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One million employees and it's still not enough

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The Department of Healths HR director, Andrew Foster, is at the heart of plans to modernise the NHS. Peter Oborne talks to him about the sheer scale of his task

No human resources job in the Western world is anywhere near as big as the one done by the quiet, softly-spoken Andrew Foster. He is director of HR at the Department of Health. There are only two bigger organisations than ours, he admits. There is the Chinese army with slightly more than two and a half million. But perhaps they cheat because they use conscription. And there is Indian Railways with 1.7 million employees. By comparison were chicken feed at just 1.1 million.


The NHS is a colossal job. But it is not simply the size that matters. The sheer importance and complexity cannot be underestimated and Tony Blair has made reform of the NHS his number one priority since the last election. The organisation is being changed modernised is the loaded word Blairites prefer in order to make it work in the 21st century. Working practices, recruitment, career structures, local organisation, the relationship between head office and the regions at every level it is changing. The consequences are vast the health not merely of the Government but the country as a whole depends on the reforms success.


Foster is at the heart of the action. He has responsibility in all these areas and has to deal with no less than 24 workforce representative organisations unions like Unison or Amicus and professional bodies such as the British Medical Association. He has politicians breathing down his neck, and tends to meet health minister John Hutton or secretary of state Alan Milburn at least once a week. It is a massive, high-stakes job.


Foster is not a career HR man. He seems to have fallen into his current role almost by accident. He started his career in the marketing department of Rowntree Mackintosh before moving into the property and building industries, and then into government lobbying. His involvement in the health service started when he joined the board of an NHS trust around 10 years ago. He took up his current post just over a year ago. He was not head-hunted the job was advertised in the press. It was ranked grade two, just behind the grade-one permanent secretaries who run departments. The posts advertised salary was 110,000 a year, far less than an equivalent job in the private sector, but Foster insists that there are many other compensations for working in the public sector.


By the time Foster joined the NHS it had already become political priority number one for the Blair government. The prime minister had already made his commitment to bring spending on the health service up to European levels in the wake of the bleak winter of 1999/2000, with endless negative stories about waiting lists and patients being left stranded on hospital trolleys.


Foster arrived after the announcement of the July 2000 plan which set out the way forward for the NHS. It said two things. There was to be an expansion of the workforce, while the organisation itself was to be reformed from top to bottom. It set out the need for 20,000 more nurses, 10,000 more doctors and 6,000 more therapists in just four years, says Foster. There was just no time to meet that requirement by training more people. So we looked for two ways forward: first, getting more people to return to the profession; and second, international recruitment.


He admits that this is just a shortish-term measure and that the long-term answer is getting greater numbers coming out of UK training. He says that we are trying to encourage school and university leavers to enter the NHS but adds, with a sharpish look at me, that general media coverage is not that helpful. He also points to the difficulty of recruiting at a time of relatively high employment.


If finding more NHS workers is difficult enough, it is simplicity itself compared to Fosters second challenge, which is to change the way the NHS actually functions. The year 2000 NHS plan called upon the service to be much more responsive to patients needs. Foster cites a study showing how patients admitted into hospital meet a bewildering number of different NHS workers he quotes the case of one patient interacting with 54 staff during a three-day stay. He wants to structure the system much more around the patient. The problem, Foster says, is that we are very much organised into occupational tribes at present. There are "four pillars" to "changing the way we work" the first is to be a "model employer"'. Top of the list here turns out to be finding NHS policies to address diversity.


I interrupt Foster at this point. Reading through the NHS website before the meeting, I had been struck by the amount of barely intelligible jargon on the subject of diversity. I put it to him that this was about being politically correct and nothing much to do with making the NHS function better. You say this is politically correct jargon, he replies, but we deal with a multi-ethnic workforce. We want to have a staff population that is representative of the community it serves. I suggest that the NHS is already far more representative in that respect than most private-sector businesses. He changes tack, suggesting that certain patients are sensitive to who looks after them. But shouldnt the job of the NHS be to provide an efficient service, and not concern itself overmuch with the quaint, in some cases racist, preferences of the patients? Perhaps it doesnt make it more efficient, Foster concedes. Perhaps it is about improving the quality of the service. This conversation serves as a reminder of the intractable difficulties of reforming the NHS, and that even now the quality of clinical service is subordinated to other priorities.


