What policy options have been considered? Please justify preferred option (further details in Evidence Base)

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1 Title: WORKFORCE PLANNING EDUCATION AND TRAINING CONSULTATION Lead department or agency: Department of Health Other departments or agencies: Impact Assessment (IA) IA No: 8008 Date: 20 December 2010 Stage: Consultation Source of intervention: Domestic Type of measure: Other Summary: Intervention and Options What is the problem under consideration? Why is government intervention necessary? The way we plan and develop the healthcare workforce needs to respond to and support the reforms set out in Equity and Excellence: Liberating the NHS. The current system does not provide healthcare providers with the right incentives and levers to develop their workforce, it focuses often on the needs of professional groups in silos and is underpinned by funding arrangements that are based on historical flows and not the costs of providing education and training. The Department of Health intends to develop a new framework to support healthcare providers build systems and capability, underpinned by strong clinical leadership, to design a more transparent, streamlined multi-professional system. What are the policy objectives and the intended effects? Liberating the NHS: Developing the Healthcare Workforce aims to design a system that can: 1) Provide security of supply of healthcare professionals to support the NHS in achieving excellent health outcomes; 2) Be responsive to changing service models, such that the capacity and skills of current and future staff reflect the needs of patients and local health economies; 3) Deliver continuous improvement in the quality of education & training; 4) Ensure value for money with transparent funding flows across providers; 5) Widen participation and support diversity and equitable access to education, training and development opportunities. The intended effects are sustainable solutions that will lead to improved planning and education commissioning, resulting in improved patient care and value for money. What policy options have been considered? Please justify preferred option (further details in Evidence Base) Option 1. Do Nothing. This is not possible. The Government is committed to strengthening the system for planning and developing the healthcare workforce. The current system can not continue as the Strategic Health Authorities (SHAs) - who have statutory responsibility for workforce planning, education and training - are being abolished in Option 2. Develop a new framework for planning and developing the whole healthcare workforce and commissioning multi-professional education. (We are consulting on this option.) When will the policy be reviewed to establish its impact and the extent to which the policy objectives have been achieved? Are there arrangements in place that will allow a systematic collection of monitoring information for future policy review? It will be reviewed TBC Yes SELECT SIGNATORY Sign-off For consultation stage Impact Assessments: I have read the Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. Signed by the responsible Minister: Secretary of State... Date: 14 th December URN 10/899 Ver /10

2 Summary: Analysis and Evidence Description: Policy Option 1: Do Nothing Price Base Year PV Base Year Time Period Years Net Benefit (Present Value (PV)) ( m) Low: Unknown High: Unknown Best Estimate: m COSTS ( m) Total Transition (Constant Price) Years Average Annual (excl. Transition) (Constant Price) Total Cost (Present Value) Low Optional Optional Optional High Optional Optional Optional Best Estimate Unknown Unknown Unknown Description and scale of key monetised costs by main affected groups Data on the administration costs of the current workforce system is not readily available. It is estimated to total between m (see paragraph 57). The majority of this money is spent by the SHAs and is taken from their Multi Professional Education and Training budget allocations. We will continue to work with partners to improve our understanding of the costs of the current system to have more robust estimates available for the final impact assessment. Other key non-monetised costs by main affected groups BENEFITS ( m) Total Transition (Constant Price) Years Average Annual (excl. Transition) (Constant Price) Total Benefit (Present Value) Low Optional Optional Optional High Optional Optional Optional Best Estimate Unknown Unknown Unknown Description and scale of key monetised benefits by main affected groups As described in the Evidence Base, the Do Nothing option is not sustainable and therefore does not achieve benefits. Other key non-monetised benefits by main affected groups As above. Key assumptions/sensitivities/risks Discount rate (%) Impact on admin burden (AB) ( m): Impact on policy cost savings ( m): In scope New AB: AB savings: Net: Policy cost savings: TBC 2

3 Policy Option 2: Develop a new Education and Training Framework Price Base Year PV Base Year Time Period Years Net Benefit (Present Value (PV)) ( m) Low: Unknown High: Unknown Best Estimate: Unknown COSTS ( m) Total Transition (Constant Price) Years Average Annual (excl. Transition) (Constant Price) Total Cost (Present Value) Low Optional Optional Optional High Optional Optional Optional Best Estimate Unknown Unknown Unknown Description and scale of key monetised costs by main affected groups As the development of the new Education and Training Framework is still in its early stages and the final approach taken will be determined post-consultation, costs have not been monetised at this stage. Other key non-monetised costs by main affected groups Current best estimate is there will be no increase in running costs. This will be detemined post-consultation. It is anticipated that there will be some transitional costs involved in the setting up of new organisations and the transfer of functions. However, the new education and training system will, as far as possible, align with organisations and systems being developed as part of the wider White Paper (Equity and Excellence: Liberating the NHS) reforms. BENEFITS ( m) Total Transition (Constant Price) Years Average Annual (excl. Transition) (Constant Price) Total Benefit (Present Value) Low Optional Optional Optional High Optional Optional Optional Best Estimate Unknown Unknown Unknown Description and scale of key monetised benefits by main affected groups As the development of the new Education and Training Framework is still in its early stages and the final approach taken will be determined post-consultation, benefits have not been monetised at this stage. Other key non-monetised benefits by main affected groups Better integration of workforce planning with service and financial planning. Better integration with the wider healthcare system Better value for money Improved capability Sustainable and transparent investment in education and training Key assumptions/sensitivities/risks Discount rate (%) Key assumptions to achieving benefits:- - Ensuring suitable governance structures are in place - Ensuring checks and balances are in place to avoid market failures This impact assessment assumes there will only be an impact on the public sector. This will be reviewed as the final impact assessment is developed. Impact on admin burden (AB) ( m): Impact on policy cost savings ( m): In scope New AB: AB savings: Net: Policy cost savings: TBC 3

