Who’s driving?
I can never quite decide which is the worst mainline station in the country (the best is, of course, Marylebone). The field is so strong.

However, Euston is in with a shout. Airless and brutal, its Soviet charms are helped neither by the impressive, tube-strike-related queue for taxis nor by the cack-handed redevelopment of the booking hall.

Credit where it is due, though, the station pub’s staff were charming, helpful and made me a damn good cup of coffee. And their powerpoint actually supplied power.

The supply of power is not the purpose of the powerpoints on the Virgin train from which I write this. They are decorative only; a chimera of false hope. Is this to be an emblem of the next few days?

No sooner have the powerpoints failed to deliver, the train’s PA delivers that fabulous message that we will be making an unscheduled stop at Milton Keynes (nephew of John Maynard Keynes) to pick up our driver. Yes, that’s right. There’s obviously a joyrider in the cab at present. To be fair, unlike the economy, we haven’t crashed yet.

But who’s driving? It’s a crucial question for the NHS to face as cash constraints become an imminent reality. The question should probably be rephrased through an economic paradigm: who’s committing resources? Tom Smith’s latest Health Policy Today touched on this significant issue. How much will we be hearing about clinical engagement and involvement? Will primary care get as much as a mention?

Fair play to the Confed, their April briefing paper Developing NHS leadership: the role of the trust medical director looked at one important aspect of clinical engagement, but principally in acute care. The old ‘National Hospital Service’ jibe seems as true as ever, depressingly.

Wisely, the paper does observee that clinical followership is just as important as clinical leadership. The massive expansion in the number of consultants in the NHS has broadened the pool considerably. Discontent over training opportunities and EWTD-related issues remain serious issues. It is harder to lead discontented followers.

The report also rightly notes that the different specialties present different challenges for leadership and followership; as do they dynamics of very small specialties as opposed to very big ones.

Arrival
I have arrived in Liverpool. I am in a cab to the hotel. It is grey and raining. And my cab driver is wearing mirrored sunglasses.

The horror. The horror.

Always at NHS Confed, the set gives a message. It is not always necessarily the one intended. The screens show a watery spiral – it looks as if the water (like the money?) is going down the plughole

Bryan Stoaten (chair): “The Confederation must make the weather; not reach for the umbrella”. Confed members can now join the Institute of Directors without paying the joining fee.

Steve Barnett, chief executive, opened by referring to his nine-month interim tenure before the substantive appointment as an “interesting period”

“This is the most challenging, make-or-break period in the history of the NHS. Impossible to over-estimate scale of challenges over next few years. Most severe contraction in finances ever experienced. Figures from Dealing With The Downturn … a vicious circle that we simply must square. A change of government will not change our predicament. Just under two years to take radical action … this time, nothing can be off-limits.

“I am completely committed to ensuring the Confed makes the journey with you and become one of best organisations of its kind in the world”

“Far more than just a commentator … want us to use our strength to become THE dominant voice .. it’s vital that Confed is centre-stage, speaking on behalf of patients and the public, drawing on best minds form around the world, I am determined we will now occupy that space, bringing to bear new levels of challenge, influence and reassure .. do deliver what you, our members, tell us you want to speak. Confed will speak with one voice, but also represent richness and diversity .. what makes us so strong and unique.

“our business is our patients. I also object strongly to popular misconception media and politicians can be run by staff and London. Notion that managers get in way not only misguided, preposterous. Intend to address distortion head-on .. managers are part of the broader team, not sitting on the bench.

“Can we deal with adversity? Yes. You said the same things We’re up for it. Think of what we’ve achieved in the last few years. Workforce growth, unprecedented levels of productivity, quality and waiting times.

Of all the things we must do, I would put innovation at the top. No-one innovates in a boom. The need is now imperative - local leaders must create incentives today for culture of innovation to pervade the NHS tomorrow”.

David Nicholson: inventor of the word ‘and'
“What we are doing in the NHS … we are at a critical juncture, what we do over the next 18 months is crucial to years to come, delighted to deal with these wicked issues with you.

"A predecessor in this job told me 'you should never leave the office in Whitehall, extraordinary things start to happen'. Last week I went away leaving Alan Johnson as health secretary, and I came back to Andy Burnham. I spoke to Alan Johnson recently, and he had he'd been very keen on health, but that the Home Office is an extraordinary job, and he now gets driven around in an armoured car’. I told him, ‘now you know what Patricia Hewitt felt like!’

