Shared Services

Statement from Edwina Hart, Minister for Health and Social Services

In line with Making the Connections and now the Efficiency and Innovation Board, the consultation paper on my NHS Reforms proposed that a reduced number of healthcare organisations could provide the opportunity for a new structure to be put in place which would:

• channel more money into frontline services through greater efficiency; and
• support the improvement of patient care by reducing bureaucracy.

The majority of consultation responses to a question specifically about Shared Services supported the establishment of a single shared services body for NHS Wales that would reduce bureaucracy and unnecessary expenditure.

Respondents also wanted to create a more efficient service that would allow the NHS to focus on frontline services.

As this was a complex issue that required more detailed consideration, I decided that Shared Services would be considered as a secondary change, which would follow on from the establishment of the new Health Boards.

In the interim, I set up a Stakeholder Board to consider and look at different models of Shared Services, which was chaired by Dave Galligan, from UNISON Wales/Cymru.  I would like to place on record my thanks to Dave for his role in taking this work forward.

I also commissioned a research study from the School of Management at Bath University to review best practice models for Shared Services across the UK and internationally, and to canvas more detailed feedback from stakeholders across Wales.  This report will be available on the NHS Wales website today.

A new model for NHS Wales Shared Services has been developed as a result.

Shared Services are non-clinical business functions provided for NHS Wales organisations, including estates management, legal services, health supplies and payroll and recruitment services.  Most of these services are hosted by individual Health Boards and Trusts, with the intention that all NHS Wales organisations can make use of their expertise.

Under the existing arrangements, support services are directly managed and delivered by local NHS bodies, which does not encourage an overall strategic direction for such services or accord with accepted best practice.

Presiding Officer, I therefore intend to establish a new NHS Wales Shared Services Committee, which will have an over-arching responsibility for NHS Wales Shared Services. This will be a sub-committee of the National Delivery Group.

 

I considered a number of models for Shared Services, including a stand alone body, but in the current economic climate I cannot justify creating a new organisation.

 

The new model will allow organisations to concentrate on frontline service delivery without the distraction of running non-clinical functions.  It will also enable the service to save money and take benefits from economies of scale.  Welsh Health Supplies, for example, can procure supplies more cheaply on behalf of many organisations through greater purchasing power.

I wanted to avoid a top down solution where decisions were seen to be imposed on the Service, and savings top sliced.  I have, therefore, decided on a governance model that allows the NHS to own these shared services.  A model that will allow the Service to benefit directly from speedy implementation of new ways of working – which cuts out waste and duplication.

The NHS Wales Shared Services Committee will comprise the Chief Executives or their nominated representatives, from each of the Health Boards and Trusts.  To avoid this being a cosy club, I have decided that the Committee will be chaired by an existing Non Executive Director of the NHS National Delivery Group, which will report to the Chief Executive NHS Wales.  In addition, the Committee’s membership will comprise Welsh Assembly Government officials and a staff side representative.

A core management team will be responsible for the delivery of NHS Wales Shared Services. A Director will be appointed from within current NHS staff.

During its initial period, existing Shared Services staff will remain employed by their current organisations, but will be accountable to the Director who will report to the Chair of the Committee.

The Committee will seek to ensure the delivery of economies of scale, efficiencies and consistent quality for the following business and professional services:

• Welsh Health Estates
• Welsh Health Legal Services
• the Welsh Risk Pool
• the Prescribing Services Unit
• Procurement Services – including Welsh Health Supplies
• Internal Audit Services, and
• Payroll and Recruitment Services

These services currently operate with a budget of some £44 million and 1,300 staff.

The new Committee will be responsible for:

• setting the strategy and monitoring the performance of NHS Wales Shared Services on behalf of NHS Wales;
• ensuring the service improvements for each of the services that will lead to financial savings; and
• receiving and agreeing an Annual Business Plan that will be signed off by all NHS Wales Health Boards and Trusts; and
• Holding the Management Team to account to meet the agreed objectives.

I will be consulting with NHS Chief Executives on the Directions I intend to issue to put these arrangements in place.

The total direct net financial savings for the new model over the first five years of operation, starting from 2011-12 are estimated to be in the region of £14.5m. These are expected to be generated from, for example:

• the standardisation of processes;
• improved use of technology; and
• · better procurement – whether internally provided or externally contracted.

 

By improving the overall quality of services that NHS organisations receive, significant indirect savings will also be secured by frontline organisations, in terms of better information and the freeing up of staff time to concentrate on the delivery of front line services.

The new structure will be established in shadow form from this Autumn and formally established from 1^st April 2011.

I intend to undertake a comprehensive stakeholder engagement exercise on NHS Wales Shared Services, to include both staff and suppliers of services to NHS Wales organisations.

I will be ensuring that UNISON Wales/Cymru and the Welsh Partnership Forum are also fully engaged in this exercise.

I have also requested that in parallel to the initial implementation of the proposed arrangements, further work is undertaken to identify and evaluate the costs and benefits of potential opportunities to extend the potential for NHS Wales Shared Services to become a hosted organisation at some point in the future.

I am also keen to explore the opportunities of extending the Shared Services remit in the future to the wider public sector in Wales.

In summary, the new arrangements for NHS Wales Shared Services build on collaborative arrangements currently in place, but with added benefits.

NHS Wales bodies will be able to concentrate on patient care without the distraction of running or developing support services.  Over time, greater efficiency gains across the NHS – and potentially the wider Welsh public sector – will be realised, which I am sure all Members will welcome.