4 Enforcement, Implementation and Wider Impacts What is the geographic coverage of the policy/option? From what date will the policy be implemented? Which organisation(s) will enforce the policy? What is the annual change in enforcement cost ( m)? Does enforcement comply with Hampton principles? Does implementation go beyond minimum EU requirements? What is the CO 2 equivalent change in greenhouse gas emissions? (Million tonnes CO 2 equivalent) Does the proposal have an impact on competition? What proportion (%) of Total PV costs/benefits is directly attributable to primary legislation, if applicable? Annual cost ( m) per organisation (excl. Transition) (Constant Price) England TBC TBC TBC Yes No Traded: TBC Costs: Non-traded: Benefits: Micro < 20 Small Medium Large Are any of these organisations exempt? Yes/No Yes/No Yes/No Yes/No Yes/No Specific Impact Tests: Checklist Set out in the table below where information on any SITs undertaken as part of the analysis of the policy options can be found in the evidence base. For guidance on how to complete each test, double-click on the link for the guidance provided by the relevant department. Please note this checklist is not intended to list each and every statutory consideration that departments should take into account when deciding which policy option to follow. It is the responsibility of departments to make sure that their duties are complied with. Does your policy option/proposal have an impact on? Impact Page ref within IA Statutory equality duties 1 Statutory Equality Duties Impact Test guidance Economic impacts TBC 25 Competition Competition Assessment Impact Test guidance TBC 15 Small firms Small Firms Impact Test guidance Yes/No TBC Environmental impacts Greenhouse gas assessment Greenhouse Gas Assessment Impact Test guidance Wider environmental issues Wider Environmental Issues Impact Test guidance No No Social impacts Health and well-being Health and Well-being Impact Test guidance No 15 Human rights Human Rights Impact Test guidance No Justice system Justice Impact Test guidance No Rural proofing Rural Proofing Impact Test guidance No Sustainable development Sustainable Development Impact Test guidance No 1 Race, disability and gender Impact assessments are statutory requirements for relevant policies. Equality statutory requirements will be expanded 2011, once the Equality Bill comes into force. Statutory equality duties part of the Equality Bill apply to GB only. The Toolkit provides advice on statutory equality duties for public authorities with a remit in Northern Ireland. 4

5 Evidence Base (for summary sheets) Notes Use this space to set out the relevant references, evidence, analysis and detailed narrative from which you have generated your policy options or proposal. Please fill in References section. References Include the links to relevant legislation and publications, such as public impact assessment of earlier stages (e.g. Consultation, Final, Enactment). No. Legislation or publication 1 White Paper Equity and Excellence: Liberating the NHS 2 'A Vision for Adult Social Care: Capable Communities and Active Citizens'. 3 An Information Revolution: a consultation on proposals 4 Liberating the NHS: Greater choice and control. A consultation on proposals 5 Planning and Developing the NHS Workforce: The National Framework 6 Healthy Lives, Healthy People: Our strategy for public health in England + Add another row Evidence Base Ensure that the information in this section provides clear evidence of the information provided in the summary pages of this form (recommended maximum of 30 pages). Complete the Annual profile of monetised costs and benefits (transition and recurring) below over the life of the preferred policy (use the spreadsheet attached if the period is longer than 10 years). The spreadsheet also contains an emission changes table that you will need to fill in if your measure has an impact on greenhouse gas emissions. Annual profile of monetised costs and benefits* - ( m) constant prices Transition costs Annual recurring cost Total annual costs Transition benefits Annual recurring benefits Total annual benefits Y 0 Y 1 Y 2 Y 3 Y 4 Y 5 Y 6 Y 7 Y 8 Y 9 * For non-monetised benefits please see summary pages and main evidence base section 5

6 Evidence Base (for summary sheets) A. Scope 1. The role of the Department of Health is changing fundamentally. The forthcoming Health Bill will formalise the relationship between the Department and the NHS, to improve transparency and increase stability while maintaining appropriate accountability. In the future, the Department will have progressively less direct involvement in planning and development of the healthcare workforce, except for the public health services. 2. Over the next few years, the wider health economy and the public sector generally face significant challenges: an ageing and growing population, new technology and higher public expectations and continuing growth in demand. Through developing their Quality, Innovation, Productivity and Prevention (QIPP) plans, the NHS has been planning for some time for a tighter financial environment, with the ambition of achieving efficiency savings of up to 20 billion for reinvestment in front line care. Healthcare staff account for the majority of NHS spending, so having the right mix of skills and empowered professionals will be essential in meeting these challenges. 3. The Department of Health is consulting on a new framework for workforce planning, education and training through the publication of Liberating the NHS: Developing the Healthcare Workforce. This impact assessment should be read in conjunction with the consultation which sets out: the overall vision for workforce planning, education and training the context and case for change the key functions that need to be delivered in a new system the basis for transferring greater responsibility for planning and developing the workforce to healthcare providers arrangements for sector wide oversight and support in developing the future workforce proposals for the new public health workforce proposals for reforming funding flows to be more transparent transitional arrangements the need for fairness, equality and diversity across the healthcare workforce 4. A central feature of the proposed new framework is the commitment, set out in the White Paper: Equity and Excellence: Liberating the NHS, for healthcare providers to drive planning and development of the healthcare workforce. In partnership with clinicians, staff and patients, they will take on many of the workforce functions currently discharged by Strategic Health Authorities (SHAs). The consultation addresses the specific roles and responsibilities of providers of NHS funded health care and public health services and considers where national sector-wide oversight is required whilst recognising the need to empower local employers and clinicians. 5. The new framework will need to continue to deliver a system to manage the education, training and development of the current and future NHS workforce. This covers: development of workforce plans and strategies for investment; commissioning undergraduate training and clinical placements; managing post registration and post graduate training; managing the national recruitment of medical foundation and specialty training; 6