"How I think we’re doing, we’ve done a remarkable job over the last few years delivered everything we’ve been asked to do – 18 weeks, reductions in HAIs, GP access. They’re not just targets, ideas – they have a real human consequence. In Newcastle I met a man who had heart surgery – not long ago, that would have been 18 months anxiety … he had his operation at a time to suit him and his family. Over 70% of GP surgeries opening evenings and weekends, so stressed chief executives working in Whitehall can get their blood pressure checked.

“HAIs … individuals have really improved their care. These real human bits are very important. We've not just delivered, we've also been changing nature of system we run. This is very important to all of us, I know. We've significantly increased number of FTs, important mechanism to give clinicians and the public freedom to innovate. Increased choice, bow have free choice, 127 private organisations now provide NHS services at NHS tariff and NHS quality We've relaunched PBC as clinical commissioning to ensured clinicians engaged .. not just same old things in same old way.

“We've also put ourselves in a good position with stakeholders: patients public and staff. Patient survey big jump rating excellent. Over the past 2 years, the staff survey shows more job satisfaction. For taxpayers' views, look at British Attitude Survey and MORI data: taxpayers never had more confidence in the NHS's ability to deliver a top-drawer service for patients.

“This was not done by politicians, commentators or academics, it was done by people in this room and you should be remarkable proud, thanks for hard work, time, determination and effort (no applause from delegates).

“But we're only as good as what we do tomorrow, Need to improve some important areas. Two areas cause me particular worry – Mid-Staffs and Michaels Report on how acutes treat people with learning difficulties.

"There are three main lessons for you:
1. vulnerable people – how we treat them in our system is critical. Don’t just design around the fit and articulate who can drive choice. We must cater for them, but the vulnerable need a particularly important focus. If we get services right for vulnerable, chances are we get them right for everybody.
2. how do we deal with criticism as a service? I’m first to stand up and defend the NHS if criticism is unjust, but individual organisations sometimes respond by denial and get into real trouble, We have to be open in how we interact with pubic and the media. Don’t immediately respond ‘can’t be true’ – have a look, explore in detail. Important to avoid denial.
3. Asking for help is important. Work in service and focus on what doing as team. Sometimes, it’s very difficult. Some of the best leaders I worked with have had to take steps back, when things have gone less well than they should, and managers should feel they can ask for help. Too often, they just carry on and try to do their best. Across the whole system, the talent and experience in this room should be available to those in difficulty. In the past, we've done this in a top-down, chessboard way. Those days are gone and organisations are not like that any more. As leaders, how we work together to support people is important. Someone may not be the best CE in a particular area or trust, but could still have a massive contribution to make to the NHS. If we think like that, we'll be much more likely to get openness, and identify problems and put them right.

"The financial position is tough, no doubt. But where we are – over next 2 years, we'll get 11% growth in NHS budget: an extraordinary amount and remarkable vote of confidence. then essentially funding will be frozen over several years, so all pressures on demography, medical technology and pay – we'll have to fund out of the work we do on QIPP. Both parties promise real-terms growth, fantastic, but not at level we have now or in the recent past. Even if they can provide it for us, will be incredibly tough as we go forward.

"In those circumstances success is not guaranteed and it could all go wrong for us. I worry if the NHS tackles this as it's tackled challenges in the past, the chances are we will not be successful.

"In the worst-case scenario, people chat about this; shake their heads; blame the PCT / FT, whom they should charge … and won’t think about it again till Christmas 2010, Just carry on. Then we get to the end of 2010-11; the money dries up; and people will rush around finding ways to deal with the problem. Then winter will be difficult; the service will lack extra capacity; ambulances pile up; trolleys come out; waiting lists bulge … you can imagine. managers and clinicians at loggerheads. Clinicians can think 'we're here about quality; managers are over there about cost-containment'. Politicians say model not sustainable, need new ways, some kind of massive management reorganisation. Could all happen if use ways of past.

"It's not inevitable. People in this room are going to have to take us forward and make necessary changes.

