Health and Social Care Committee 

Oral evidence: Kark report on the “fit and proper person test”, HC 1972

Tuesday 12 March 2019

Ordered by the House of Commons to be published on 12 March 2019.

Watch the meeting

Members present: Dr Sarah Wollaston (Chair); Rosie Cooper; Dr Philippa Whitford; Dr Paul Williams.

Questions 1 - 116

Witnesses

I: Tom Kark QC, Author of the Fit and Proper Person Test report; and Jane Russell, Barrister and co-Author of the Fit and Proper Person Test report.

II: Baroness Dido Harding, Chair, NHS Improvement; and Professor Ted Baker, Chief Inspector of Hospitals, Care Quality Commission.

Examination of witnesses

Witnesses: Tom Kark and Jane Russell.

Q1                Chair: Good afternoon. Thank you both for coming to the Health Committee today to discuss the report in your name, Tom Kark. For those who are new to this, could you both introduce yourselves and the role you played in the report?

Tom Kark: My name is Tom Kark. I have spent quite a lot of time as a lawyer dealing with regulatory issues. I was asked by the Minister of State to look into whether the FPPT was working effectively.

Q2                Chair: The fit and proper person test.

Tom Kark: I am sorry; the fit and proper person test.

Jane Russell: My name is Jane Russell. I am an employment barrister. I specialise in equality and whistleblowing law. I assisted Tom with the report; I am a co-author of it.

Q3                Rosie Cooper: I want to start by asking a very broad question. This whole thing has been going on for 18 or 19 years. Everyone agrees that we need regulation in this area, but it has never happened; it has been kicked down the road so often. You have produced a report. Were you happy with your terms of reference? Do you feel that you were sufficiently resourced, and how much do you think the Government are committed to your recommendations?

Tom Kark: The terms of reference were wide enough, and I had the opportunity of asking for them to be changed if I needed to. I did not feel there was a need. Resourcing was fine, although we did have to do it quite quickly. Some people expected a full inquiry. This was much more of a rapid review, because we were asked to turn it around in the autumn. Effectively, we had about three months, so it had its limitations.

As far as the Government response is concerned, as you will have read, we presented it as a package of measures, certainly in relation to the five main recommendations we made. We felt very much that they were interlinked. The Government have not, as we understand it, rejected any of them. They have accepted two, which we understand will be taken forward. The first is the defined competencies and the second is the centralised database. We understand that Dido Harding and NHSI and the workforce group—I do not know what it is called—will be taking on board the other recommendations and considering them. We thought they were a package that came together, and we hope they will eventually come together.

Q4                Rosie Cooper: Are you disappointed with the Government’s reaction?

Tom Kark: I am not disappointed yet, because Dido Harding and her committee have not yet decided what to do. I might eventually be disappointed, but I hope they will go ahead with each of the five recommendations.

Q5                Rosie Cooper: It has been around for 18 years. Did you meet any whistleblowers?

Tom Kark: Yes.

Q6                Rosie Cooper: Do you think they will be disappointed in the reaction of the Government and will fear that this is just another can rolling down the road away from them?

Tom Kark: I do not think it is for me to speak on their behalf. We met a number of whistleblowers. We met two groups of whistleblowers and also attended a seminar at the National Guardian’s Office where we spoke to a number of whistleblowers. We received quite a lot of information from whistleblowers. They may be disappointed with our report, in the sense that we have not gone further. I absolutely understand that there was quite a push for us to recommend setting up a full-blown regulator of directors, with accreditation and all that comes with it. We resisted that. I am happy to expand on why we resisted it.

We went as far as we felt we should, given the competing tensions between the dearth of people who want to do the job of being a senior director in the NHS, the problem that if you set up a full-blown regulator there is a danger of taking away responsibility from the employing trust, and the need to make sure that you can take badly-behaved directors out of the system, which we tried to address through recommendation 5 and the health directors’ standards council. Will they be disappointed? Yes, I expect so.

Jane Russell: There is general disappointment among whistleblowers and others about the protection afforded by the whistleblowing legislation itself. That is a wider issue and a wider source of disappointment. The complaint made is that the legislation is too narrow and does not give enough protection, and that it too should be a source of wholesale reform.

Q7                Rosie Cooper: I absolutely understand that. Did you look at regulatory systems other than just the financial one? What was your thinking behind that? I would like you to address the fact that it is not just taking away employer responsibility, because in the situation of Liverpool Community Health NHS Trust the employer was absolutely at fault, and the board itself, other than one non-exec, did not give evidence to Kirkup, so it was morally corrupt from the outset. How do any of those things move the agenda on? So many people are willing the Department of Health to make a difference.

Tom Kark: First, did we look at other regulators? Chapter 11 of the report deals specifically with the other regulators we spoke to. We spoke to the GMC, the Professional Standards Authority and the Teaching Regulation Agency. In fact, we adopted the Teaching Regulation Agency’s model, because they do very much the same thing. They leave the employer to be responsible and they only come into it when there is some seriously bad behaviour and they need to take somebody out of the system.

I take your point about where there is a bad trust. I think most seasoned regulators would say that you cannot change culture by regulation. We had meetings with Harry Cayton, who has now moved on to other things.

Q8                Rosie Cooper: You could give them a giant magnifying glass so that they could spot it. That would always help.

Tom Kark: When you are talking about having a full-on regulator, one first has to ask whether there is Government appetite—I know there is in some quarters—to set up a full-blown regulator. That is one issue. A full-blown regulator would require things like accreditation of every single director. You might then look at revalidation of every single director. There are lots of good trusts out there and some, unfortunately, not so good trusts, as you know. There is a great danger that a trust will say, “Thank goodness for that. We’ve now got a regulator in charge and they are responsible for our directors.” That is one of the tensions. Almost everyone we spoke to said, “You must try to keep the responsibility for whom they employ with the employer,” so I am afraid that was where we ended up.

Q9                Rosie Cooper: There are bits of that I disagree with.

Tom Kark: I understand.

Q10            Rosie Cooper: I will not waste time doing that today. How do you feel that your recommendations promote an open and just culture? How do you measure the values of those directors?

Jane Russell: From the leadership. It has to be top down. The information providers we spoke to were very keen that culture comes from leadership, and that is why our first recommendation is about competencies and training, getting board directors in to learn about leadership. For example, if they have spent their entire careers as nurses or doctors, they will know about that but they will not know how to look at a financial statement. On the other hand, you might have somebody from Tesco who is brilliant in business but does not know the first thing about what a serious adverse incident is. It is really important that education is prioritised, and I think that the culture from leadership is key.

Tom Kark: There is also the issue about keeping a sensible record and data about what each of the directors has done in their lives in the health service. We felt there was an astonishing lack of information about who is running which trust and what they have done. Who is the chief operating officer? Who is the chief financial officer? What have they done? How do you assess whether they are qualified and competent? When I first walked into the Department, I said, “Could we please have a list of every director and chief exec running a trust?” The answer was no.

Jane Russell: There are only about 3,000, and 227 or 229 trusts. That is your mirror. The mirror is the database. The non-vanilla references—the proper references—are holding a mirror up to the organisation, because knowledge is power. That is more information that will follow people around the system, so they cannot escape from it.

Q11            Rosie Cooper: Do you think the fit and proper person test should be transparent? Do you think you can have a fit and proper person test that is held in secret? I can tell you that, for example, Tom Jackson at Dudley got his reference not from the organisation but from a fellow member of the board who was then acting as chair because the chief executive and finance director had been removed. He got a fellow member of the board to give him a reference. I queried that. We are now almost in a stand-off with the CQC and Ellen Armistead, who is being particularly difficult. You cannot challenge whether a person is appropriate and has passed the fit and proper person test if the test is held in secret. Where is the transparency?

Tom Kark: I get that. There are two things that our recommendations might help with. I do not know that specific case and I do not want to talk about individuals. First, if the individual does not have the set of competencies, they should not be appointed; they cannot be a fit and proper person. Secondly, our third recommendation, which we are very keen on, is the mandatory reference.

Q12            Rosie Cooper: We will come to that later.

Tom Kark: Forget vanilla references that say, “X has worked here from X date to Y date and they have not been dishonest.” A mandatory reference will give you proper information about that person’s history.

Q13            Rosie Cooper: In this particular case, the chief exec and the finance director of Liverpool CCG were required by the Department of Health to leave. The finance director got a job at a higher rate of pay as finance director of an FT, and this is where we are. How can that be? I appreciate you do not know the details—

Tom Kark: It is not for me to—

Q14            Rosie Cooper: I am putting it on the record: how can that be?

Tom Kark: I completely understand the frustration. I referred to our recommendations 1, 2 and 3. Our fifth recommendation is that, if somebody has seriously misconducted themselves, they should be taken off the road.

Jane Russell: If the problem you are referring to could be more generally described as the problem of the revolving door, we think our recommendations would stop it. Directors who are reckless or unscrupulous would be filtered out of the system through the health directors’ standards council, plus all the other recommendations about information, databases and references. We think that fixes the problem.

Q15            Rosie Cooper: It is especially important when NHSI, the TDA and other organisations are the very proponent of moving those staff around.