7 investment in continuing professional development; training and development for the wider healthcare workforce at Agenda for Change bands 1-4 in the career framework; managing the NHS Apprenticeships scheme in line with wider government initiatives; allocation and monitoring of investment of education and training funds. Annex 2 summarises the range of roles and responsibilities in the current system. The underlying problem 6. The White Paper reforms are bold. They will liberate professionals and healthcare providers to secure the quality, innovation and productivity needed to improve healthcare outcomes in their localities. The way we plan and develop the healthcare workforce needs to respond to and support these reforms, and align with new ways of commissioning and providing services. 7. There is an opportunity now to review and fundamentally reshape the whole system architecture for planning and developing the workforce. The Department of Health intends to develop a new framework driven by patient needs, based on healthcare provider decisions and underpinned by strong clinical leadership. It will take account of how workforce needs are addressed across the wider healthcare industry, in the delivery of public health services and to reflect the common interests with social care, where there are shared care pathways and cross-boundary flows of staff and skills. 8. The current system for workforce planning and education commissioning is complex and involves many partners. The current system, as led by SHAs has made significant progress in bringing greater security of supply, more focus on quality in clinical education with the introduction of quality metrics, and improved system leadership with national boards such as Medical Education England providing a more coherent voice across the individual professional groups. It is important that the new framework builds on these achievements. 9. Equally, there are a range of issues which highlight the need for change: a. the perceived view is that the current system is too top down, such that local employers do not have the incentives and levers to innovate and secure the skill mix that they want in delivering better outcomes and productivity; b. service, financial and workforce planning are often poorly integrated, reflecting a lack of alignment of accountabilities and incentives 2. The key lesson from UK and international experience is that it is the effective alignment of service and financial planning with workforce planning and education and training that enables the delivery of high quality care with greater productivity; c. the current funding arrangements are based on historical flows, not the costs of providing education and training. d. medical workforce planning and development is done largely in isolation, currently postgraduate deaneries within SHAs plan, commission, co-ordinate and quality manage post-graduate medical and dental training. This is often done with limited systematic consideration of the wider workforce and limited involvement of healthcare professionals outside the medical profession; 2 Health Select Committee Workforce Planning Report

8 e. there is a need for longer term strategic commissioning to give clearer signals to inform decisions on longer-term investment needed in developing the workforce 3 ; f. there are continued problems with the availability of particular skills due to the lack of clear roles, accountabilities and incentives at different levels. For example, the agency bill for healthcare is now over 1.9bn across all NHS staff groups. Although international recruitment numbers have fallen, 3,100 nurses and 5,200 doctors from outside the UK registered to practice in the last twelve months 4. g. there are issues about the quality of medical training that need to be addressed in the new system 5 with greater local and national accountability for action being taken to ensure patient safety and adequate supervision of trainees. h. there is a need for more consistent, high quality workforce information to provide the foundation for local and national planning. 6 i. many of the existing processes and ways of working have developed over time and follow traditional patterns by looking at supply and demand factors in single professional silos 7. The potential for improving quality and productivity through skills mix change and developing the wider healthcare team is under developed. j. in addition to the workforce planning undertaken by healthcare providers, SHAs spend significant and widely varying sums on planning and commissioning education. There is an opportunity to streamline processes and increase the emphasis on value for money in the future system. k. Although it is reasonable to use international recruitment as a top up to mitigate shortages and correct short term planning errors, however this is not feasible as the foundation for workforce planning in the longer term for the following reasons: there is uncertainty over supply and we have no control over it. Ten years ago the NHS plan committed resources to recruiting over 1,000 doctors through international recruitment but this exercise achieved only a small portion of the required numbers despite significant investment over a number of years in a major international recruitment programme; nurse recruitment was more successful but the major supplying countries are in the developing world and the World Health Organisation code of ethical international recruitment practice, which the UK supports, discourages poaching from vulnerable healthcare systems. There are problems with language skills and standards in EU countries; the USA, Canada Australia and New Zealand are recruiting heavily overseas and sustainability of supply may be even more problematic within such a competitive international market; the right type of specialists are not always available, for example there are world wide shortages in certain specialties such as radiologists and speech therapists and emergency care is not a recognised specialty in most countries outside of the UK; it is difficult to get doctors at the right level and quality. Once a doctor has been trained to consultant level they do not usually want to emigrate because they 3 Impact Assessment for Centre for Workforce Intelligence 4 Nursing & Midwifery Council and General Medical Council 5 Collins (2010) Foundation for Excellence: An Evaluation of the Foundation Programme. Temple (2010) Time for Training: A review of the impact of the European Working Time Directive on the quality of training. 6 Impact assessment for Centre for Workforce Intelligence 7 Kings Fund (2009) NHS Workforce Planning: Limitations and Possibilities. London: Kings Fund 8

9 have established family ties and ties within the system; 10. The expansion of the NHS workforce over the last ten years has enabled services to expand but it has not achieved better productivity and while it has made great strides in the standards of patient care, there is still more work to do. The White Paper reforms provide the right environment and the incentives for healthcare providers to promote improvements in productivity and better healthcare outcomes Investment in the NHS has been protected with a relatively better settlement for healthcare than other public sector services. The future financial environment will, nevertheless, be challenging as healthcare providers seek to cut waste and become more productive. Employers need greater autonomy as they face up to difficult decisions and determine how to improve their services. There is scope now to design a more stream-lined system that is fully multi-professional and shifts the balance to local planning and development for the whole workforce with clear accountability for performance. Background 12. The White Paper, Equity and Excellence, Liberating the NHS set out the following principles for workforce planning, education and training: Healthcare employers and their staff will agree plans and funding for workforce development and training; their decisions will determine education commissioning plans. Education commissioning will be led locally and nationally by the healthcare professions, through Medical Education England for doctors, dentists, healthcare scientists and pharmacists. Similar mechanisms will be put in place for nurses and midwives and the allied health professions. They will work with employers to ensure a multi-disciplinary approach that meets their local needs. The professions will have a leading role in deciding the structure and content of training, and quality standards. All providers of healthcare services will pay to meet the costs of education and training. Transparent funding flows for education and training will support the level playing field between providers. The NHS Commissioning Board will provide national patient and public oversight of healthcare providers funding plans for training and education, checking that these reflect its strategic commissioning intentions. GP consortia will provide this oversight at local level. The Centre for Workforce Intelligence will act as a consistent source of information and analysis, informing and informed by all levels of the system. 13. The consultation document sets out a new framework and the systems and processes to support it. The consultation will be open and looking for views on how to develop the framework. We expect options to become clearer post-consultation. Therefore, at this 8 9

