.

Mr Farrar agrees independence has been a problem in the past. “I think one of the issues for the Confed historically has been that it’s probably been slightly more anodyne on points than it would otherwise have wanted to be. Sometimes in trying to balance the interests of the different networks, it’s gone for a lowest common denominator view and also it’s been conscious of the fact that ultimately its money comes via the state, even if it’s only from membership [of NHS organisations].

“I think we have to take that head on. Speaking truth to power is always difficult but it’s absolutely essential if you’re going to be sustainable and have a long-term future.”

He wants the organisation to diversify its revenue streams by becoming a “conduit” for businesses supplying goods and services to meet budget-holding managers. Under his vision, pharmaceutical companies and firms selling medical devices would pay for access to NHS organisations, which he hopes will help the NHS to spread best practice.

Referring obliquely to the need for the confederation to distance itself from its previous financial and managerial irregularities, exposed in HSJ last year, he said: “We’re absolutely mindful of due probity – the NHS Confed can’t be tarnished with any of those issues.

“But actually I think there are ways we can develop those relationships [with suppliers] to everyone’s benefit entirely within our charitable purpose.”

Mr Farrar has already proved he can work effectively behind the scenes to gain traction on NHS policies to which the bulk of his members are opposed. From watering down the language around competition, to asserting the health secretary’s accountability, to slowing the pace of change, the government’s official response to the NHS Forum report has taken on board many of the concerns raised by the confederation, among other groups, over recent months.

But he now wants assurance that the NHS Commissioning Board will devolve power to the new clinical commissioning groups as soon as possible and plans to “put a lot of pressure into the system”, including taking on the board and politicians directly if necessary.

He also wants to maintain the “heat under people’s feet” when it comes to trusts achieving foundation status. The blanket deadline of April 2014 for every trust becoming a foundation has been replaced by a requirement that it must be “clinically feasible” for aspirants to make the transition. Mr Farrar, nonetheless, wants to see “clear end points” for the process for each trust.

He says that deals struck “in a national context” with private contractors and financiers might ease the burden of aspirant FTs struggling with expensive private finance initiative schemes.

However, he adds: “We will never be a place that tries to defend the indefensible. If it is poor management [preventing a trust from reaching FT status], whether it’s a quality problem or a financial problem, we wouldn’t defend that.”

Mr Farrar plans to lobby for the NHS to be involved in the design of the new “sector regulator”. He says a clearer explanation is needed of how Monitor will manage the potential conflict of interests arising from the decision to extend its responsibility for the foundation trust compliance regime to cover all authorised trusts until 2016. Further details are also needed regarding how the Chinese wall between Monitor and the work of the Co-operation and Competition Panel will operate, he says.

Step up to the plate

“We’re in a better place now than we were at the beginning of the pause [in the passage of the Health and Social Care Bill],” he states. “We still have strong support for some of the principles [of the health bill]. But there’s still some desire to get under the skin of that and say: ‘Can we make this work?’”

Decisions over the future of the confederation’s networks are still evolving. Foundation trust network members will retain their confederation membership until next April, after which they will set off on their own. The mental health network will continue to represent the sector’s FTs as well, but will keep its remit narrowly focused on issues affecting mental health to avoid duplication.

However, the way in which the confederation changes its structures to reflect the shift to clinical commissioning groups is less clear-cut. Mr Farrar has been talking to the Royal College of GPs, the NHS Alliance, the British Medical Association and the National Association of Primary Care about what it can offer to doctors. He says: “What we’re really talking about here is professional development in the context of management leadership roles.

“I’d like to describe the future for the Confed as being about management and leadership, irrespective of whether those managers and leaders are from an administrative background or a clinical background,” he adds. “You will see over the coming year much stronger clinical engagement and clinical drive from the confederation.”

Community services will also be given the opportunity to form a network. “They’re absolutely critical and their voice has always been quite low,” Mr Farrar says.

He also wants the confederation to inspire NHS leaders to stay motivated and improve their performance. As a former semi-professional footballer and cricketer who was appointed national sport and health tsar in 2009, it is unsurprising he feels there is much to learn from those preparing for the 2012 Olympics.

Referring to the British Cycling team, he says: “At the moment they’re all getting themselves fit, they’re setting standards that are nothing about external pressure, they’re all internally generated standards – they’ve benchmarked themselves against the best in the world.

“Their approach should be our approach… We need really good people to stand up and say: This is doable, this is why we came into the job, no-one said it’d be easy but this is where we step up to the plate’. We should be inspiring our members to think they can do it… I’m sounding very Californian and I don’t mean to – I’m from Rochdale.”