Tom Kark: I expect we will come to that.

Q16            Dr Williams: I would like to understand your recommendations in the context of how widespread the problem is. You said there are about 3,000 trust directors in the country. Are there three who are not fit and proper people? Are there 30? Are there 300? What is the magnitude of the problem?

Tom Kark: That is difficult to assess. All I can tell you is that I was counsel to the Mid Staffs inquiry by Sir Robert Francis. There were many problems, but the essence was a non-functioning board. There was a series of issues, but among all of them was a board that was not functioning properly. They did not know what they should have been doing; there was insufficient challenge to the board; the non-exec directors were not challenging as they should; and they were all aiming for foundation trust status. You have heard this again and again. There was a big cost improvement plan and they completely lost sight of the patients.

What happened next? Liverpool. You have read Bill Kirkup’s report. It is almost a mirror image on a slightly smaller scale. The management completely lost focus on what they ought to do. If you read the Morecambe Bay report, there was a loss of focus there. I cannot tell you how many directors there are, but those are three trusts we know about where things have gone very seriously wrong for patients because of loss of focus by the board. That must mean that there was significant incompetence among those boards. I cannot give you a figure.

Q17            Dr Williams: You can see why it is quite an important question.

Jane Russell: It is an excellent question.

Q18            Dr Williams: The response has to be proportionate to the problem.

Jane Russell: We do not know how big the problem is because there is no central database. In order to assess the scale of the problem we need proper information. There is no proper information, and that is why we have recommended that proper information be held so that we can assess the very question you are talking about.

Tom Kark: Most of this is not just about bad boards; it is about improving boards—the whole idea of getting some sort of level and setting competencies. The chief executives we spoke to—I will not name names, but some of them are extremely well known and absolutely excellent at their job—all said, “We wouldn’t mind some extra training; it wouldn’t do us any harm at all.” It is important not to focus on recommendation 5, which is all about knocking people off the system, because we very much hope it will not often have to be used, but there are people who need assistance, and the slightly less than competent who can be rehabilitated with training.

Q19            Dr Williams: One can think of this in some ways almost as a prevention intervention, to prevent bad boards rather than—

Tom Kark: And increase competence.

Jane Russell: That is our focus.

Q20            Dr Williams: How will creating a core competencies list address some of the issues around culture, judgment and behaviour?

Tom Kark: At the moment, part of the test is about competence and qualifications to do the particular task. One of the problems is that that becomes very much a sliding scale, depending on the need of a particular trust to find a new director. An excellent teaching hospital, whether it is in London, Manchester or anywhere else, will have lots of people queueing up to get those jobs, I imagine. If you are not a central teaching hospital and you are out in the sticks, again without naming any trust, the question of the competency of the director you are thinking of employing becomes a sliding scale, and that is a real problem.

There is also the problem that one of the reasons for setting benchmark competencies is to encourage diversity. What we heard is that at the moment it is very much a nudge and Buggins’s turn. Obviously, that will not happen in a good trust. A good trust will take its employment responsibilities extremely seriously, but, unless you have something to aim for, how does somebody outside the system get the training to become competent and put themselves forward for a director’s job?

Q21            Dr Williams: Do you think this might incentivise aspiring directors, because they will know what they need to aspire to?

Tom Kark: That is absolutely what it is aimed at. We are not the first to say it. Lord Rose said it and the King’s Fund has said it. Lots of people have said, “Devise some competencies.” It just has not been done so far. I know the academy is looking at it. There are lots of courses where training can be had, but at the moment the competencies required are not identified, and we think that will help enormously.

Jane Russell: We feel that, if you want to change behaviour, you have to change leadership behaviours. Changing workforce behaviours flows from changing leadership behaviours. You can change leadership behaviours by training, and by modelling best practice on whistleblowing and speaking up, and having a top-down culture, so that there is a safe space for people to speak up about concerns. It is about modelling respect and diversity. We were told by some of our information providers that all those things need to be modelled from the top down. That is how you change culture.

Dr Williams: I couldn’t agree more.

Q22            Chair: Carrying on the point about whistleblowers, can I take you back to your previous comment, Jane Russell, about having proper information? One of the ways we need to encourage proper information is through whistleblowers. One of my constituents raised her complaint with the CQC. It was covered by the Parliamentary and Health Service Ombudsman’s report. May I quote from her evidence? “I have watched the nemeses of my whistleblowing be recycled and welcomed back into the bosom of the NHS family, and in the case of Paula Vasco-Knight it was only her subsequent fraud that ended her NHS employment.” As you know from the report, she was deeply disappointed about the way her case was handled. I would like to ask on her behalf what you make of the findings of the ombudsman’s report, because there was some disappointment that it was not specifically referred to.

Tom Kark: The ombudsman’s report came out a month after we delivered our report. Ours was not published until February, but it was in the Department in November. I am afraid, therefore, that the PHSO’s report was not part of it.

Q23            Chair: That is the sole reason.

Tom Kark: Yes.

Q24            Chair: At this stage would you like to put on record what you feel about that report?

Tom Kark: It was drawn to our attention, obviously. I know that Ted Baker from the CQC will be giving evidence to you later and no doubt you will ask him about it. We spoke to the whistleblower from whom that comes, as you probably know. Frankly, it is obvious that the CQC did not do a particularly good job in that case. If we had had the HDSC—the health directors’ standards council—available then, it would not have gone to the CQC to investigate at all. This is not being critical of the CQC, but they are not organised, frankly, to do that sort of investigation. I know they have a responsibility to do it, but even in that investigation they were process driven. They look at the processes of investigation by the trust instead of investigating what has happened.

Ted Baker may disagree with that, but there is a fundamental issue about asking an organisation like the CQC to do something that they are not cut out to do. It is a tribunal job, which it seems to us the CQC is ill equipped to undertake, and that is why we think you need a separate body, wherever you are going to site it. I know there is unhappiness about our suggestion of siting it in NHSI—we can talk about that—but there needs to be an independent tribunal that can look at complaints about that sort of serious misbehaviour, and the behaviour you are speaking about would undoubtedly have crossed our red lines.

Jane Russell: That was why we thought of the health directors’ standards council to fill the gap. At the moment, there is a void in regulating this sort of behaviour. I understand why that whistleblower is so disappointed. She took her case to the tribunal and her complaints about whistleblowing were well founded. Exactly as Tom says, that is precisely the behaviour we were thinking about when we made our recommendation about the establishment of the health directors’ standards council. We want to stop that behaviour.

Q25            Chair: You have listened loud and clear to the concerns raised by Clare Sardari and others during the course of this inquiry.

Tom Kark: Yes, absolutely.

Jane Russell: We did. I also read the judgment of the employment tribunal. I read very carefully what the judge said, and we have quoted in the report some of the remarks and some of the conclusions the judge came to.

Q26            Chair: Are you surprised by how relatively few whistleblowers there are in the NHS?

Tom Kark: We need to correct something. When we wrote that section of the report we were focusing on internal NHS whistleblowers and not taking into account those who had gone through the CQC. Apologies for that.

Q27            Chair: You would like to issue a clarification.

Tom Kark: In 2015, there were about 1,500 whistleblowers; the year before, there were about 9,000 whistleblowers, so there was a lot of NHS whistleblowing going on. We have to be careful when talking about whistleblowing because whistleblowing is a specific definition of an act. I think the NGO would want us to talk about speaking up.

Jane Russell: That is obviously a much broader category.

Q28            Chair: It is a failure of the system if someone has to be a whistleblower; there should be mechanisms in place for them to be heard well before we get to that stage.

Tom Kark: Exactly. Could I go back to that case? As you rightly say, the director concerned moved on to another job. One of the things we were very concerned to try to deal with, if we could, was the lack of information going from one trust to another. That is particularly affected by compromise agreements and non-disclosure agreements. I do not know whether you will come on to that, but it might well have been affected by that particular case.

If you have a mandatory reference, it does not matter what the compromise agreement says; it does not matter if there is an NDA. Someone we spoke to—I think she was a director of personnel—said: “That would be fantastic, because if I am trying to agree a compromise agreement with somebody, I can say to them, ‘We can agree your compromise agreement, but we can’t agree the reference.’” The reference has to honest and full.

Q29            Rosie Cooper: I was going to make that point about non-disclosure agreements. I also want to say on the record that the truth is that there are many people speaking up right across the NHS and they are not listened to. I understand that not every grievance or feeling of anger or being upset is real, but the majority are. You are not listened to. People are brave and become whistleblowers. For example, in LCH not one of the whistleblowers has ever suffered at any point because they gave evidence to me. Why? Because I treated it as if I was doing it. Nobody necessarily knew who they were, unless they said so themselves.

We get to the point where you are a whistleblower and the system works to get you out, and you have a non-disclosure agreement. How would the mandatory reference be enough to ensure that trusts get the appropriate information before employing a director? After all, technically the NHS does not do non‑disclosure agreements, but we know that quietly, under the table, it is going on everywhere.