10 stage, the impact assessment can only set out the broad areas of the system design for consideration. We will develop a more detailed impact assessment post-consultation. B Policy objectives and intended effects 14. The main policy objectives are to create a new framework that is driven by patient needs, based on healthcare provider decisions and underpinned by strong clinical leadership, to do planning for the whole healthcare workforce and commission multi-professional education. 15. In designing the new framework, the over-riding test will be what provides best quality outcomes for patients and the best added value for communities and the wider healthcare sector. 16. The Department of Health is working to design a system that will have the capability to deliver: Security of supply - ensuring sufficient numbers of appropriately trained health care staff, with the right skills in the right place at the right time, able to meet future health needs and achieve health outcomes that are amongst the best in the world. Responsiveness to changing service models - better integration and alignment of workforce planning and development for the whole workforce, with service provision and financial planning, such that the capacity & skills of current and future staff reflect the needs of patients and local communities. High quality education & training that supports safe, high quality care and greater flexibility - aspiring for excellence and innovation in all education and development activity, to build confident and competent healthcare staff able to deliver safe and high quality care, adapt quickly to changing models of service, work in multiprofessional teams and drive knowledge creation and new service models through evidence-based research and innovation. Value for money - ensuring transparent funding flows to support a level playing field across providers, with the right accountabilities and incentives at local and national level to support continuous improvement, and a system able to demonstrate value of the investment in education and training. Widening participation supporting diversity and equitable assess to services and education, training and development opportunities and a system where talent flourishes free from discrimination with everyone having fair opportunities to progress. 17. In developing a new approach to workforce planning, education and training, it is also essential that there is agreement about the underpinning principles that will inform the design. These include: alignment with the wider system design for commissioning and provision of services; ensuring that fairness is at the heart of the new framework and in decision making; ensuring the capability to plan effectively for both current and future workforce requirements; taking an integrated and multi-professional approach to workforce planning and to education and training where possible, with stronger whole workforce approaches; doing at a national level only what is best done at national level leaving maximum opportunities for flexible, local implementation and innovation; 10

11 ensuring effective professional engagement at local and national level, with the professions having a leading role on safety and quality issues; ensuring that arrangements for planning and developing the healthcare workforce have appropriate integration with the approaches to planning and developing the pubic health and social care workforce; ensuring strong partnerships with universities and education providers, to make the most effective use of the skills of educators; making sure there is suitable and transparent investment in education, training and development to provide the skills needed; streamlining processes and structures that are simple, cost effective and efficient; providing clarity of roles, responsibilities and accountabilities; reinforcing values and behaviours which recognise the wider benefit to society of developing the health workforce and skills, and the need for co-operation and collaboration in doing so. 18. The consultation will test whether these are the right high-level objectives and design principles. C. The underlying causes of the problem 19. The problem and its underlying causes are set out in section A. D. Policy options considered i. Do Nothing [Baseline] 20. The do nothing option assumes that the current system architecture for the education and training of the healthcare workforce continues as currently. 21. As has already been noted, the SHAs play a key role in leading the current system. Currently they determine where to invest the budget for education and training. As set out in Equity and Excellence: Liberating the NHS, the SHAs will cease to exist in 2012/ SHAs are currently directed by the Secretary of State to exercise statutory functions 9 therefore it is not possible to abolish SHAs without introducing replacement organisations to take on these roles and functions. The removal of these functions would not lead to a free market for pre-registration education and training without a reform of the wider Higher Education system. 23. In this scenario, workforce planning would still need to take place to inform Higher Education Funding Council for England (HEFCE) decisions on undergraduate numbers and locations. In addition, cooperation and coordination would be required between providers to ensure that suitable placements were available for undergraduates and for doctors in training. 9 The current powers are section 63 of the Public Health and Health Services Act 1968, which confer on the SofS the power to provide or arrange the provision of training etc for persons involved in the provision of NHS or social care, or for persons who 'have it in contemplation' to be involved in the provision of such care. SHAs are currently directed to exercise these functions. There is also the SofS's duty under s.258 of the NHS Act 2006 to secure that facilities are made available for clinical teaching and research. 11

