4 min read

Editor’s blog Monday 27 September 2010: DH withholds modelling of consequences if plan to abolish FTs' borrowing limits proceeds

- Department of Health refuses to release document on potential consequences of Government proposals to give NHS foundation trusts unrestricted freedom to borrow
- Official reply cites concerns about what “both NHS service providers and financial institutions” might do with this information – despite a public consultation about this proposed change being under way

The Department of Health today refused to release a document outlining the potential consequences of abolishing borrowing limits on NHS foundation trusts (FTs).

FTs are better-performing semi-autonomous provider organisations, which enjoy certain financial freedoms and are not directly accountable to the Health Secretary. Currently, their freedom to borrow is legally limited.

Health Secretary Andrew Lansley plans for all NHS providers to become FTs by 2014. He is currently in public consultation on plans that could abolish these legal limits on FTs’ borrowing. This would explicitly allow FT hospitals to go bankrupt and be taken over by their lenders - which would be privatisation of what are currently public assets.

Health Policy Insight revealed in July that Monitor, the independent regulator of FTs, had done no modelling of potential consequences of ablolishing FT borrowing limits. We therefore asked the Department of Health (DH) to reveal any modelling it had done to inform the public consultation.

The DH has now twice refused to release this information, despite admitting that its original reasoning for withholding it had been flawed.

The Runsfeld Rule
Former US defence secretary Donald Rumsfeld's best-known quote, by a country mile, is "there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - the ones we don't know we don't know".

As Freduian slips of political rhetoric go, it is hard to surpass.

It also appears to be the guiding principle governing the DH's response to my FOI request about the modelling of the consequences of abolishing NHS foundation trusts' prudential borrowing limit, which I wrote about in July and August.

For the time-poor, basically they have a document outlining a senior civil servant's scenario of the consequences, which they will not release to inform the public consultation on financial freedoms for NHS foundation trusts because they are afraid of what current FTs and the financial sector might do as a result.

No, it doesn;t sound as if any of the potential outcomes they're expecting are very good, does it?

Their reply reads as follows.
Internal Review
"While the Department responded to this request within the statutory time limit, and did confirm, in compliance with S1 of the FOIA, that it held information falling within the terms of the request, it would have been good practice, given the rather open phrasing of the request, to have summarised what that information comprised.

"We have established that the information held by DH at the time of the original request, which could reasonably be classified as falling within its terms, was limited. It comprised part of a Ministerial submission from a senior civil servant on facilitating the financial independence of FTs. It cannot be described as a detailed piece of analysis whose existence the request rather appears to presuppose, and is arguably about the consequences of the decision rather than the decision itself, but officials concluded that it was better to consider this material for release or withholding, rather than regard it as outwith the terms of the request. Nevertheless, it was concluded that it should be withheld on the grounds stated in the original response.

Qualified exemption
"Turning to the issue of exemption, we have concluded that the material in question did indeed relate, and still relates, to the formulation or development of government policy, as specified in S35(1)(a) of the FOIA, and that this information was therefore justifiably subjected to an evaluation of the public interest in releasing the information against that in withholding it.

"However, we also concluded that your contention that the evaluation of the public interest factors supporting withholding the information to protect the deliberative process of policy development failed to ‘demonstrate that such concerns do, may or will arise in this instance’ was an accurate appraisal. We conclude that this part of the evaluation in our response did not demonstrate convincingly that the public interest factors in favour of withholding the information outweighed those in releasing it. In this respect, your complaint should clearly be upheld.

"However, and more importantly, we also take into account the fact that the request was made at a time when the development of the policy of facilitating the financial independence of FTs was still under development, and this situation still prevails. Given the contents of the briefing, and the nature of the scenarios outlined to Ministers, there is a risk, if this information were to be placed in the public domain at this stage, that interested parties might use that information to pre-empt a decision, and act on the basis of outline models which have not yet been taken up, and may still not be taken up, to their severe detriment. Those interested parties would be very likely to include both NHS service providers and financial institutions. The public interest in preventing serious harm occurring to either of these groups is self evident. While it was not made specific and clear in the original response – and it is our view that it arguably should have been – this risk is real, and a likely enough consequence that the public interest in its prevention outweighs very significantly the public interest in openness which we nevertheless acknowledge, which might militate in favour of the release of this particular information at the present time.

"This internal review is now complete, and its findings have been communicated to policy officials and colleagues in the FOI team, in order to inform and encourage good practice".