Tom Kark: The mandatory reference idea is not novel. The Financial Conduct Authority imposed it a couple of years ago in relation to those it regulates. The idea is that the criteria that have to go into the mandatory reference form have to be designed cleverly enough to make sure that you find out real information about the person who is moving on. For instance, has the person been under disciplinary investigation? Is there any reason why you would not employ the person in a similar capacity in the future? There is a difficulty with unproved allegations. In our appendix, where we make a suggestion about what needs to go into the mandatory reference form, we said throughout that it should be proved disciplinary or tribunal findings.

Jane Russell: For example, upheld whistleblowing complaints.

Tom Kark: That needs careful thinking about. Quite often, there is low-level noise, as one might unfairly describe it—constant repetition that an individual is a bully or is harassing people, or whatever it is—and it is never proven. There is a tension there. I have no doubt the lawyers would get involved if there was an unfair mandatory reference. That needs careful thinking about, but the thinking behind the mandatory reference is to winkle out information lurking in the trust archives, as it were, and feed it into the next employment.

Jane Russell: It would be upheld disciplinaries, upheld grievances and upheld whistleblowing complaints. That would get at some of it.

Q30            Rosie Cooper: Exactly. That is easy because it is black and white.

Jane Russell: I know.

Q31            Rosie Cooper: On the transparency bit and the reality of where we are, I referred earlier to the chief exec and finance director of Liverpool CCG. After NHS England commissioned Deloittes to do a review, based on a question from me to the Prime Minister—about paying a non-exec director £105,000 a year—they were required to leave. That did not translate into a tribunal or whatever. They were not fired; they did not go through the disciplinary process. This is the NHS at work: now you see it, now you don’t; move over there; there’s the magic roundabout—hop off at the next stop and get a new job. How does this stop that?

Jane Russell: One of our recommendations is that the barring tribunal—the health directors’ standards council—has a separate route of referral from members of the public. It goes through a sift. That might capture the mischief you are talking about.

Q32            Rosie Cooper: But the NHS itself requires somebody to leave and then allows this to happen. How is that?

Jane Russell: It is difficult to comment on individual cases.

Tom Kark: I don’t think we can comment on that.

Q33            Rosie Cooper: I get that it is difficult, but it is on the record; it is fact.

Jane Russell: I see the mischief you are getting at. The mandatory reference would cover information that came to light about disciplinaries, grievances and whistleblowing complaints, but you are saying, “What if that process is circumvented so that there is nothing in black and white on any of these issues?”

Tom Kark: If you look at our recommendations, the sort of problem you are talking about is filtered all the way through. In terms of competencies, there is, “The importance of learning from whistleblowing and ‘speaking up’…Empowering staff to make autonomous decisions and raise concerns” and “Complying and encouraging compliance with the duty of candour.” The central database would include all relevant appraisals and 360‑degree reviews. That is the sort of place where low-level noise ought to come out, and that sits on the director’s record.

Jane Russell: Just in case it does not come out there, in our suggestion for a reference form, we have, “Any other information about the individual’s fitness and propriety.” Is there anything that would cause the author not to re-employ? That should flush out the unrecorded.

Q34            Rosie Cooper: Let us go back to the case of the chief exec and the finance director. They are not going to talk about themselves; I accept that the board should, but you have to incorporate NHS England and all these higher bodies. They have responsibility to feed into that too. How are you going to make them?

Tom Kark: Somebody has to sign off the person’s reference form.

Jane Russell: And that will be part of “well led.”

Q35            Rosie Cooper: I am going to stop there because we are going down a rabbit hole. The truth is that you are quite right; somebody has to sign off that reference, so you get another member of the board to do it. I read in your recommendations that it has to be at director level, but it could be another med; it could be a medical director.

Tom Kark: No. Our recommendation is that it has to be somebody covered by regulation 5. If they conceal relevant information, that would bring them into serious misconduct and the health directors’ standards council. I think you will find that people will now be much more cautious about signing off a dodgy reference. That is the idea anyway.

Jane Russell: We tried to think of all the circumventions.

Rosie Cooper: I have no doubt we will think of more.

Q36            Chair: Can I come to recommendation 4: extending the fit and proper person test to other settings? Obviously, people can be recycled not just within one system but out to arm’s length bodies: NHS England, NHSI and so forth. It is absolutely right that it should extend to all relevant sectors. How are you going to make sure that everyone is not judged against the same skillset? How would you envisage that happening?

Tom Kark: We dealt with that in the competencies section. One has to reflect that there are all sorts of different trusts. Running a large teaching hospital, for instance, will not need the same skillset as somebody running an ambulance trust, or a hospice or some other body.

Q37            Chair: Or indeed being a commissioner to a provider.

Tom Kark: Absolutely—or being a commissioner. I am afraid the answer is that people cleverer than us, who really know the system, have to devise the competencies for that particular role. It is not one set of competencies.

Chair: Thank you for being clear about that. Can we now come to recommendations 5 and 6?

Q38            Dr Whitford: I am focusing particularly on the standards council. During Paul’s questioning, you talked quite a lot about prevention and development. Considering the other regulators—as a doctor I am under the GMC—why would you want to have a database and standards council instead of a regulatory body that invests in young managers? Why wait until they are the boss of a huge hospital and then challenge them, rather than forming them when they first go into management?

Tom Kark: The GMC is slightly different, isn’t it? The GMC always had a role in education, but it was largely left to the deaneries and so on. Then the GMC came to have a bigger role and introduced revalidation and so on. That is a massive system. I do not know where you stand on revalidation. I would not ask. Some doctors think it is a complete waste of time. I think the recent survey they did was quite encouraging, in the sense that about a third of doctors thought it had changed their practice for the better.

What we have said about the idea of a health directors’ standards council is that it is the starting point. We think that at this point it should simply be to deal with serious professional misconduct, but we would leave the way open, if our ideas about competencies and a good database do not have the right effect, to extend the body’s powers, rather as the GMC’s powers have been extended. If you try to start off with a complete system, our sense is that there is not the appetite to do that. Getting a brand-new regulator off the ground would be extremely expensive and difficult, and would take a very long time.

Q39            Dr Whitford: Do you not think that the expense of Mid Staffs, Gosport, Liverpool and Morecambe Bay has been substantial?

Tom Kark: You know where I am coming from, Dr Whitford. Of course, I understand that.

Q40            Dr Whitford: I do not understand the argument for separating them. You will have the maintenance of a database to maintain competencies and the 360‑degree appraisal, but you will have another body, which is an enforcement body, in a totally different place. Why not put them together?

Tom Kark: They are doing completely different things. The disciplinary body is simply to deal with the seriously badly behaved.

Q41            Dr Whitford: But why would you want someone interacting at quite a junior management level—someone who is inherently bullying and it is coming out in their 360-degree appraisal? Do you not want to change that culture? I know that it says you cannot tackle judgment and cultural approach. Doctors are judged on that. A chief executive, as we have seen with Mid Staffs, can create much more havoc generally than one doctor and one team.

Tom Kark: They can.

Q42            Dr Whitford: Surely, we should be trying to lay down core principles as well as competencies. I would have thought a single body would be stronger.

Tom Kark: But what then happens to the responsibility of the trust board—the unitary board?

Q43            Dr Whitford: The trust board has the responsibility for employing me, but it is still able to look at the GMC and see that my GMC registration is up to date, that my appraisal and validation is up to date and that there are no official complaints. You have someone who specialises in that and is completely outside the CQC and NHSI, because that is one of the places where some of these people have moved and have moved back out. You have a body, whether it is based on teaching or the GMC, whose whole aim is to encourage people to go into management, and we invest in their training and principles and grow them up to being chief executives. They are not born at that level.

Tom Kark: The reality is that a regulator is very rarely seen in that context. If somebody is at a certain level in the hospital, or perhaps outside it, and is thinking about becoming a director of the trust, or they are being invited to become one, and you impose on that a full-blown regulator, they have to get accredited and so on; if they miss revalidation, they lose their licence and so on. It may affect that person in all other walks of life. Is that going to make the person more or less likely to want to be a director? The King’s Fund in its report last year identified that a third of trusts are missing at least one director. People do not want to do that job. You will have seen the quote that being a chief executive is like being given a lightning rod and told to go out and play in the storm.

Q44            Dr Whitford: That demonstrates even more the need to grow them. If someone in an industry outside knows that there is a ladder when they come in, because they understand finance, but they require clinical training and the ability to see that people are not widgets, which they may have been working with before, it would give them the confidence that they are clicking into a system.

Tom Kark: That is exactly what the competencies scheme is all about.

Q45            Dr Whitford: I just do not see the relevance of breaking them into separate bits. I still do not understand the model.

Tom Kark: The competencies have to be looked at by the trust. Before they employ somebody, or continue to employ somebody, they have to look at a set of competencies. Take your good example, which is one we speak about in the report. You might have somebody who is considering a post as chief financial officer. They have come from Tesco or the banking world, and, as you say, they treat people as widgets. They have to be inculcated into a system that is not just about profit or figures on a sheet; you have to look after patients. They may be the most brilliant finance officer, but they will have to go through training to ensure that they can meet that competency, and the trust cannot employ them as a fit and proper person unless they have. We think that is much more of a cultural change and is an encouraging way to do it, rather than saying, “Here’s a regulator who is going to bash you if you don’t.”

