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Published: 05/02/2004, Volume II4, No. 5891 Page 10 11 12

As the first chief executive of a franchised trust loses his job, has the scheme died a death or transformed itself into a more viable process? Laura Donnelly reports

Two years ago, then health secretary Alan Milburn announced two controversial policies designed to open up new freedoms to NHS managers.

The first, foundation hospitals, will soon become reality. So what has become of franchising, the other contentious policy revealed in that speech to the New Health Network in January 2002?

At the time, Mr Milburn made some big claims about the way franchising would see failing trusts taken over by successful NHS management teams or by the private sector. Indeed, in time, it was 'possible to imagine a number of local health organisations all being run by a single team of successful public service entrepreneurs'.

Two years on, imagining this is really quite difficult. Since the policy was trailed, just seven 'failing' trusts have been put out to franchise.And they were all announced in the initiative's first flush of youth. HSJ revealed last month that none of the current zero-star trusts have been put out to franchise, and are not expected to be.

Nor were any primary care trusts put out to franchise this year.

It gets worse.Two weeks ago, Paul O Connor, chief executive at one of the first wave of four franchisees, was apparently forced out of his job at Barnet and Chase Farm Hospitals trust. North Central London strategic health authority said he had left to take up 'other [unspecified] opportunities in the health service'. Subsequently an SHA spokesperson said his departure was linked to a range of performance issues, and the trust appears at risk of losing its sole star.

So is a policy which promised so much already, as another franchisee puts it, 'past its sell-by date'? If the initiative has fallen out of political favour, what does that mean for the handful of NHS managers who are still officially running trusts under the policy?

Nick Carver took on a franchise to run zero-star East and North Hertfordshire trust in November 2002. On his second day there he was told there were several hundred more patients on the waiting list than official figures suggested.

Since then, the trust has set out an action plan to tackle performance and last summer it got one star.

So far, so good. But to what extent can the improvements at East and North Hertfordshire be directly attributed to the franchising process?

'I do not wake up in the morning thinking 'I am a franchise holder'', admits Mr Carver. 'But I do think there was a benefit in the franchise in that it suggested to the trusts and to the wider community that the trust had failed and had to change - that not to change wasn't an option.'

For Mr Carver, the strength of franchising came at the start of his appointment: in the robust nature of its recruitment process and in the message it sent out that the trust was 'under new management' and taking a new direction.

'I think most members of the public wouldn't be able to define franchising - I am not sure most managers would - but I think there is a perception that we are doing things differently and that we took the problem seriously.'

He suggests that the way the process forced him to take stock of the organisation before he got the job in order to produce a franchise plan gave him a head start on most newly recruited chief executives.

'The franchise plan was an assessment of the organisation - it has since been refined and changed. But it set out our modus operandi.'

Alan Bedford agrees. He took on a franchise at zero-star Portsmouth Hospitals trust in May 2002.

He believes the£20,000 he and other franchise applicants were given to work on their applications meant they came up with plans for change that were 'far more thorough and detailed than a common- or-garden business plan'.

The trust now has two stars, and Mr Bedford plans to stay in post until next year, when his threeyear plan is up.

But he cannot see much of a relationship between his job as a chief executive running an acute trust and the concept of franchising as it was launched.

'[Franchising] has given a lot of focus to trusts in difficulty, and it has gone out of its way to take the recruitment process seriously. But whether the models have been proved to work is another matter.

'Just asking one person to go in and calling it a franchise - that has to be questioned.'

He describes two different models of franchising. There are those, like his own, which involve sending an individual chief executive from a three-star trust to tackle a zerostar trust.

Mr Bedford believes this compares unfavourably with 'apprentice systems' such as that tried in Ashford and St Peter's Hospital trust, where a 'mentor' chief executive from then three-star Frimley Park Hospitals trust was sent in to improve performance.

But it is also questionable whether this system is working as it was truly envisaged.

Frimley Park chief executive Andrew Morris ran zero-star Ashford and St Peter's for a year while mentoring chief executivedesignate Glenn Douglas. Mr Morris returned to his permanent role at Frimley Park in April 2003.

Three months later it lost a star.

And Mr Douglas suggests that franchising was a short-term policy rather than a long-term solution.