Fosters second pillar is turning the NHS into a model career. He wants what he calls a skills escalation strategy. He defines this as a career pathway to enable staff at the bottom of the organisation to have a realistic prospect of making it to the top. In theory you can start as a porter and end as a consultant'. There are already people who have started as porters and ended up as chief executives. He cites the case of David Johnson, who worked for nine months as a porter and is now the chief executive of one of the new strategic health authorities.


And at the same time as pushing staff up the escalator, we want to push tasks down, says Foster. He says that 20% of doctors time is taken up with administration and that paperwork could be taken off their hands and pushed down the organisational structure.


His third pillar is the improvement of staff morale. The NHS has been under a lot of strain through high demand and workload, increasing patient pressure and loss of deference to professional people. Staff morale is becoming a big problem. He highlights what he calls the psychological contract as a key mechanism for dealing with low morale. It talks of the give and get asset sheet: you get employability for life, good pension, good terms and conditions and you are well looked after by your employer.


The fourth pillar, says Foster, is about enhancing the capacity of the HR management function itself. Im arguing that HR delivers the wider objectives of the health service, not just a personnel function. Cynics might challenge the idea that good people management gets results. But studies show that its the biggest single predicter of the long-term success of an organisation.


But isnt the problem for the NHS that it is simply too big and cumbersome to be managed centrally as a single, highly centralised bureaucratic organisation? Foster disputes this. In the NHS there are 300 or so employing bodies at local level. Each of these has its own HR function. He insists that his job is to look after the functions which remain national and cites pay and training as the most important of these.


Surely, I suggest, pay is precisely an area where a single national standard creates all sorts of imbalances at a local level. We still have to operate within a framework of equal pay for equal work, he says, but readily acknowledges that the labour market is radically different according to which parts of the country you are in. He acknowledges that, Support workers in some areas get 5 an hour while support workers at, say, Gatwick get 8.


The NHS is looking for a variety of ways round that problem, he claims. We are working through a series of reforms that will allow local employers greater flexibility on local pay. He talks of a new system that gives local employers freedom to meet the local labour market, to design the jobs and to pay for anti-social working hours this last example is much more likely to apply in central London where it is so much more demanding and arduous to get to work.


He says that working within the heavily unionised NHS is something that he welcomes. Some 60% of NHS staff are in unions, he asserts. Part of being a model employer is taking advantage of the fact that they are there. He cites the Royal College of Nursing as a body that is extremely enlightened and keen to support change. Foster declines the opportunity to name the organisations which are less co-operative but acknowledges the historically adversarial environment in the public sector created by the annual pay round. The system revolves around giving evidence to pay bodies and that forces you into an adversarial position. But he insists that in the end the unions would always agree that the priority is patients needs.


He admits theres lot to learn from the private sector, and says he admires the way that the private sector operates succession planning for management, improves its management techniques and harnesses IT skills. But he denies feeling constrained by the bureaucracy and political meddling that goes with the public sector. There are different pressures, he says. People often complain about the complexities of politics but in the private sector there are the complexities of having to deal with shareholders.


He acknowledges the merits of Private Finance Initiative schemes in the NHS where private companies take over the running of, say, the catering and cleaning services, and staff are employed by the company. But he says staff have been unhappy about being moved across to the private sector. That is why we are using an employment model at four sites where staff dont move out but managers come in. At present this is being done on an experimental basis but its likely to be expanded if successful.


He robustly defends the management of the NHS men and women who have traditionally been attacked and scorned by politicians. If anything the NHS hasnt got enough management, declares Foster. The management is extremely high-quality but the amount that can be spent on it is subject to very severe constraints. In 1997 Labour promised to cut 1 billion from the NHS in costs and did so. We havent got enough managers. I would like to see an increased investment in managers and in HR.


Those are bold and unfashionable words. Foster is a man with a formidable task ahead of him. He has to operate within the framework of a top-heavy public-sector organisation. He does not exude dynamism but other qualities may be more important in this most complex of jobs. He will deserve a peerage, and the gratitude of all of us, if he gets this job right.


Peter Oborne is political columnist on The Spectator magazine