Q46            Dr Whitford: But when it is all packaged with training, the regulator is not only your regulator; it is also the body looking at the training, so you simply would not take a widget finance officer in at that chief level, because they are going to be widget-oriented and look at the numbers. You might encourage them by saying, “Why don’t you come in halfway up and we’ll expose you to these different kinds of clinical aspects?” The problem is that people move around; it is not the idea that there is only one set of competencies, because you are going to manage an ambulance trust. Next year, you might be managing a DGH, or suddenly it is a teaching hospital, so you want people to grow.

Tom Kark: When they move into a post, they will have to meet the competencies for that post.

Q47            Dr Whitford: It is hard to see how they are going to get them if there is not a growing structure so that, whether you come from a medical, nursing or business background, you can plug in and know that in 10 years’ time you might be ready to be a chief executive.

Tom Kark: But the structure is that you cannot get that job unless you meet those competencies. If you cannot meet those competencies, go off and get some training. It is no different whether you are a regulator or the employing trust; it is just a different process.

Q48            Dr Whitford: To me, it is the other way round.

Tom Kark: I understand that.

Q49            Dr Whitford: It puts a huge burden on the trust to investigate someone, as opposed to ensuring that someone’s competencies and certification are maintained all the time, whether they are applying for a new job or not.

Tom Kark: That is exactly the problem, isn’t it? They get ticked off by the regulator and the trust can say, “Great. Come on in.” We thought about that quite carefully. I understand where you are coming from, but ultimately it has to be the employer who says, “We want to put X into that job and we have to make sure they are competent to do it.”

Q50            Dr Whitford: You were talking about the database. They can access the database and someone’s 360-degree appraisals and so on from their previous jobs.

Tom Kark: The employer can.

Jane Russell: And more than one 360—the past three years.

Tom Kark: If they move, the next employer can. They build up a history. That is the concept.

Q51            Dr Whitford: But that database will have to be in a regulatory framework as well.

Jane Russell: It needs to be in a framework.

Q52            Dr Whitford: At what point does something picked up in the database trigger the standards council if they are two separate things?

Tom Kark: If there is a serious issue about somebody’s conduct, you would expect that person to be referred. It would not make its way on to a database.

Q53            Dr Whitford: Very few people end up at catastrophe from nothing; they build up as bullies focused on widgets and are not supportive of staff. None of that would trigger the standards council. We do not want to be in the case that somebody is dead and then we have the standards council.

Tom Kark: That is not quite right, because if somebody is a bully and they are warned that they are a bully and do not correct their ways—

Q54            Dr Whitford: By whom?

Jane Russell: By the trust.

Q55            Dr Whitford: But the trust is this person. That is the whole problem. Sometimes it is the chief executive, as in Mid Staffs, at the very highest level of management, who is focused on foundation trust status and not on patients. Where does somebody go?

Jane Russell: Referrals can be made outside the trust—for example, the CQC, NHSI and other bodies.

Tom Kark: Anybody who picks it up.

Q56            Dr Whitford: Many whistleblowers felt that was not helpful and that it did not go anywhere.

Jane Russell: They have a right of referral, subject to a sift.

Q57            Dr Whitford: Can I ask why you did not make a specific attempt to define deliberate misconduct? Is it because you were looking to others to try to boil that down over time?

Tom Kark: We set out a list of behaviours that we think, if proved, are incompatible with service in the NHS.

Q58            Dr Whitford: As this evolves, would you be expecting other things to be added to the list?

Tom Kark: Potentially, but the obvious ones, as we said, are things like deliberate bullying.

Q59            Dr Whitford: Why is it “deliberate” when the Equality Act very specifically does not say that? We talk about institutional racism. There are people who are inherently bullying or inherently sexist. That is still sexism and bullying.

Jane Russell: You are absolutely right. The Equality Act does not have a definition of bullying; it has a definition of harassment or indirect discrimination, which is what you just mentioned, where there is no intent because it is about outcome rather than behaviour. For direct discrimination and harassment, it is correct that motive is irrelevant, but what is relevant are mental processes. It is not quite right to say that mental processes are not relevant. I will hand over to Tom, because the focus of our review and the standards we say fall into the red line area are different from the Equality Act.

Tom Kark: The purpose of the Equality Act is, essentially, to protect people. It allows them to bring an action in the employment tribunal and so on. The purpose of our tribunal council—let us call it that—is in a sense punishment. Unfortunately, it is possible to discriminate against people completely unintentionally. If that discrimination is brought to somebody’s attention and they continue to do it, it becomes deliberate. All the way through, in terms of misconduct, we are talking about potentially taking away somebody’s livelihood. We are talking about the concept of permanent disbarment from being a director at all in the NHS. Our feeling about this was that no regulator would disbar somebody if the test was too low. There has to be a mental element to it.

Q60            Dr Whitford: Let us say that from a 360-degree appraisal it came out that a person was, for want of a better phrase, creating a hostile environment within which staff would not whistleblow and raise concerns, and it was highlighted to them. What happens if that remains and continues to come up in their 360-degree appraisal?

Tom Kark: First, go off and get some training, and identify the issue and see if it can be sorted out. If the person continues to behave in that way once they have been warned, it becomes deliberate and crosses the red line.

Jane Russell: And potentially is the subject of a tribunal.

Q61            Dr Whitford: This is why I feel we should be investing in junior managers when they are at a much more formative age and stage. The problem will be if the person who creates a bullying culture is the chief exec. Who above them is taking action?

Tom Kark: It has to rely on the referral process; somebody would have to refer that person to the HDSC, but you have to remember that we had a limited brief, rather than sorting out the whole of it.

Q62            Dr Whitford: I understand that. I did not understand why the two would be separated. There is the strength, resilience and ability to take action if the HDSC is already seeing 360-degree appraisals of a junior manager that suggest there are issues. You start to have somebody coming forward at a much more junior level to say, “We think you need to go on a diversity course,” or whatever.

Tom Kark: Our recommendations at the moment are not focused on dealing with every junior manager in the NHS. The fit and proper person test covers only people who are directors at board level.

Q63            Dr Whitford: But is that not part of the problem? We allow them to grow up into what they become. What I am saying is that they require training when they are 30, not 57.

Tom Kark: Absolutely, and there is training people can get at a much younger level. Once you have identified the competencies, they can see what they need to do to get to director level. That is the sort of cultural shift we are looking at.

Q64            Dr Whitford: Doctors are assessed on their culture, approach and empathy. It is not that you cannot measure those softer inherent principle skills, as it were; you can.

Tom Kark: Yes. It depends on who does it, doesn’t it? We are talking about the difference as to who is going to measure those skills. Should it be the employer or a remote regulator? We think it should be the employer.

Q65            Dr Whitford: We are not going to agree on this.

Tom Kark: I am afraid we are not.

Q66            Chair: How likely is it that a director could be disbarred? How often do you anticipate that might happen in practice?

Tom Kark: Some cases were brought to our attention. I am not commenting on specific cases, but there are cases that seem to have crossed a red line: dishonesty, deliberate bullying, victimisation of whistleblowers, and fraud. All of those would be regarded as serious misconduct.

Rosie Cooper: In the report you do not define serious misconduct. I cannot remember the exact phrase. Why didn’t you do that?

Dr Whitford: We have covered that.

Chair: We covered it while you weren’t in the room.

Q67            Rosie Cooper: My apologies. In that case, I have a comment. Relying on A N Other to report people is a very nebulous idea; for example, the only people currently at LCH under review are the clinicians I reported—the chief nursing officer and the chief medical officer. I have no medical qualifications; I just did that, and it has been taken to point X. But how many other people will have reported and not been listened to, to get to that point? Just waiting for somebody somewhere to report a person is a difficult place to be.

Tom Kark: I am not sure how to answer that, because you have to have somebody who reports somebody. If our idea of a good database and that which feeds into it—

Q68            Rosie Cooper: I have not been clear. What I am really saying, to go on from what Philippa was saying, is that in an organisation your boss is the person who supervises you and makes comments; you might have a PDR, and that kind of thing. When you are a chief executive—

Tom Kark: But the chief executive should still have 360-degree reviews, and good chief executives do.

Jane Russell: The chair does it; the chair is normally the person responsible for the appraisals of chief execs. The same question could be asked: who reviews the chair? It is the chief exec. Is that too cosy? Maybe it is.

Tom Kark: But it is not just one person; it is meant to be 360 degrees—those on a parallel, those below and one above. There is no perfect answer, I am afraid.

Q69            Rosie Cooper: I struggle simply because, if the organisations and regulators above do not spot something or do anything about it, we are just waiting for A N Other to appear to report it, and I think that is really difficult.

Jane Russell: But that is why we have the route of referral. Our potential whistleblowers are members of the public, subject obviously to a sift. That is to cope with that very situation, which we recognise is a problem.

Q70            Chair: Thank you. Are there any further points that either of you want to make while you are at the Committee?

Tom Kark: One that I would like to make is that we spotted an error. Somebody who has read our report very carefully will have got to annex A. Is that it?

Jane Russell: Annex 1, yes.