He says: 'Franchising seems to be in the past for us. We have moved on.' But although the trust has some financial difficulties, he believes it has stabilised its position and says it is achieving, or ahead of, NHS plan targets.

Meanwhile, it appears that when a trust's difficulties are really severe, franchised management cannot handle it. Or that is what Avon, Gloucestershire and Wiltshire SHA appears to think.

Last year, it abandoned plans to franchise the management of zerostar Royal United Hospitals Bath trust and United Bristol Healthcare trust because of the 'severity of the financial pressures facing the health community and the management action required to achieve recovery'.

So is this the end of the road for the policy, which one manager describes as 'made up in the back of a taxi'?

NHS Confederation policy director Nigel Edwards appears to think so. More fundamentally, he believes ministers should take a long hard look at their expectations when they send one individual in to 'turn around' a failing enterprise.

He questions the macho tendency to presume that 'heroic leadership' is the solution to endemic problems.

'You need to put the whole team in. If you are trying to turn around an organisation, a chief executive is not enough.'

Mr Edwards believes that while franchising is a logical response to deal with a trust in need of 'a lot of management grip' it is not an appropriate response to deal with a permanently failing organisations in need of major culture change.

He also questions the way the NHS' treats its 'bright young people' by allowing them to have their first experiences at chief executive level at a zero-star trust with intractable problems.

Paul O Connor was in his first post as chief executive until he was forced to step down from Barnet and Chase Farm two weeks ago.

And Mr Edwards poses this question: 'We have to ask ourselves: is this how the NHS treats its bright and capable people? Is this the best we can do?'

A case in point: 'I do not honestly think i took my eye off the ball'

The franchising model applied to zero-star Dartford and Gravesham trust looks like a success story. It also appears to demonstrate the political importance attached to the policy - and some of the difficulties for a chief executive running two trusts in tandem.

Chief executive of three-star Basildon and Thurrock University Hospitals trust Sue Jennings took on a parallel role running Dartford and Gravesham in November 2001.

The trust has seen incredible improvements in performance, and now has three stars.

But was the focus on improving the situation in Dartford to blame for a drop-off in performance in Basildon? And was the political difficulty of such a consequence of franchising a factor in one of the ministerial interventions in the star-ratings of 2002, as revealed by HSJ in December (news, pages 35,18 December 2003)? Former health secretary Alan Milburn has declined to answer questions on the specific reasons for changes to the 2002 ratings.

On the former, Ms Jennings insists she never took her 'eye off the ball'at Basildon.

Basildon was one of the trusts in 2002 for which changes to star-ratings were specifically 'requested'by the health secretary, according to leaked e-mails seen by HSJ.

A civil servant working in Mr Milburn's office warned that the trust had a 'very poor performance in the patient focus area including, in particular, the patient survey.

'We are checking the figures, but assuming they are correct the trust has one of the poorest results of any on the survey.'

In a draft of the ratings printed less than two weeks before they were published, the trust had only been awarded two stars.

When the final awards were made, it was given three.

Ms Jennings says 'it was a bit of a surprise' to read in HSJ about ministerial interventions in the rating of Basildon in 2002.

She stresses that the risk that performance at Basildon would be affected by the difficulties of running two trusts 'was always my biggest concern'.

Acknowledging that Basildon struggled on its patient focus indicators in 2002, she says: 'I do not honestly think that it was because I took my eye off the ball at Basildon.Patient focus has always been an issue for us, with problems of overcrowding in accident and emergency.'

She says that the impossibility of predicting performance on performance indicators measured as part of the balanced scorecard meant that although she is aware that 'we had some work to do in that area' she had always expected the trust to retain its three stars.

In October 2003 Ms Jennings stopped running both trusts.

She points out this was always part of the franchise plan, although the timing had been left open.Her deputy chief executive in Basildon, Alan Whittle, took up the substantive role in Basildon and she continues to run Dartford.

For Ms Jennings, the franchise model she has been part of has been a success story, even if the F-word itself is a bit of a misnomer.

She says it offered the opportunities for staff to work across both trusts, and to learn from each other: 'What we are doing here doesn't meet the dictionary definition of franchising. I call it partnership working for learning. It is not a takeover, not a merger, there is no need for all these threats.For us it was about staff at all levels working together.'