12 24. Furthermore, the funding streams for higher education - both for tuition and for student support - are managed and funded by the Department for Business Innovation and Skills (BIS). If healthcare students were all educated through the same routes as all other students, there would still be an exchequer cost to fund the BIS grants and loans. The total cost of this could equal or exceed the cost to DH of running the NHS bursary scheme and paying tuition fees. This would be particularly true if there were no effective workforce planning, which may lead to an oversupply of trainees, all of whom would cost the exchequer. This approach could also lead to undersupply if healthcare courses became less popular as applicants were required to take on higher loans. 25. It is also probable that any increase in the cost to healthcare students for their training will lead to an increased pressure on pay in the NHS and may also discourage people from choosing a healthcare career. 26. There is significant public investment in England in educating and training the healthcare workforce, with almost 5bn invested through the Multi-Professional Education and Training budget to support undergraduate and postgraduate education, clinical placements and student support. On top of this healthcare employers make their own investment in the specialist skills and continuing professional development of their employees. 27. The Government believes that such investment is in the public interest and that it needs to be underpinned by effective workforce planning to avoid the risks to services that arise when there are insufficient clinical skills. 28. The current system, as led by SHAs and with increasing professional engagement, has made significant progress and the Government is committed to building on this and developing a new framework for planning and developing the healthcare workforce. The Government has given a clear steer that it does not want an unmanaged system for the following reasons: Relying solely on market levers to secure sufficient planning and investment in essential healthcare skills is an unacceptable risk for healthcare provision in this country. Healthcare providers also need to invest more widely in the skills of the whole workforce and to continue to invest in new specialist skills for the healthcare professionals they employ. This local investment by individual providers is equally important if health services are to have the full range of skills they need. Without sufficient local investment to maintain a viable pool of essential skills, local services could be at risk. Education and training programmes in healthcare can be lengthy and are influenced by a complex range of factors. It is difficult to expect individual students and trainees to understand the full spectrum of risks and opportunities in making judgements about their future careers, without the confidence of a sound planning framework. There is significant investment in educating and training new healthcare professionals in order to ensure security of supply and the skills needed to provide healthcare services resulting in a better balance between aggregate supply and demand. Healthcare employers invest in the continuing professional and personal development of their staff. Such investment is in the public interest and it needs to be underpinned by effective workforce planning to avoid the risks to services that arise when there are insufficient clinical skills and appropriate funding mechanisms which provide incentives and allow responsibility for education and training decisions to be taken in the right place, to be transparent and to drive quality and value for money. Although they take differing approaches, most developed countries are increasing their investment in workforce planning and analysis, so that they can align service planning with the development of multi-professional workforce models to improve healthcare outcomes. The absence of planning in countries like the United States is seen often as 12

13 a major constraint 10. The Department of Health recently visited the Netherlands, which has adopted a similar overall system architecture. The Netherlands experience is that healthcare providers are not likely to be effective in securing workforce sustainability without incentives and co-ordinating mechanisms. The Netherlands government have had to introduce local co-ordination mechanisms to resolve its nursing shortages and avoid further local market failure and ensure sufficient future supply. The previous government accepted, in its responses to the House of Commons Health Select Committee (2007) and the Tooke Inquiry into Modernising Medical Careers: Aspiring to Excellence (2008), that the approach to workforce planning needed to be strengthened. The Health Select Committee identified that there was insufficient focus on long term strategic planning and that there were too few people with the ability and skill to plan effectively, that the system was poorly integrated and that there was a lack of co-ordination between workforce, activity and financial planning. This led to the establishment of the Centre for Workforce Intelligence (CfWI) to provide strong system leadership for workforce planning, investment in capability and knowledge across health and social care and improve access to evidence, intelligence and analysis To provide sustainable and improving services, healthcare providers need to operate within a functional local and national healthcare labour market and not in isolation. Creating functional labour markets for healthcare systems is not within the gift of any single healthcare provider, however big or however specialist. It is a strength of the current system that NHS healthcare providers are empowered to cooperate in planning and developing the workforce. Most now work together successfully in local networks so that they can plan for and secure the skills needed across their local health economy, and work together to tackle local skills gaps where they emerge. 30. Healthcare providers should have the right incentives to welcome and make use of the opportunities of a more provider-led approach to the development of the workforce. Past experience in England and lessons from other countries suggests that there are potential risks in a wholly devolved system: - providers may take more short-term decisions in response to current pressures 12, with insufficient attention to the longer-term investment in the development of the future workforce; - the length of time it can take to correct an undersupply of key healthcare professionals, due to the length of training; - providers securing the skills they need by buying them in; - individual providers not being able to offer the appropriate range of training opportunities and breadth of training required to train a complex workforce; - challenges where the labour market for particular professional groups (particularly smaller groups) needs to be considered across a larger area; - focusing on the current service that relies, for example, on doctors in training for delivery, can limit medium to long term planning of the workforce. ii. Options 31. In the consultation, we have put forward proposals for a new framework for planning and developing the healthcare workforce and commissioning multi-professional education. The Government wants to engage widely to design and put in place this framework and the consultation tests whether the proposals put forward are the right ones. 10 Kings Fund (2009) NHS Workforce Planning: Limitations and Possibilities London: Kings Fund 11 Impact assessment for CfWI 12 Kings Fund (2009) NHS Workforce Planning: Limitations and Possibilities. London: Kings Fund 13

14 32. The exact composition, size and functions of the organisations within this proposed system framework is to be consulted upon so it is not possible to describe every possible option that is within that scope. The consultation document sets out the broad shape of the future system architecture and the functions that need to be delivered both now and in the future. 33. DH is committed to having an open debate about the future system for workforce planning and education and training and we have not been over prescriptive in the consultation. 34. The new framework for planning and developing the healthcare workforce rests on the transfer of greater responsibility to healthcare providers in line with the other reforms in the White Paper. In designing a new framework, it must be recognised that: the responsibilities for planning and developing the workforce apply to all providers of NHS funded care, and builds on the pledges set out in the NHS Constitution in exercising these responsibilities healthcare providers have an obligation to plan thoughtfully for the whole workforce and take commissioning decisions on a sustainable basis, and in taking the opportunities for a more provider led system, there is also a need for clear duties for providers and appropriate checks and balances to provide accountability. 35. It is proposed that the framework will have: A new national executive body to take on those functions that need to be carried out at a national level. It would act on behalf of the health care sector to bring together the interests of healthcare providers, staff, patients and the professions, providing sector-wide oversight for long-term planning and commissioning for future generations. It would hold and allocate the education & training budget. Healthcare providers working together in skills networks, to plan and commission education and training for the local health economy. These would be legal entities, able to take on SHA education and training functions, created, owned and funded by healthcare providers, including GPs, with representation from social care and public health. A national workforce intelligence organisation that can provide analytical support, leadership and expert authoritative advice on workforce planning to the whole healthcare sector, building on the role of the Centre for Workforce Intelligence. Annex 3 sets out a diagram of the proposed new framework. Investment in the workforce 36. The consultation covers funding issues and seeks views on how to introduce transparency. 37. There is significant public investment in England in educating and training new public health and healthcare professionals in order to secure the skills needed to provide health and healthcare services. There needs to be appropriate funding mechanisms which provide incentives and allow responsibility for education and training decisions to be in the right place, to be transparent, and to drive quality and value for money. 38. Relying solely on market levers to secure sufficient planning and investment in essential healthcare skills is an unacceptable risk for healthcare provision in this country. It would 14