Tom Kark: And they are told to go and read chapter 4 of the Morecambe Bay report, which is very interesting and sad, but it is not the report we wanted them to read. It is Bill Kirkup’s report into Liverpool that they ought to be reading. He wrote both reports. My apologies; we are going to get the Department to issue an erratum.

Q71            Chair: Thank you for clarifying that on the record today, and thank you both for coming.

Examination of witnesses

Witnesses: Baroness Harding and Professor Baker.

Q72            Chair: Welcome, Baroness Harding and Professor Baker; you are both familiar to the Committee. For those who have not met either of you before, could you introduce yourselves and your roles?

Baroness Harding: I am Dido Harding, and I am the chair of NHS Improvement.

Professor Baker: I am Ted Baker, and I am chief inspector of hospitals at the CQC.

Q73            Chair: Thank you. Can I start by asking both of you what you think of the Government’s reaction to the Kark report’s recommendations?

Baroness Harding: I welcome their reaction. In some ways, obviously, I am a bit bound into this, as their reaction was to ask me to look at how we implement it, so it would be a bit odd if I did not. It is very important that we act on the report, rather than just talk about it.

Professor Baker: I second that. It is an important report, for many reasons, some of which you have talked about over the last hour or so. If we do it well, it could have a big impact on the culture of the NHS and the culture of leadership in the NHS. It is a real challenge for us and for the NHS to make sure that we use it effectively. I welcome the report, and we are committed to working with NHSI and other colleagues to make sure that it is implemented effectively.

Q74            Chair: Looking at implementation, how rapidly do you see all this moving forward?

Baroness Harding: I have been charged to lead the development of a workforce implementation plan, following the publication of the NHS long-term plan at the beginning of January. I have been asked to come back at the end of March/early April with an interim report, and then a full report after the comprehensive spending review later in the year. I expect that, in that interim report, we will set out our emerging thoughts on how to implement this and then get to work through the summer, with a view to coming to firmer conclusions after a comprehensive consultation on how best to implement it.

Q75            Chair: Practically speaking, when do you think we might see some of these measures in place?

Baroness Harding: A lot depends on how the consultation goes. If we were implementing only the first two elements—the first two recommendations—it could be very swift. If, on the other hand, as I personally hope, we are looking to implement a much broader regulatory approach, it is quite important that we tread carefully and listen to the consultation feedback. I am nervous about giving you a definitive date, because I do not yet know exactly what we propose to implement. Without knowing what we are going to implement, it is quite hard to commit to a firm date.

Q76            Chair: Of course, and no one is expecting you to give us an absolutely firm date, but sometimes there is frustration that reports appear and then, years later, we find that people are saying, “Whatever happened to that report?” We had that over medical examiners, for example. A very important report comes out and just sits on the shelf or drifts. That is what I am trying to get at.

Baroness Harding: I am not suggesting that at all. One of the things that is so painful when you read the report is to see the long list of other reports, going back nearly 20 years, which have come to the same conclusion, and we have not done anything.

Q77            Chair: When will we be holding you to account? The job of this Committee is to make sure that it does not just sit on the shelf.

Baroness Harding: I hope that, through the summer, we will consult on the competencies, values and behaviours that leaders in the NHS should be held to account for, and be able to come to a firm recommendation on what those should be by the end of that consultation—let’s say early autumn. Once you have that, implementing the second recommendation on building a database is relatively straightforward, and you could hold me to account on that through the course of this year.

Q78            Chair: If we invited you back next year, we could expect to see some tangible progress on this.

Baroness Harding: I would very much welcome that.

Chair: Thank you.

Q79            Rosie Cooper: If I might just bowl in, Dido, you mentioned 18 years. We have all seen report after report where we all agree on the conclusions but we do not get anywhere. With the previous panel we talked about the disappointment of whistleblowers and people who have invested in trying to get this moving this time. Having seen the Government split the Kark recommendations, how committed do you think they actually are to getting something done this time?

Baroness Harding: Obviously, I cannot speak for the Government, but what I can say is that, over the course of the last year, I have seen quite a lot of commitment from Ministers in the Department to listen and learn from what happened in Liverpool.

Q80            Rosie Cooper: What about the do part?

Baroness Harding: I have visited twice in the last nine months, with you, Rosie, and with the respective Ministers of State in the Department of Health and Social Care, to hear directly from the whistleblowers from the Liverpool community trust and the staff there. What I have seen is the Department work very hard to manage the handover from one Minister to another, to make sure that things did not pause while one Minister was getting up to speed with taking on the brief. I actually see quite meaningful commitment within the Department to turn this into action.

I am absolutely committed that the workforce implementation plan we are working on will have some real actions for 2019-20. Defining once and for all what good leadership looks like in the NHS is a very important building block in changing the culture. These recommendations are a very good route map for starting to shift it; they will not on their own shift the culture, but I get strong pressure from the Department—civil servants and Ministers—to act on this.

Q81            Rosie Cooper: That bit is good, but we find that lots of people—NHS providers and executives with a dog in the game—frankly do not want this to go ahead and, therefore, will put lots of obstacles in the way. How do you measure values? We heard from the last panel about 360-degree appraisals and all the rest of it, but, tangibly, how will you change cultures and measure those values, so that you can spot things? It is not when there is an atom bomb going off in your head; it is the sound of the undergrowth moving. We wait until we are hit, when it is too fast, too late.

Baroness Harding: That is a great analogy. Do you want to answer that, Ted?

Professor Baker: We go in and inspect NHS trusts, and we listen to patients and we listen to staff. Staff tell us a lot about the values of the leadership of those organisations, and that is reflected very heavily in our reports and in any action we take. From looking at tangibly what happens, I think we can judge the leadership on its quality and values and the culture of the organisation. We have learned in our inspections over the last several years that the culture and leadership are things that get in the way of improving the quality of care for patients. We talk so often about other things, but, unless the culture and leadership are right, the quality of care cannot be protected as it should be.

It was interesting that Mr Kark said that regulation cannot change culture. I was a bit worried about that, because I think regulation is part of changing culture. It is not the only way you change culture, but it is about creating a framework in which culture can change. The regulations that are being developed in the Kark report, or the implementation of the Kark report, give another opportunity to do that in a way that will drive the culture and leadership we need in the NHS.

Q82            Rosie Cooper: I absolutely agree, but I have to ask you whether we need to supply everybody with hearing aids. Why didn’t anybody hear this when it was going on in Liverpool and in lots of other places, for all those years? How did every single regulator not see it or hear it? I just don’t get it.

Professor Baker: I share your disappointment, having been in the NHS for many years and seen many reports on leadership.

Q83            Rosie Cooper: And patients, and staff, have suffered. They don’t just want us to share it—they want us to stop it.

Professor Baker: Absolutely, and that is why we need to build on the report to make it effective in changing the leadership culture, so that leadership listens to staff and hears staff voices and patient voices, and uses that to drive quality of care. Quality is driven from the frontline in the NHS; it is not driven from the top. We have to empower the frontline and give them a voice. That is what we are trying to do.

Q84            Rosie Cooper: When the staff survey either is not reported to boards or is meddled with, and nobody notices, where is the transparency in that?

Baroness Harding: That is exactly what needs to change. I completely agree with Ted that regulation is not the only component in changing culture, but it has a role to play. We have to be clear what “good” looks like, as in the first recommendation, and we then need to reinforce it with all our financial and non-financial incentives. We need to look quite hard at the definition of good leadership in the well-led review so that both the CQC and NHS Improvement assess the performance of boards and organisations using the staff survey, 360-degree feedback and feedback from whistleblowers in a way that is more front and centre than we are doing. I think the honest truth, Rosie, is that in the past we have not done so.

We need to look at the financial incentives that we place on our trusts, so that we are not inadvertently encouraging people to behave inappropriately. Unfortunately, there is no doubt that that was happening in the Liverpool community trust. It is an awful acknowledgment from a regulator that our financial regulatory regime was encouraging entirely the wrong behaviours. There is a role, in encouraging and incentivising the right behaviour, for a regulatory floor, so I support some form of professional regulation.

You asked why it has not been done before. The awful truth is that the management culture in the NHS is quite rotten. A number of senior managers have experienced bullying themselves on the way up and are very nervous about a professional regulatory regime that could be captured. We have to think carefully about how we design a scheme and genuinely consult all parts of the service—patients and staff—so that we minimise the risk of that regulatory capture. It would be an absolute travesty if, in the desire to change the system, we reinforced the very rotten cultures we are trying to change.

Q85            Rosie Cooper: Dido, could you explain regulatory capture? People may not quite get that.

Baroness Harding: Sorry. I say this as chief executive of a telco that spent eight years trying very hard to influence the regulator, in the form of Ofcom. A problem all regulators face is that the organisations or individuals they regulate will try their damnedest to take control of the regulator’s agenda. One of the questions I have had from a number of provider leaders, and from NHS Providers themselves, is about who would make the decisions in a professional regulatory authority.