"How? It's obvious at one level. To make any large-scale changes must be clear on strategy – where are where going; systems and processes to underpin; and the right culture and mindset to take us forward.

"The NHS is obsessed with systems and processes. One reason we got so stuffed in 2004-5, was due to a technical focus, we lost the staff and we couldn’t explain the reform journey to patients and the public.

"We've had the Next-Stage Review and High-Quality Care For All. 10 SHA visions in service terms. PCTs WCC assurance gives them strategic objectives. Compelling strategy where are and going. But I’m particuarly interested in culture and mindset. Traditionally, what happens is that board sits and says, 'there's a problem with culture in our organisation, they’ve got to change'. This has happened in the DH …

“I thought about what culture we want to develop, not for the service as a whole, but our own culture in the DH, our interactions and dealing with issues. Starts at individual board. Got management consultants … the silver bullet is the word ‘and’ – it's very powerful. It's perfectly possible to have co-operation AND competition. Not to be driven by the tabloid approach of either-or. I was recently at the opening of a GP 8-8 heathcentre in Sheffield,, and it is there because we used competition and contestability. But we had to work on co-operation with stakeholders. So it's competition and co-operation. Quality and productivity are possible. Look at progress on HAIs – we can save huge amounts of money and make services better.

“Looking at the system – productivity and quality gains at primary-secondary and NHS-social care interfaces. Be most efficient in world, but unless maxing across system, won’t do it. Can treble benefits in quality and productivity by improving integration.

“Big challenges for leaders and managers, but have some time, Got 18 months to plan and organise and invest in people, service s and invention

“Investing in people and leadership: you will have seen how really good leadership makes such a difference. System and organisation has responsibility to support. Leadership council set up not to do things to NHS but for the NHS and accountable, doing things only we can do nationally.

“A little bit about systems and processes. Last 10 years, NHS and DH build for growth, to drive capacity in the system. PBR’s operation drives capacity and activity – what we needed in period of rapid growth, but not what we need now, Incumbent on us s system to think about those processes and systems individually, and see if really capable of taking us through time when resources much more restricted. Will engage all of you in it – every board in every NHS organisation to have their say how take things forward – what locally, regionally and nationally. Only that way will we get clear settlement, Sometimes, we start talking about centralisation and decentralisation as if it’s either / or. Sometimes, the NHS should do a thing only once, not hundreds of times. procurement, back office, in really different way to drive changes and cost reductions collectively - the ‘only-once' things, Need discussion, before operating framework, so clarity by autumn.

“Also innovation – it’s about inventions, but more importantly, adoption and diffusion. Massive variation across system, and well-evidenced things should all do Think how to drive adoption. Go to Innovation Expo, which will be a phenomenal event, over 100 countries coming to learn about us and see where we are ahead of the game.

I’ve tried to identify the fantastic platform we have. There should be no more top-down reorganisations or national targets”.

Responding to a question: “when we’ve dealt with procurement, variation in primary care and people wrongfully in hospital, we can look at marginal things or discuss more restrictions”.

Andrew Lansley: RSA speech (slight return)
OK, it's a tad unfair. And he is a policynik of the highest order. But Lansley's political apologia was probably more for the national media present than the delegates, who have seen far worse abuses of public money.

What did he say again? Equity; efficiency; excellence. Got that bit.

Funding commitments on growth: oh dear. Not at all clear about that bit.

There was one very interesting delegate question about the timescale for hard budgets for practice-based commissioning. We've known about the Conservative policy of hard budgets for PBC since 2007, but this was the firts time I have heard him put on the figure of bringing 'real PBC' in one year after they take office. That was quite interesting.

Other than that, it was his RSA speech again.

Press conference: NHS CE David Nicholson, NHS Confed CE Steve Barnett and NHS Confed policy director Nigel Edwards
Is there an appetite or willingness to start on negotiating the next pay settlement?
SB: year 3 of the current deal is to be honoured, and Andrew Lansley's also committed to that, so there's no re-opening that. From now, we need to talk maturely with trades unions about next phase of pay bargaining. I don’t foresee FTs using freedoms to set own pay: it’s too difficult; and they lack the labour market data, or the capacity and capability internally.

Nationally, we should sit down with the unions, in the light of what's coming in the next 5-7 years, we need a very mature approach. In Ireland, there are not pay freezes but cuts. This is the reality of the situation. It needs mature debate.