15 iii. also be unfair if only some healthcare providers bore the costs of providing skills to the local labour market. Over time we intend to move to a levy on healthcare providers to provide the investment needed to train the next generation of healthcare professionals. This will provide a level playing field for healthcare providers and ensure that everyone invests in the totality of education and training required to train future healthcare professionals. Training the next generation of healthcare professionals is only one aspect of developing the workforce. Healthcare providers also need to invest more widely in the skills of the whole workforce and to continue to invest in new and specialist skills for the healthcare professionals they employ. 39. This local investment by all local individual healthcare providers is equally important if health services are to have the full range of skills they need. Without sufficient local investment to maintain a viable pool of essential skills, local services could be at risk and come to rely on expensive and inconsistent agency supply. It would not be appropriate to apply a national levy to fund the local investment that is needed to train and develop the existing healthcare workforce. Other mechanisms are needed to ensure that local healthcare labour markets function well so that local communities have access to the full range of skills needed to provide the quality outcome improvements. 40. Depending on the nature of any changes, the impact will be assessed in the final impact assessment or a separate impact assessment will be produced. 41. We recognise that the new framework may have an impact on competition and we have set out specific questions in the consultation. We will consider this issue in more detail post-consultation and provide the relevant assessment in the final impact assessment. Derivation of options 42. The framework outlined in the consultation document is intended to meet the objectives already set out at paragraph 16, which served as the criteria for developing the options upon which we are consulting, and mitigate the identified risks in para We expect that the consultation process will enable us to develop a fuller understanding of the impacts of the proposed new system, including the impact on equality and diversity. 44. A final Equality Impact Assessment (EqIA) screening will be completed post-consultation. If appropriate, a full EqIA will be developed once the education and training framework has been developed and published. Annex 4 sets our the equalities questions we are consulting on. 45. We have carried out the health and well being screening and confirm the proposals do not have any impact on health or health equalities iv. Options assessed 1. Do Nothing (This is not possible, as SHAs- who have statutory responsibility for workforce planning, education and training - are being abolished in 2012) 2. Develop a new Education and Training Framework for planning and developing the whole healthcare workforce. (We are consulting on this option.) E. Impacts, Costs and Benefits of Option 2 i. Summary of Option At this stage in our policy development we have set out how a new framework for planning and developing the healthcare workforce and commissioning multi-professional education might look, taking account of direction from the Secretary of State that the consultation should encourage an open debate. The full details of the proposed new 15

16 system architecture are therefore not known at present. The proposed functions and rationale for the framework, set out below, will be tested through the consultation. A new national executive body (Health Education England (HEE)) 47. Function: The executive body will have four main functions: 1. Providing national leadership on planning and developing the healthcare workforce Bringing together the interests of healthcare providers, staff, patients and the professions Providing a coherent professional voice and promoting strong clinical leadership nationally and locally relating to education and training, and the planning and development of the professional workforce. Providing sector-wide oversight for planning and commissioning education and training for the next generation of healthcare professionals Commissioning education and training where this is most effectively achieved at a national level and co-ordinating with placement providers for quality outcomes, e.g. for smaller professions and specialist skills Liaising with equivalent bodies in the devolved administrations to assure a UK wide approach where this is relevant 2.Ensuring the development of healthcare provider skills networks Supporting an effective and comprehensive system of healthcare provider networks that are responsive to the needs of patients and local communities, and possess the necessary educational expertise and interface Scrutiny of overall education and training plans of provider networks against strategic commissioning intentions of the NHS Commissioning Board, alongside current service needs Development of healthcare provider networks for small professional groups 3.Promoting high quality education and training that is responsive to the changing needs of patients and local communities Championing the greater involvement of patients and local communities in planning and developing a diverse workforce Promoting strong clinical leadership nationally and locally and embedding in training programmes Setting the framework for continuous quality improvement, assurance of the quality outcomes of education and training, and reviewing curricula to make sure they meet the needs of patients and the public. Engaging with the professional regulators on the alignment and development of standards and training to meet the changing needs of services Engaging with national education bodies including higher education and further education to represent the interests of the healthcare sector and to drive a strategic approach for smaller professions Engaging with Monitor and the Care Quality Commission (CQC) on the planning and development of the healthcare workforce 4.Allocating and accounting for NHS education and training resources 16