When you peel back what they are really asking, they are saying that they are scared of who would be in charge of it, and that is the ultimate indictment of the rotten culture. Our leaders are scared that poor culture would take control of this, which is why we have to hear them and consult very carefully on how to design a professional regulatory scheme for managers that minimises the risks of that. It means having transparency and independence, wherever possible; all those things are ways of minimising regulatory capture, but you will not completely avoid it, so people may be right to be a bit suspicious.

Professor Baker: Can I come back to the bullying side of things? It is important to recognise that the NHS has been very top down; everything has been driven from the top of the shop, and that is perceived by many people in it, including some of the people we are talking about, chief executives and chairs of trusts, as a bullying culture that they are working in. It takes an awful lot of moral courage and strong values, if you are being bullied from above, not to transmit that to the people below you.

When we look at bullying in the NHS, we should not just be thinking about  individual bullies and regarding them as the exception; we need to talk about the culture in which everyone works. There will be some people who should not be in the NHS, because they have the wrong attitude and the wrong values, but there are an awful lot of people who have adopted behaviours just to survive in a very pressurised environment. We need to release them so that they can live to their potential and provide strong leadership in the NHS.

Q86            Rosie Cooper: How would you assess a trust and a board effectively for values and competencies? I say that absolutely thinking of Liverpool community trust, where the level of bullying and the damage to staff and harm to patients is now a fact. For example, the chair made over £1 million selling health and wellbeing services to the NHS and other organisations, while presiding over that, and nobody seems to have noticed it, yet the NHS was the very organisation buying those services. How are you ever going to get to look at the competencies of those board members and really evaluate them? How?

Professor Baker: But the competency you judge first and foremost is how good the care is that patients are receiving. That is the first thing, because that is the purpose of the organisation—to provide high-quality, safe care to patients. If it is not delivering that, clearly, the leadership is not working for the organisation. Once you know that, you can start drilling down and ask what the board is doing, and what the leadership is doing.

Q87            Rosie Cooper: Ted, how would you find out?

Professor Baker: Find out about the quality of care to patients? You would go and talk to patients and frontline staff.

Q88            Rosie Cooper: Exactly. The difficulty is that in the Liverpool community trust, the staff survey was hidden or not reported, and we now know that there was something of the order of many thousands—I do not know whether I am able to say how many—of untoward incidents that were never investigated. Nobody would know. How would we find out?

Professor Baker: That is why, when we inspect organisations—and we have now inspected all NHS trusts—one key driver is to talk to frontline staff and to hear patients’ voices. The staff survey is a real problem because, across the NHS, it shows an awful lot of unhappy staff, and judging between one group of unhappy staff and another is quite difficult. If you speak to the staff, and ask them what their experience is of working in the organisation, you learn very rapidly whether the organisation is well led. It has been really helpful to us in the CQC that staff are very willing to tell us how it is for them in reality, in a way I wish they felt free to talk to their leadership about. One of the great pities of this is that they will talk to us, but they do not feel able to talk to their leaders.

Q89            Rosie Cooper: No, no, no. I am really sorry, but I have to reject that. The reason I have to reject it is that really good members of staff who were being bullied to billy-ho in Liverpool community trust went to the NMC and were told to look at the protocol. They went to the CQC. They escalated it. I actually have an email to the chief executive, indicating how bad things were and how seriously bad and dangerous it was for patients, with serious incidents. The chief executive replied, “It’s done.” Those staff escalate; they do their best.

Professor Baker: I am sure you are right about that, and I won’t try to defend anything that has happened there.

Q90            Rosie Cooper: But we cannot say that staff do not escalate. They do.

Professor Baker: What I would say is that about 2,000 staff every quarter—about 8,000 a year—whistleblow to us at the CQC, and what they tell us is vitally important in the work we do. It is very important that we express public gratitude to those staff for raising their concerns. They have a major impact; I have put trusts into special measures because of what staff have told us as whistleblowers, and that has had a huge impact on their local organisations.

Yes, I totally accept that at Liverpool community trust the whole system failed to pick it up in a timely way. That is entirely right. But there are lots of other examples where whistleblowing has been absolutely central to the regulatory process, and we are learning to do it better all the time.

Q91            Chair: Obviously, it does not work every time, and you will have seen the very critical report from the PHSO about what happened in the case of my constituent, Clare Sardari, when she raised her complaint. Given that we have already heard that there is going to be a significant delay before we bring in alternative arrangements for investigations, what are you going to do in the meantime, Professor Baker, to make sure that we do not see this kind of thing happening again, when a vindicated whistleblower is raising concerns and is not being heard?

Professor Baker: The PHSO case that you reference was a very challenging case early in the process of the fit and proper person regulation, and I totally accept what Mr Kark said about it in terms of us not doing it well, and what the PHSO says about it. We have learned from that. There were certain things that the PHSO told us we needed to do better, and we recognise that, particularly around recordkeeping, so that we keep an accurate record of what we decide.

To some extent, as is clear in the Kark report, we are in a difficult position with this regulation, because it is for trusts. It is not regulation that gives us powers; we have to hold trusts to account for whether they are compliant with the regulation. That creates a tension for us, in that we are not investigating a director to say whether they are a fit and proper person; we are making sure that the trust is investigating the director effectively. That has raised expectations with people that we are not enabled to fulfil, because we do not have the power from the regulation to do so. Having said that, we need to recognise those expectations and be much more honest with people about what we can and cannot do.

Q92            Chair: It is also about the culture. That is the point, isn’t it? It is about the culture of an organisation, and how it treats its whistleblowers. Are you going to pay particular attention to that while the new structures are set up?

Professor Baker: We work very closely with the national guardian on this, and we speak to the local freedom to speak up guardian. In every trust we go to, we speak to staff about speaking up. One of the key elements of “well led” is to ask what the culture is in an organisation around people speaking up about their concerns. That is a central element in our well-led investigation, which is absolutely key to our assessment of organisations.

Q93            Chair: Would you accept that a major concern for junior doctors and others is that they still feel they will be directly discriminated against if they raise concerns?

Professor Baker: I accept that staff not feeling able to voice their concerns freely is a major concern, and a major lost opportunity to improve services. You mentioned junior doctors, but it applies to lots of other staff as well, which is why we are pushing so hard on that element of our well-led inspections.

Q94            Dr Whitford: I have a short follow-up. Dido, you were talking about the independence of the health directors’ standards council. Is that not an argument for it to be independent of NHSI? When I came down and joined this Committee in 2015, coming from Healthcare Improvement Scotland, I was surprised that NHSI seemed at that time to be almost completely fixated on the management of the money. That was quite a shock to me for something that was being called the improvement of the NHS. Does it make sense to put that body inside NHSI when, again, we hear from whistleblowers that historically they have a beef with the CQC and with NHSI? Whatever system is set up, should it not be independent?

Baroness Harding: I have considerable sympathy with your argument. Can I deconstruct it a little bit? First, I think you are completely right that, in the history of the organisation I chair, it has been too focused on the money. One of the ways we will deliver better outcomes for patients and, actually, more efficient use of taxpayers’ money, is by focusing more on the people and the culture when we look to intervene in organisations. There is something much broader than this report that NHS Improvement and NHS England need to do, which is to focus our efforts much more on the leadership culture and the improvement culture in the organisations that we oversee. I agree with you on that.

Secondly, there are a number of different options that I hope we will consult on over the summer for the structure of a regulatory body, both a thin, barring regulatory body, as proposed by Mr Kark in his report, and a fuller, professional regulator, such as you set out. One of the important questions to debate is exactly where it should be housed and how you give it independence, transparency and legitimacy. That would lead you to wanting to keep it independent from operational oversight and management, which we very much see NHS England and NHS Improvement as doing.

We may get there in stages, as Mr Kark was suggesting, and that may be another route that we consider through the summer. But your point is very well made; if you want a fully trusted regulator of professional managers, it will need to have clear independence from the day-to-day operation.

Q95            Dr Whitford: In response to Rosie, Ted, you talked about the first warning sign being clinical outcomes. In actual fact, many audit programmes across NHS England have gone down over the last nine or 10 years, rather than growing; there are many aspects of clinical care, cancer management outcomes, and so on, that would have been audited 15 years ago but now are not. Dido, is clinical audit of outcomes, in an ongoing sense, actually going to be something that NHSI expands? That is what it is all about, and it can be the first trigger for asking why a trust has failed the clinical standard.

Baroness Harding: I think—The reason I hesitate is that what we want to expand in NHS Improvement is our improvement work rather than our audit work.

Q96            Dr Whitford: You don’t think they are connected.

Baroness Harding: They are, but we have been overly focused on auditing and not focused enough on what the improvement and support offer would be. I would like to see greater expansion of the work, for example, led by Professor Tim Briggs on “Getting it right first time.”

Q97            Dr Whitford: But that is audit—to improve.

Baroness Harding: It may be semantics, but I would argue that it is using data to enable people to improve.

Q98            Dr Whitford: That is exactly what I mean. You audit against standards, and, if you are not making it, you discuss with your peer group why you are not and how you might improve. If everyone has no idea what their outcomes are, which is what we heard about management, you cannot actually set out to improve.

