Governing the English NHS: Exploring the Role and Contribution of the Primary Care Trust Chair and Non-Executive Director Joy Tweed, M.A. A thesis submitted in fulfilment of the requirements for the award of Doctor of Philosophy of Birkbeck College, University of London 2017 CERTIFICATE OF ORIGINALITY This is to certify that I am responsible for the work submitted in this thesis, that the original work is my own, and that neither the thesis, nor the original work contained therein, has been submitted to this or any other institution for a degree. Joy Tweed July 2017 2 Abstract The area of research interest for this study was the governance role of non- executive directors (NEDs) and Chairs on NHS Primary Care Trust (PCT) boards across England. This interest arose from the experience of the author, herself a PCT NED, who was aware of some of the tensions of the role that resulted from a model of corporate governance and accountability imported from the private sector to the public sector. The NED role was more complex within PCTs as there were additional stakeholder expectations of providing public accountability. The changing policy landscape also saw NEDs responding to different Government priorities and developing the role in quite different ways to their counterparts in the private sector. Newman’s (2001) model of governance is a dynamic one that highlights the tensions caused by the Government’s use of different types of governance mechanisms, seeking to achieve sometimes-conflicting goals. In this thesis the model is developed to consider how these tensions led to a differentiation of roles in practice for NEDs. The empirical analysis is based on interviews with 52 PCT NEDs and Chairs across England between October 2011 and April 2012. The dominant emphasis for some respondents was the efficiency of the organisation, reflecting principles of new public management and providing accountability to the taxpaying public. Other respondents saw their accountability as being to the local community and patients, and their role to defend these interests. They saw themselves as having a role both within and outside of the organisation, oriented towards a decentralised model of governance and working collaboratively with other stakeholders to improve health outcomes. This study identified that the NED role as a defender of public interests provided a motivation to act, was a source of power and was one influence on the board as it tried to act within the tensions of operating as a local organisation, responsive to local need in addition to meeting nationally-determined targets. Previous studies found the NHS NED role to be marginalised, but this study found PCT NEDs and Chairs able to exercise power to achieve results in line 3 with their interests, although their power was often constrained by the power of other actors, notably the Strategic Health Authorities acting on behalf of the Department of Health. Even though PCTs have been abolished, the corporate governance model of a board and NEDs remains in hospital trusts and other parts of the public sector to the present day. The tensions between national and local accountability remain. This thesis provides support for a differentiation of NED roles, recognising the limitations of the new public management approach and a model of corporate governance from the private sector. While those NEDs with business expertise may be able to contribute to organisational efficiency, there is also a need for NEDs with a public service interest and the skills to influence and work collaboratively with stakeholders to ensure health services best meet the needs of communities. 4 Acknowledgements I would like to thank my supervisor, Dr Anita Walsh, for coming on board late in this PhD journey and taking me through to its completion. I am very grateful for her wisdom, insight and support. I am also very grateful to family, friends and colleagues for their support. I would like in particular to thank my wonderful husband, James, and children, Michael and Fiona, for their constant love and encouragement. My parents, Jean and Mike, have also provided a great deal of support and I would like to thank them, and my friend Carly, for encouraging me to continue when I was so very tempted to give up. I am also grateful for the support of a great many colleagues, in particular Dr Patricia Maitland and Dr Graham Towl, who gave generously of their time to provide valuable advice. Finally I would like to thank two people who set me on the road to this PhD, Dr Geoff Wykurz, the course leader for my MA, and Kay Sonneborn, Chair of the PCT to which I was first appointed as a non-executive director. 5 Table of Contents Abstract ............................................................................................................. 3 Acknowledgements ............................................................................................ 5 Acronyms and Glossary ................................................................................... 13 Chapter One: Overview ................................................................................... 14 1.1 Primary Care Trusts ................................................................................... 16 The desire to modernise ........................................................................... 16 Redistribution of power ............................................................................. 16 Accountability and performance management .......................................... 17 Section summary ...................................................................................... 19 1.2 Governance arrangements within PCTs .................................................... 19 Influence of the Higgs report (2003) on NHS boards ................................ 22 The PCT board and subcommittees ......................................................... 23 The role of the PCT board ............................................................................ 24 Section summary ...................................................................................... 26 1.3 Changing Government expectations: 2005 ................................................ 26 Section summary ...................................................................................... 30 1.4 Governance changes following announcement of abolition of PCTs .......... 31 Section summary ...................................................................................... 33 1.5 Overview of thesis ..................................................................................... 34 Chapter Two: Literature review ........................................................................ 38 2.1 Governance and the public sector: changing influences ............................ 39 Policies of New Labour................................................................................. 40 Post-NPM approaches and public governance ............................................. 45 Section summary ...................................................................................... 47 2.2 Corporate governance within the private sector ......................................... 48 Theoretical approaches to the role of the NED ............................................. 49 The NED as a contributor to board roles in control and direction .................. 53 Conformance vs performance roles? ........................................................ 55 Board behaviour and processes ................................................................... 57 Examining power ...................................................................................... 58 Using power and influence........................................................................ 61 Effort norms .............................................................................................. 63 The role of the Chair .................................................................................... 64 Section summary ......................................................................................... 66 The influence of identity on governance roles .............................................. 67 A social identity approach ......................................................................... 68 6 2.3 Corporate governance in the public sector ................................................. 70 Corporate governance in the NHS ............................................................... 72 NPM or post-NPM influences .................................................................... 73 NHS Boards: Exploring the practice of corporate governance .................. 75 A behavioural approach ............................................................................ 78 The NHS NED and Chair role....................................................................... 79 The influence of identity on the NED role .................................................. 80 The role of the NHS Chair......................................................................... 81 Model of unitary board questioned ............................................................ 82 Summary...................................................................................................... 83 Research questions .................................................................................. 85 Conceptual framework .............................................................................. 85 Chapter Three: Methodology