17 Allocating NHS resources to healthcare provider networks for the management and provision of education and training, funded by the national education and training levy, in a transparent and fair manner Promoting cost-effective workforce planning and value for money in the provision of education and training, and improving the evidence base on cost-effectiveness Taking a strategic overview of all aspects of financial support for the education and training of healthcare professionals, across different funding streams and across all professional groups and stages of training, such that the overall approach to funding and support is informed by provider network plans and workforce analysis Strategic planning with HEFCE on joint investment plans and the needs of the healthcare sector 48. Rationale : HEE will support healthcare providers by focusing on those workforce issues that need to be managed nationally and cannot be delivered by local provider networks. It will take on the current advisory role of Medical Education England and the professional advisory boards for nursing and midwifery, and the allied health professions. Healthcare providers working together in skills networks 49. Function: To plan and commission education and training for the local health economy, it is proposed that healthcare providers will work in skills networks. These will be a legal entity created, owned and funded by healthcare providers, with representation from social care and public health. Healthcare providers will determine how they network to exercise their responsibilities in respect of planning and developing the healthcare workforce. 50. The functions undertaken by a healthcare provider network might include: Managing and co-ordinating workforce data and workforce plans for the local health economy that respond to GP consortia strategic commissioning plans Developing on behalf of healthcare providers a local skills and development strategy Consultation with patients, local communities, staff and service commissioners to ensure that their views are reflected in the local skills and development strategy Improving the quality of local workforce data, and providing the Centre for Workforce Intelligence with that data Holding and allocating funding for the provision of education and training and accountability for education and training funding from the national education and training levy. Contracting for the provision of education and training with education providers and healthcare providers Responsibility for ensuring value for money throughout the commissioning of education and training Taking a multi-professional approach to managing the provision of clinical placements and post registration and post-graduate education and training programmes and continuing professional development, including the current deanery functions, against quality and cost metrics Partnership working with Universities and other education providers Working with local authorities in taking a joined-up approach across the health and social care workforce Ensuring continuous quality improvement and assurance of educator standards (in particular relating to postgraduate education) Contributing, as appropriate, to the development of national policies and issues 17

18 51. Rationale: There is a need to put in place a legal entity, able to take on SHA education and training functions and the responsibility for ensuring quality and value for money for undergraduate clinical placements and post-graduate education, training and development. 52. Healthcare provider skills networks will meet the wider white paper commitment to put healthcare providers in the driving seat whilst mitigating the risks of individual providers working in isolation summarised earlier. A national workforce intelligence organisation 53. Function: To provide analytical support, leadership and expert authoritative advice on workforce planning to the whole healthcare sector, building on the role of the Centre for Workforce Intelligence. 54. Rationale: The NHS requires a world class workforce information system. Quality information, combined with the right support, will be key to delivering better care, better outcomes and reduced costs. High quality workforce information will support the effective alignment of service, financial and workforce plans, which should in turn inform appropriate commissioning of education and training. 55. Longer term workforce planning in health requires a significant level of modelling and analytical capability, that can translate local plans for the future shape and scale of the workforce into viable education commissioning plans. This requires an understanding of cross-boundary flows and of national and international labour market dynamics. Some healthcare providers may wish to develop such expertise, others will look for external support for such specialist analytical resource. 56. A national workforce intelligence organisation is necessary to act as an independent arbiter in the system, outside of the Department of Health and HEE. Longer- term workforce planning to health requires a significant level of modelling and analytical capability that can translate local workforce plans into intelligence that healthcare providers and HEE can use to develop into a viable education commissioning strategy to inform the investment needed for educating and training the workforce. This role is currently provided by the Centre for Workforce Intelligence, which was created to develop deep expertise about the health and social care labour market and workforce models, and to undertake horizon scanning so that future risks and opportunities for the health and social care workforce at a local, national and international level are identified. ii. Impacts, Costs and Benefits of Option Data on the administration costs of the current workforce planning, education and training and education commissioning system architecture are not readily available. However, we estimate that the costs of functions currently carried out by DH SHAs (including deanery functions) Centre for Workforce Intelligence Medical Education England Nursing and Midwifery Professional Advisory Board Allied Health Professions Advisory Board UK Foundation Programme Office National specialty recruitment programmes 18

19 total between 200m - 250m. The majority of this money is spent by the SHAs and is taken from their MPET allocations. We will continue to work with partners to improve our understanding of the costs of the current system and to have more robust estimates available for the final IA. 58. We do not have data on the amount spent at a local level by providers on the administration of the workforce planning and education and training system. Costs of Option The issues being consulted upon will not have any direct bearing on the unit costs of education and training itself, either for pre-registration or post-registration training. It is anticipated that in the new system, there will be a greater emphasis on value for money in education and training, which may lead to a reduction in costs. 60. Until the consultation has concluded, it is not possible to estimate what the administrative costs might be under any new system architecture, as it will depend on a number of factors that are the subject of consultation. The size, shape and functions of the organisations that form the new system architecture will be determined post-consultation and will be the biggest drivers of the future administrative costs. 61. In the proposed framework, the provider networks will take on the majority of the functions currently discharged by the SHAs with respect to education and training. They will therefore bear the majority of the costs in the new system. 62. Until we are able to define their size shape and functions more clearly post-consultation, it is difficult to estimate how much they will cost. For example, 15 organisations employing 120 WTE staff at an average paybill cost of 60,000 would have staff costs of around 108m whereas 40 organisations employing 80 staff at the same average would have staff costs of around 192m. 63. In addition to the staff costs, there will be additional costs to run the system. Currently, we estimate non-staffing costs for the education and training work in SHAs to be between 40m and 60m. Note that the functions currently discharged by SHAs have not been mapped to the proposed new system architecture and this is subject to consultation. 64. There will also be (dis)economies of scale around the organisational costs for the new system, which will depend on the number of provider networks in the new system and how they are organised; for example number of offices etc. 65. For the final Impact Assessment, we will present more detailed and robust costs for each element of the new system. Value for money will be a key consideration in the final decision between options in the final Impact Assessment. 66. Clearly, in the current economic climate, the emphasis on reducing administrative burdens means that the final policy options should be developed with the intention of a reduction in the running costs of the education and training system. 67. It is anticipated that there will be setup costs associated with the creation of the new bodies envisaged in the proposed framework. These costs will be estimated when the size, shape and functions of these bodies is determined post-consultation. 68. We do not expect that the new system will change the administrative burden at the provider level (for individual trusts, for example) and, therefore, we expect there will be a zero marginal cost as a result of this policy. We will assess the impact of the final options at local level post-consultation. Benefits of Option 2 19

