Little noticed alongside the Chancellors Spending review on November 25 was a revision to the Treasury Green Book, giving advice on appraisal and evaluation of investment proposals.
Some people in the Northern Research group interpreted this as making it easier for its projects to get approval. However a more considered view needs to take account of the summaries of changes made and reasons for doing so in another document.
Campaigners have long argued that there was something wrong with many of the reconfiguration and transformation proposals that have been promoted by the NHS over the years. The Independent Reconfiguration Panel has pointed to the problems (although its independence is now under question following flagrant vested interests being regarded as “tangential” in its recent ruling on the new hospital proposed for South West London).
The Nuffield Trust, Kings Fund and the National Audit office have also asked searching questions.
But it still comes as a shock for the Treasury to effectively endorse many of the criticisms of the processes and content of business cases presented by NHS bodies, and the failure to review and learn from the lessons that should have been learnt before now.
The Treasury highlight a string of the common failings in business cases:
- Failure to engage with the strategic context: It is a common failure not to understand that business cases are there to help decisions that support political priorities and investment objectives – not to get approval for “good things”. Thus the NHS appear not to have cottoned on to the fact that Covid might represent a change in strategic context which challenges previous policies based on rationalisation, cutting capacity and living with fewer more intensively worked specialist staff.
- Failure to produce well –defined investment objectives
Not only does the NHS usually fail to clarify its objectives, but it also fails to show how its proposals will deliver them. For example in one recent business case the main objective was to address specialist staffing shortages – and yet its proposals not only cut the staff numbers but shifted the problem onto neighboroughing Trusts. Similarly vague assertions that “sustainability” would be created are undermined by the costs incurred by the new model, the claiming of benefits from transferring caseload to neighboroughing Trusts, and by inserting targets for huge unidentified “savings” into financial projections.
- Weak Strategic cases
The choosing of options to evaluate is identified as the root of problems. Again I have seen business cases put three “gold-plated” options presented for evaluation, completely putting aside the need for a “do-minimum” option and serious consideration of cheaper, smaller scoped options. Is it really a national objective to build a new specialist hospital in South London?
- Failure to consider wider costs and to suggest more certainty in the costing of benefits than is justified
The Treasury reinforce the message that costs and benefits should be calculated for society as a whole in a transparent way, not just the impacts for the proposer. Cost shifting is not a benefit, and extra costs imposed onto the most disadvantaged groups need to be fully identified.
- Transformation is claimed without justification.
The business case does not make clear that the changes in practice proposed are dependent on the investment proposed or that investments will lead to the changes claimed.
- There is a lack of joined up thinking
It is not clear whether wider potential changes to social care, transport policies or to staffing strategies have been factored into proposals.
- Analysis is not robust
This seems to be a polite way of saying that figures have been invented to justify investments.
In addition the Treasury acknowledge many of what they term ‘process errors’: lack of transparency in decision making; the encouragement of speculative bidding based on exaggerated benefits; lack of capacity to review and appraise proposals; overreliance on management consultants; lack of band-width and understanding, experience and consistent rigorous scrutiny of business cases; lack of investment in post project evaluation; and consideration of the impact of inequalities as an afterthought.
They identify what they intend in the revised Green Book:
- To make it a strategic requirement to establish clear objectives in the first place
- Give clearer guidance on Value for Money and to ensure that options are correctly designed at the outset.
- Clarify how to appraise transformational change, explain how place based analysis can be presented, how equalities impacts can be assessed and how environmental impacts costed and discounted.
- There will be a robust strategic case for each investment proposal for 2021.
- A new emphasis on business case review, more training, and closer working with proposers before approval.
- More support, more transparency and more commitment to audit and review.
The implications are likely to be that business cases prepared to justify the hospital building programme announced before the last election need to be reviewed and rewritten, and the priority given to proposals needs to be re-evaluated.
The government needs to be seen to be adequately responding to Covid and the questions it has raised about the NHS capacity and staffing levels. It is simply not good enough to continue to rationalise, centralise and use staff and beds more intensively.
This strategy was an accident waiting to happen, and largely explains why the UK suffered far more than other countries in coping with Covid – closing many services for other patients.
Other options need to be examined and extra resources and staffing required will have to be identified and funded.
Historic underfunding and under capitalisation will have to be remedied rather than further cutbacks to existing services.
Furthermore the government’s new proclaimed commitment to “levelling up” across the country may raise questions about continuing to prioritise the South of England in hospital building projects announced to date, and about the wisdom of increasing traffic and emissions by forcing more centralisation, which makes access for the most disadvantaged worse and directs investment funds towards areas that are healthier and wealthier.
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