Baroness Harding: Absolutely. I think you are right. In that sense, we are violently agreeing; we are just using different words to mean the same thing. What there has not been is the same rigour in assessing management performance in organisations. Although we have the staff survey, it surprised me, coming into the NHS, that there is no depth of analysis of the staff survey, certainly at a national level. In our very best trusts, they crawl all over the data and work out how they can improve, but I do not think we apply quite the same analytical rigour to the people metrics that we could, whether it is staff survey over sickness and absence, for example, or the lead time for a patient or family complaint to be answered. That will tell you a lot about the leadership culture in an organisation. We need to focus more on that and almost create an equivalent programme to “Getting it right first time” for people management and HR. That is the vision I would have for our improvement offer.

Professor Baker: It is not just outcomes but the wider quality issue that is important, although outcomes are central to that. I totally agree with you about the value of audit, and that there is a difference between audit and quality improvement. We want to see audit used as a quality improvement tool; that is the way we look at audit, not just at the results but how we can use audit to improve care for patients. That is a strong mark of leadership.

To come back to the HR data, the staff survey data, we found that staff survey figures, such as staff engagement scores, are a very strong predictor of clinical quality. In fact, the medical engagement score, which we ask trusts to do, is a very strong predictor of clinical quality. When we look at quality, it is not just about looking at clinical outcomes; it is sometimes just looking at how well engaged the staff are, because engaged and empowered staff will drive high quality at the frontline. That is what we are learning.

Q99            Dr Williams: What difficulties will the database, recommendation 2, pose for NHSI as the central database holder?

Baroness Harding: We can discuss independence and transparency as we go further, but practically building that database, compared with other data returns that we already gather, is not very complicated. As set out in the report, there are other parts of the public sector holding much larger and more complex databases on the careers and histories of their senior leaders. I do not think we should use that as an excuse not to do this.

Q100       Dr Williams: How useful will that database be for the CQC in assessing a trust’s performance against the fit and proper person standard?

Professor Baker: It will be very useful. You have heard what will be in the database in terms of the past history of the director, so there is a real sense that we can hold trusts much more specifically to account about how they apply the fit and proper person regulation. That, combined with the barring mechanism you talked about, adds up to a very strong package, encouraging and building strong leadership in staff who are good leaders, but also having sanctions against poor leaders. That will be very effective.

At CQC, once the database is there, we can hold trusts to account to ensure that they fill it out adequately. We want a comprehensive database. One judgment that we can make about “well led” is whether they are contributing to the database a full amount of information, so that we have a full picture of the directors. Again, we can feed that into the well-led inspection. It will be helpful in that regard.

Q101       Dr Williams: Are there any information governance challenges around this? Will the CQC have access to all the information it needs? If somebody has applied for a job, at what stage will the organisation that is considering employing them be able to access all that information?

Baroness Harding: As with all personal information, we must make sure that we work through the detail, and that is one of the things the teams are working through now. Bear in mind that in NHS Improvement we already hold quite a large database of people who are keen to become directors of organisations; that is part of our attempt to recruit and expand the talent pool. Again, I do not view that as insurmountable. It needs to be done well, professionally and thoughtfully, but it is not an insurmountable issue.

Professor Baker: When someone is applying for a job, they will be expected to give permission for the prospective employer to have full access to the database about them.

Chair: Thank you. Can we go on to mandatory references?

Q102       Rosie Cooper: We did a bit on this in the first panel. Will mandatory references be enough to ensure that trusts are given appropriate information before employing a director? How will non-disclosure agreements, which are not supposed to exist in the NHS but do, be dealt with?

I often take a general, bland thing and drive it down to an example I know. If you were here for the early part, you heard me talk about Tom Jackson. He and the chief executive were required to leave by NHS England. He then got another job, passing a fit and proper person test, despite lots of questions about the Deloitte review, and paying £105,000 to a non-executive. I could go on. How does that happen? He needed a reference, so he got a fellow board member to give him one; the board member did not have permission to use headed notepaper, but did so.

I genuinely understand your quizzical look, Ted. The words are lovely on paper. I treat myself as a member of the general public and, every time I hear somebody go, “Oh, we’ve learned the lessons,” my heart sinks. I actually want you to do something. Fix it. There are lovely words here about mandatory references and all the rest of it. How do you stop that?

Professor Baker: The devil will be in the detail.

Rosie Cooper: Absolutely.

Professor Baker: What has the mandatory reference got to include? We need to do some work on that, and write specifications for a mandatory reference that will deal with all the issues you have addressed and then enforce them. Of course, once those standards are out there, the CQC can say that we expect a mandatory reference to be referred to before anyone is appointed. We can do that, but, equally, we can go to trusts providing references and make sure that they provide references of high quality, and meet the standards. If they are doing things such as you suggest, with a mate providing a reference for a friend, that clearly would not be well led. It would be a breach of the fit and proper persons regulation, and we could challenge trusts on that.

Baroness Harding: Most people in the country think of the NHS, quite reasonably, as one organisation, and would find this conversation quite baffling—that one part of the NHS can employ another without an employment history transferring. I cannot see why that would be a dangerous thing to do; it just seems common sense that we would want our NHS to have a full view of someone’s employment history.

As Ted said, it will not be perfect, because there is no single silver bullet, but it will be a whole lot better than we currently have, when we do not have that. We can learn a lot from other sectors, and from mandatory references in financial services, when individuals move from one private sector employer to another, as opposed to moving within one public institution. Ted is 100% right that the devil will be in the detail of what is in the mandatory reference, but we can learn from other sectors rather than needing to start from scratch.

Q103       Rosie Cooper: Exactly, but I put to you, Dido, the answer I was given at Mersey Care, for Michelle Porteus, the HR director for Liverpool community trust. Other than that they knew she was employed there, they could not present me with her file; there was no record of her being there. How does that happen? I am not expecting you to answer that, but how will it happen in the system you are talking about? Your record moves with you, but if you don’t like it, you just shred it. It’s gone—not there.

Professor Baker: Clearly, we need to bring in rules and enforce them, and we can do that. Equally, we need to change the culture, so that no one believes that that is at all acceptable. That is the problem; not only are people not doing it but there is a culture out there that believes it is acceptable practice.

Q104       Rosie Cooper: There is not a person in this world who thinks that shredding your own HR file is acceptable. But the fact is that an HR director did it and walked away, and nobody has done anything about it, so saying that it is not acceptable is just not good enough.

Baroness Harding: Rosie, what you are setting out is exactly why we need professional regulation for managers. At the moment, there are no means for either NHS Improvement or the CQC to act on what you have said. In these awful cases, it is plain wrong that that is the case, and that is why we need to act.

Q105       Rosie Cooper: To be perfectly frank, I am very encouraged by the answers from both of you today. I am making the case strongly because, for example, when I asked a question of Prime Minister David Cameron, and said that we needed a forensic investigation into the HR department at Liverpool community trust, his answer to me was that the CQC would do it. I knew that you could not do it; you did not have the powers or investigation teams to do it. The Prime Minister gave me that information, and I accept that he said it in good faith, but he gave me an answer that is patently rubbish. HR departments are used as the Stasi, the enforcers for bullying-type behaviour. Who looks at them? That is a controlling part of any NHS organisation.

Professor Baker: That is fair enough, and the Kark report gives us the opportunity to move forward significantly in how we process these things. There will always be learning, and there will always be ways of doing things better. We have learned that all organisations that are good are always trying to improve. Having said that, we will go forward with this and improve.

To go back to your point about bullying HR departments, we have identified bullying cultures in several trusts and held them to account for that. That does not mean that we have picked up all bullying in the NHS; we are not omnipotent, but we have identified significant bullying cultures. We need to start calling it out. Bullying in the NHS is a real problem, and it will not be sorted out easily just by the regulator pointing to it. We need to change the culture for everyone involved in the NHS, to understand the problems it causes to staff and the risks it causes to patients. We need to understand that it affects patient quality.

Q106       Rosie Cooper: It does huge damage to patients and staff.

Baroness Harding: While regulation can help, and inspection has a role, we have to train and develop our managers. The NHS has been very penny wise and pound foolish on HR as a function. We have tended to have people who are nowhere near the board. They do not have the ear of the chief executive, and they feel pretty ground down themselves, as I found when we talked to HR leaders and departments, as I have gone out and about. Yet this is a people business; 70% of our costs and everything that we do is through people.

I know I speak for David Prior, the chair of NHS England as well. As we bring our two organisations closer together, we have to put people management more at the core of the way we run the NHS and do some of the same sort of GIRFT-like work for HR, setting out what good HR departments do. There are some brilliant ones, probably despite how we have run the system. There are some people getting it right, and we need to shine a light on them, share best practice and encourage development, particularly of middle managers.

Chair: That was very much the focus of what Philippa was asking the first panel about, so this might be a good moment to go further.

Q107       Dr Whitford: Yes, I welcome your talking about it. I raised with the first panel that interacting with management only when it is running the board or the trust is far too late, so I really welcome that. How would you envisage middle management training? If the hospital directors’ standards council is only about how to kick out directors from boards, in what way will that actually change things? The numbers would be tiny, yet the whole culture of allowing people to be bullied and to bully the person below them, and so on, would still be there.