Is there a possibility of job cuts?
SB: I’d say no, but I think we must work closely with the unions about the pattern of pay settlements in hard years, I do not foresee long-term pay deals in period

Public sector pensions will be coming under pressure. New changes to NHS pension scheme, established cost of future liabilities between employers and employees, and employees have paid more to protect benefits in scheme. It could be something in years to come on the table. Talking about total reward package. Kinds of pay, protect benefits in pension scheme, raining, development, career opportunities, so look at total reward, anticipate unions up for that, the sooner we get into these issues, the easier it'll be to handle in the future

Would that mean a good pension scheme but lower / no pay?
SB: Total package in all NHS working benefits, other had recognised that if we’re in sa ituation potentially £20 billion short of current investment levels, mature people in partnerships have got to talk about how it's managed. The future year-on-year automatic assumption could be zeroflation or deflation. A mature approach would lok at the total package.

And this is not just a goverment problems issue for trades unions.

Are you clear on Andrew Lansley’s position on pay settlements and future funding?
SB: We would like certainty on a possible Conservative government pay and pensions approach, and I'll follow this up with Andrew Lansley. If we're clear about their line on pay, that's fine, but we would want to know well before the reality

Do you think the saving assumptions being made from commissioning are on the modest side or on the heroic side?
SB: We can’t be absolutely certain of savings discussed, something of leap of faith, possibly well-intentioned, but not all GP practices want hard budgets for PBC or PCTs yet have the WCC competencies. Capacities for PBC likewise.

It's not automatic that if you give responsibility to PCTs, WCC follows.

By reaching a ‘leaner’ NHS with fewer jobs, could the changes avoid compulsory redundancies?

SB: at this stage, the timeframe’s so lengthy that given natural turnover of a 1.4 million workforce, and the move to re-providing care in different settings, there should be enough time to plan for that. We certainly can’t foresee the rate of workforce growth continuing

Where would we be if there are still 1.4 million staff and a leaner NHS?
SB: No idea really, that depends on the government of the day's policies

NE: there could be a trade-off between pay and jobs over 3 yreas 10% cost pressure, new types of jobs

How to decide what should be arranged locally, regionally and nationally?
NE: if PBR is not right for something, we need to avoid having 152 different variations for each PCT provider arm. There are things it's logical to do nationally. NHS Evidence, Map Of Medicine, and ther’s also the middle option - let PCTs experiment; other things want very local design and reconfiguration

Is PBR the main system reform thing to be looked at – do you see a halfway house between that and block contracts for the next few years?
DN: I’m not saying scrap PBR

NE: it can be very suitable for elective care

DN: Two decisions are needed. One, what flexibility does it give locally, so we’re clear what’s allowed and what’s not. The other bit is as part of the mix, LTC management (from prevention to avoiding hospitalisation) is a crucial bit of reshaping. Does the way of designing PBR episodically give us the best incentives to give the right results for LTC management?

This links to PBC, and part of the issue to give people the tools to make LTC imrprovements happen. PBR drives capacity - as it was meant to

NE: sometimes, if you optimise individual bits of a pathway, you create a sub-optimal total pathway

David, you talked in your speech about supporting managers in difficult times in your speech. Do you think that Julian Nettel and Tara Donnelly were supported?
DN: it's not appropriate to talk about individuals, but the NHS has a collective responsibility to help people. When I was a regional director in Trent, we expected top-level performance, and managers had to take risks. Some didn’t pay off, but we'd done a deal with them, with the health community: you push out and do your best; we'll look after and support you in your next job or manage a 'rehabilitation'.

We're in a position now where because of the nature of the system, we're not able to do that and move people around, so it's incumbent on us all and on organisations to do this collectively. We should get FT chairs together to work out ways of supporting people. In Trent, we had a 'people levy' to support people through that kind of thing. Because it can happen to really good people, and we should support them.

NE: In those kinds of cases, the NHS can still be bad at telling the difference between the unlucky and the truly bad, we tend to be judgmental

In 18 months, the growth money stops. But there have been financial problems before. Why is it different this time?
DN: when Patricia Hewitt said it, we were bust - significantly overspent. If we look at what happened, bits of country had done very well; others very badly, but othe NHS had a big overall deficit. Actually, it was going on for 3 or 4 years before that.