20 69. The new provider networks are intended to increase local ownership and accountability for workforce planning. Over time, this should lead to improvements in the capability of healthcare providers to plan their workforces effectively. 70. The proposed changes are intended to lead to a greater integration between service planning and commissioning and workforce planning and education commissioning, through better local involvement and more transparent funding streams. 71. The proposals are intended to increase the involvement of healthcare professionals - working multi-professionally - in workforce planning, education and training and education commissioning. The intended benefit of this is to maintain focus on the quality of education and training. 72. The new system is intended to increase transparency and accountability for workforce planning, education commissioning and education funding. 73. In the same way that the NHS Commissioning Board will have responsibility for the national functions required for commissioning of services, HEE will only undertake education and training functions that need to be addressed at national level. HEE will have national oversight of education and training, ensuring a balance of interests across the whole of the healthcare sector bringing together the interests of healthcare providers, the professions, patients and staff. It will take account of the interests of social care providers, particularly where these are shared with healthcare providers. It will work with the Department of Health to address the planning and development of the public health workforce. 74. Longer-term workforce planning in health requires a significant level of modelling and analytical capability, that can translate local plans for the future shape and scale of the workforce into viable education commissioning plans. This requires an understanding of cross-boundary flows and of national and international labour market dynamics. High quality workforce information will support the effective alignment of service, financial and workforce plans, which should in turn inform appropriate commissioning of education and training. The Centre for Workforce Intelligence has been created to develop deep expertise about the health and social care labour market and workforce models, and to undertake horizon scanning so that future risks and opportunities for the health and social care workforce at a local, national and international level are identified. Impacts, Risks and Issues of Option There are a number of risks to the sector if a new framework is not developed to support healthcare providers. Free riding and poaching of trained staff by employers who are reluctant to train staff themselves. Short-termism and failure to invest sufficiently in the next generation of healthcare professionals, and local failures to invest in specialist skills. Fragmentation/lack of appropriate scale providing high quality education & training often needs to operate at a larger scale than a single provider. Loss of incentives to improve quality & value due to a blurring of the commissionerprovider separation. Lack of alignment of decisions on workforce supply & decisions on service strategy. Local failures to invest in small professions and specialist skills. Pressures from financial context and changes in funding flows. 20

21 76. Through the consultation process, we intend develop our understanding of the risks in the proposed new system and to address the risks already identified. 77. The Department of Health held an internal workshop with policy leads from each the areas covered by the consultation. This workshop was designed to elicit qualitative information about the risks and issues in the proposed new system. The risks and issues identified in the workshop are set out below: Accountability must be clear. Accountabilities should be well defined at all levels of the system to ensure the correct training and education is carried out. Health Education England s role and resources. The role of HEE is a key issue. They must be given suitable powers and responsibility in order to be able to ensure system viability and delivery of the workforce necessary for a well run NHS. HEE must be properly resourced to perform the role. Transition risks. In the move to a new system, there is a risk that capability and capacity for workforce planning will be lost. Small professions. With planning devolved, there is a risk that small professions are not properly considered. Over/under supply of training. There is a tension between local needs to deliver services and national, long-term planning of the workforce. There is a risk that this tension could lead to an over or under supply of staff. Co-operation. It is important that the organisations in the system co-operate and there is clarity on roles and responsibilities. Coverage of a levy. If a levy system is used introduced it should aim to cover all providers who benefit from national investment in education and training. 21

22 Annexes Annex 1 should be used to set out the Post Implementation Review Plan as detailed below. Further annexes may be added where the Specific Impact Tests yield information relevant to an overall understanding of policy options. Annex 1: Post Implementation Review (PIR) Plan A PIR should be undertaken, usually three to five years after implementation of the policy, but exceptionally a longer period may be more appropriate. A PIR should examine the extent to which the implemented regulations have achieved their objectives, assess their costs and benefits and identify whether they are having any unintended consequences. Please set out the PIR Plan as detailed below. If there is no plan to do a PIR please provide reasons below. Basis of the review: [The basis of the review could be statutory (forming part of the legislation), it could be to review existing policy or there could be a political commitment to review]; DH intends to undertake a review of the Education and Training Framework (due to the long term transition period, this will potentially be during 2016) Review objective: [Is it intended as a proportionate check that regulation is operating as expected to tackle the problem of concern?; or as a wider exploration of the policy approach taken?; or as a link from policy objective to outcome?] Either DH or HEE will consider the extent to which the Education and Training Framework has led to improvements in Education and Training outcomes, and identify any unintended consequences of this approach. Review approach and rationale: [e.g. describe here the review approach (in-depth evaluation, scope review of monitoring data, scan of stakeholder views, etc.) and the rationale that made choosing such an approach] A detailed review strategy will be developed in the light of the consultation responses and the final form of the Education and Training Framework. Baseline: [The current (baseline) position against which the change introduced by the legislation can be measured] Baseline data will exist for currently collected workforce numbers and costs as part of the new system's contract management. Success criteria: [Criteria showing achievement of the policy objectives as set out in the final impact assessment; criteria for modifying or replacing the policy if it does not achieve its objectives] Increased transparency, improved quality, security of supply, improved capability, better value for money, and better integration of workforce planning with service and financial planning. Monitoring information arrangements: [Provide further details of the planned/existing arrangements in place that will allow a systematic collection systematic collection of monitoring information for future policy review] Existing arrangements include workforce numbers collected by the Information Centre. DH monitors financial information around MPET. We expect one or more of the successor organisations to carry out these collections. Reasons for not planning a PIR: [If there is no plan to do a PIR please provide reasons here] It will be developed following the consultation as part of the next phase of development. 22

23 Annex 2 Current roles and responsibilities for planning and developing the NHS workforce 23

24 Annex 3 - Diagram of proposed system architecture 24