Baroness Harding: You are right. Within the NHS as a whole, we need to start incentivising; to have both carrot and stick, regulation and people management, with organisations investing in the development particularly of their middle managers. As part of the workforce implementation plan, we have a workstream about leadership, and it will be an awful lot about management training and development.

A theme that comes through the Kark report is that it is not just about a punitive thing at all. We have to make being a manager and leader in the NHS a more attractive job, because one of the biggest challenges we have is that there is a shortfall of people willing to take on those roles. It is about investing at all stages in your career in good talent management and development. To me, from the outside, it is quite shocking that there is no talent development or spotting system in the NHS. There are pockets in small parts of the system, but not everywhere. There is a lot we need to do, irrespective of what regulatory regime you put in for professional managers.

It might be good, but it is not essential to have your professional regulation work the whole way down; one of the things we should consult on is how broad it is, because there is a cost and complexity challenge. In other sectors, there is more interventionist regulation at the most senior levels in order to shape the culture of the total organisation, and then more investment in training and development below. That might be a more practical first stage than immediately going to a professional regulatory system that covers several hundred thousand people rather than a few thousand.

Q108       Dr Whitford: Obviously, though, a registration regulation can be formative. Appraisal, particularly of junior or middle grade doctors, is very much formative, and would therefore offer that opportunity, rather than being seen as something way beyond the pale that comes in only when we face catastrophe. I worry, because I do not know how you are going to get anyone to work for the HDSC if it is literally seen only as the nuclear option and as something negative, as opposed to something that is part of designing training and holding a database, and forming people as good managers, and something that will take action rarely, when someone really needs to be disbarred.

Baroness Harding: You make a very good case, and those are exactly the sorts of options that we need to stress-test over the course of the next few months, to work through the trade-off between the complete solution and the cost and complexity of getting started. What I would hate to happen is that in two years’ time we are still discussing whether we are ever going to do anything. There have been 20 years of that; we need to start to move and do stuff.

Q109       Dr Whitford: You might not be able to say, because everything may still be too much of a blank sheet of paper, but what would you both see as the relationship of your organisations with the standards council and the database?

Baroness Harding: It is quite hard to answer that question, because I see a spectrum of different options for what the standards council and professional regulator could look like, but I shall have a go. At NHS Improvement and NHS England, we increasingly see ourselves as the support centre for the NHS, for NHS Providers, commissioners and systems. Therefore, we are on the pitch, and when something goes wrong we are responsible, too. We are not an independent regulator that can just blow the whistle as a referee, which is why I tend towards your view of a truly independent regulator, because you cannot be both the referee and the player manager. That is probably a distinction that is quite different in the CQC and in the organisation I chair.

Professor Baker: We are very supportive of the idea of a health directors’ standards council, as described in Kark, because it is clearly an independent way of investigating directors when there has been alleged misconduct. At the moment, we cannot do that; we ask the trusts to do it, sometimes calling an independent investigation, but, as we have discussed, that does not meet everyone’s expectations about what came out of the Francis report. There is a sense that this is a real move forward, and we welcome that.

I totally support what you say about a regulator not just being there to punish; a regulator is much more than that. Professional regulation gives individuals status, standards and values, which can be very important when you are working under pressure. Regulation gives managers values and standards, so that when they are challenged about something, and they think they should not do it, because it is not in the patients’ best interests, they can stand firm and say, “My regulation will not allow me to do that.” That is something doctors have innately, and which we value enormously; there is a sense of regulation being a real support when you are dealing with difficult decisions. I wonder whether managers—middle managers as well as senior managers—would value that. It is a big step forward, and I look forward to contributing to the consultation that Baroness Harding is talking about.

Baroness Harding: I agree with Ted. One of the problems with our culture in the NHS at the moment is that we have trial of individuals by HSJ, rather than a regulatory regime that can protect people who have been brave enough to take on some of the most difficult jobs. Maybe it has not worked out perfectly, but they are not wicked or evil, and they deserve our support. At the moment, they do not have the fall-back that Ted is describing, so I totally support what he said.

Q110       Dr Whitford: But it is in essence about grooming future leaders. Having worked as a clinician, I know that quite a junior manager can be either helpful or obstructive. It is not just the chief exec of the hospital. You need to get those values in early.

Ted, do you think that the standards council would help the CQC in the exercise of your fit and proper person test?

Professor Baker: Very much so, because it will give us an independent assessment, when an allegation is made of misconduct, of whether it is substantiated or not. Clearly, if it is found to be substantiated, we can tell the trust that they cannot employ that person, because they are not fit and proper. It will enable us to do that bit, but there is a bigger issue around the culture and leadership development. If we see it purely as a negative, barring exercise, that helps us through the immediate future, but it does not necessarily build the culture we want for the future.

Q111       Dr Whitford: It is at a moment in time when someone is being employed. There are many stories from whistleblowers who have been treated very badly, yet the trust has been passed as well led, or has, basically, got a seal of approval from the CQC, hence the friction between whistleblowers and the organisation. The problem is that if something is at one moment in time, at the point of employment, it may only be after that that you see how they function, which is why we need something more continuous and ongoing.

Dido, what are the immediate issues for NHSI with regard to setting up the standards council?

Baroness Harding: I think I have covered some of them. For me, the most immediate issue is to work up some alternative options and then consult widely, precisely because of the concerns of a lot of managers that this could be used as a punitive regime, rather than as a means of encouraging and inspiring the right behaviours, as Ted set out very well. It is important that we tread carefully in designing that consultation, which will be part of an overall consultation on what our leadership offer should be to aspiring leaders in the NHS, coming out of the workforce implementation plan over the summer. I am mindful that, to do it well, we must not rush to the easy answer; we must consult and engage for a few months to come up with something that has enough support from the service as a whole.

Q112       Dr Whitford: In the Kark review, as we discussed with the first panel, the HDSC is rather punitive and circumscribed. It sounds as if you are looking at something broader, more evolutionary and supportive, to generate management and workforce engagement.

Baroness Harding: Yes, and I would very much like to start an open debate and dialogue with patient groups, whistleblowers and young and older managers in the system on what the right answer would be. In the work that Julian Hartley and I have been doing together on the workforce implementation plan, we are trying to go out of our way to be as inclusive and open as possible in shaping that programme, because we feel that we need to role model the very behaviours that we are saying—and Ted can prove—lead to better healthcare. We need to go through that process over the course of the summer before being able to give you a concrete recommendation about what a more holistic regulator might look like.

Q113       Dr Whitford: NHS England has quite a complex structure, from commissioners to bodies such as yours. Indeed, management talent may well move backwards and forwards as a career develops. Would you see this approach applying to your own organisation and to other arm’s length bodies as well?

Baroness Harding: Yes, unambiguously.

Professor Baker: I totally agree with that.

Chair: We have a final question from Rosie.

Q114       Rosie Cooper: We have had a long discussion going into the detail of the Kark report, but, as we are coming to a close, I would like us to remember why we are here discussing this. I would like Dido to go back to the whistleblowers. You said that you had met them, and I know you met them at Liverpool community trust. My question for you—so that we can all remember why we are here—is: what shocked you the most about what they had to tell you, and what will the real price be of us failing to act?

Baroness Harding: I am sure that I will not do the topic justice in the way you do on their behalf, Rosie. I have been up to Liverpool twice to meet the whistleblowers and the team there, and it is personally shocking to hear what happened to incredibly smart, professional people, who come to work because they care, and to the patients they care for, and how little any of our organisations heard them. It was awful, personally awful. The second time I went up, I watched the second Minister I took up, and it had the same effect on him. It is shameful that, as a system, we have not found a way of improving this. I cannot, hand on heart, tell you that there is not something like that happening somewhere in the NHS right now, which is the truly scary thing.

It is not just about the Liverpool whistleblowers. I engage with a lot of whistleblowers on Twitter, but I also try to see each of them. If they have come to me, if they have got as far as the chair of NHS Improvement, they have pretty much always lost hope in the whole of the NHS. I have come to two conclusions: usually, when I meet them, I find that they are right, and, usually, they have been so beaten down by our system that they have given up all hope. We have to find a way of hearing them faster. I am not saying that this is the silver bullet; I do not think it is. As Ted has said several times, the overall leadership culture needs to change, but there have to be some consequences for management that does things like that to people. It is wrong to live in a modern, civilised democracy, with a wonderful institution like the NHS, that is still capable of treating some of its people like that.

Q115       Chair: That is a very important note. Thank you both very much for coming. Are there any final points that you want to make that you have not been asked about today?

Professor Baker: Can I just raise one point? I do not want to discuss it in detail today, but I remind the Committee that the fit and proper person regulation applies to all providers regulated by the CQC, including independent healthcare and social care providers and some general practice as well. It is not just about NHS trusts. When we look at this, we need to think about the bigger picture.

Chair: Thank you for that.

Q116       Rosie Cooper: Ted, I am grateful for that, but it is about as much use as a chocolate teapot.

Professor Baker: It should not be forgotten. That is my point. It is not that we can solve the problems across the whole sector now, but we must understand that it has wider implications.

Chair: We look forward to an update in a year’s time. Thank you very much.