Now all regions are in real surplus, this year and next, it’s completely different, and we’ve learnt lots about financial management. So in two years' time, when growth funding ends, the wheels will not fall off at once. We're looking 3-4 years ahead.

What struck me when we got into the 04-05 turnaround, people said ‘if only we'd started 6-12 months before’. This is our chance. We do need to take it, that’s why we’re talking about it now, not to get people anxious excitable, frightened. We’ve got time to do soemthing about it – got a good record with time to plan, can ensure deliver on quality and productivity. When you get into the depths of financial problems, you just have to react fast and do things you’d otherwise not want to. Now, we have a surplus to use.

Do you see any areas where user charges could come in?
NE: The fundamental NHS offer is that care is free. The type of money user charges could generate is small for the effort. It's a complete shift from the NHS offer, I don’t think you can do any of that without exhausting every alternative avenue, and there may be other better ways, to control demand and prevent the problem of moral hazard. User charges are not hugely effective as they seem to deter approprioate use of health services and mess up the one thing most other healthcare systems want to copy: a gatekept primary care that's easy to access is a core part of the system

Have we the time to do this?
DN: We’ve been changing to more emphasis on efficiency and quality for some time, quality of financial management, improving quality post-NSR. We’ve got time, but not a great deal of time. We need a sense of urgency in the system to make happen, or I worry people may just leave it

NE: A student essay approach to management!

DN: I’ve been 31 years in NHS not going to be part of generation to let run into ground. But you know, people are not saying ‘the government should cough up more’; we all read the papers, we can see the economic situation, and the scale of the problem. People know in their own organisation that there are opportunities to reduce cost, but find it tough to get at it. They know of quality improvements they can make. The question is how. We’ve talked for a long time and have little examples of how to to do this on a large scale.

NE: scale is the issue, getting things to a point where we can release large chunks of fixed costs. 18-20 months to prepare. The money will not run out 1 April 2011, but we need momentum. We need culture change.

SB: One risk is that even when people claim they want charge of their own destiny, they still wait for the starting pistol to be fired, and it rarely is. The longer the run-in we give ourselves, the better we'll do.

Have people got the message about the financial storm ahead?
SB: cannot be case everyone has got it yet, but through this event, our document and the Confed's support and information, people will recognise it rapidly

DN: people are up for it. - a crucial issue is to keep the gains made on clinicians and managers working together: this is why the quality issue so important as that's what keep clinicians going – they'll give you examples of the number f times patients have to visit a hospital, where one visit could be arranged to do the lot; or about people in hospital care who don’t need to be. We know it, but we haven’t done it

Is there now an opportunity to debate what the NHS can or can’t pay for?
DN: people may want that debate, let them have it. But we’ver just been through a huge process engaging tens of thousands of people, producing the NHS Constitution. It’s before Parliament. What would be the point of unravelling all of that? Managers are responsible for leading system, and focus on improving and that debate's a sidetrack

NE: with developed nations defining a basic package, everything ends up in it. Nothing really gets excluded. There could be a totally different debate about what tax should fund, but that should happen elsewhere. The NHS should make itself as efficient and high-quality as it can, without big seismic shift to insure

David, you said you do not want the next bit to be like the 04-05 turnaround, but the NAO report on that said patient care didn’t suffer – what should the NHS not repeat?
DN: we should not lose the gains made. Surpluses set you free. If you’re in deficit, you spend huge amount of time accounting to load of outside people, not improving services. Managers spent time talking to the media, and created a public confidence problem in NHS management.

I do think need to engage pubic, important conversations over 12 months, because we had to move so quickly, sometimes, not manage staff as well as we could

NE: remember the 04-05 alarm about redundancies that didn’t happen

Do you see any limits to the ‘and’ school – competition ‘and’ co-operation, et al?
NE: The NHS does nuance poorly. In a sophisticated way, some services should go out to tender by any willing provider; send the NHS the bill. Others must be planned, others sit somewhere between, we have to work it out one at a time based on the nature of the local health community.

DN: Competition's not an end in itself. Where traditionally there’s been a poor service, competition could be the way you improve it.