The MT Interview: NHS CEO David Nicholson

NHS boss David Nicholson seems unfazed by the role's vast responsibilities - and its political perils.

by Matthew Gwyther
Last Updated: 31 Aug 2010

So here we are in the 60th anniversary year of the National Health Service. I'm standing with its chief executive on the helipad atop the new £334m, PFI-funded Royal Derby Hospital and wondering at all that is best about the service in 2009. One can almost hear the words of Nye Bevan from In Place of Fear wafting across on the wind from the Peak District: 'Society becomes more wholesome, more serene, and spiritually healthier, if it knows that its citizens have at the back of their consciousness the knowledge that not only themselves, but all their fellows, have access, when ill, to the best that medical skill can provide.'

David Nicholson, the NHS's chief executive, is on a flying visit from Whitehall - not in a helicopter but in his Toyota Prius - and he's listening carefully as the freshly buffed and groomed senior management and staff whisk him around, showing him their dozens of new wards, the 35 operating theatres, two MRI and two CT scanners, their histopathology labs, their admirably low MRSA infection rates ...

As we descend from the rain-spattered helideck, one of the Royal Derby bosses is bending Nicholson's ear with a yarn about what happened when they tested the foam-based fire extinguishing system in case the chopper misjudges a landing or take-off. 'When they flushed all the foam away, it went into the sewage system ... there was an elderly lady on the lavatory ... and she got foam all over her credentials!' It all sounds a bit Carry on Doctor, a million miles from all this efficient modernity, but Nicholson smiles bravely.

Next, it's the A&E department, which has just opened the night before. Here, we're in the hands of Susie Hewitt, the consultant in charge of Emergency Medicine, who couldn't be less like Kenneth Williams' Dr Tinkle character. She would make the hardest-nosed management consultant or reluctant tax-payer purr - it's all 'sweating assets ... making every inch work clinically'.

The whole department has been designed for maximum efficiency and to reduce the anxiety and frustration of delays. It even has a waiting area that's deliberately too small - 'I want to get rid of the word "wait" in emergency medicine,' she proclaims. Nicholson listens approvingly and asks some questions about 'GP front-ends'.

He cuts an unremarkable, vanity-free figure, listening rather than proclaiming. Were the attention not focused on him, he'd blend into the background perfectly. Short-sleeved shirt, tieless, one shoelace undone, he's probably carrying a couple of stone over his fighting weight, mainly round the midriff. This doubtless leads to no end of finger-wagging from the cardiologists he encounters all over the country. Nicholson's well-lived-in face - he attributes his 'uneven facial complexion' to teenage years in the rugby scrum - is a picture of approachability: kind, interested, but not necessarily a pushover.

MT couldn't get a word in edgeways during the Derby visit, so we'd been allocated a 40-minute interview slot on the back seat of the Prius as his driver sat-navs at speed towards the next official visit, at Rampton in Nottinghamshire. A secure hospital, Rampton houses individuals who are, in the old expression, criminally insane. Nicholson is off for an inspection of the likes of serial-killing nurse Beverley 'The Angel of Death' Allitt, currently serving 13 life sentences for the murder of four children.

Both Nicholson and his special assistant are frisson-filled at the prospect of some facetime with the Hannibal Lecters of our society. (MT, lacking the correct security clearance, will be left at the barbed wire.) The fact that Nicholson is ultimately responsible for the care of such individuals, as well as the recipients of appendectomies and moppers of the ward floors, just illustrates the extraordinary breadth of his brief.

So what about the NHS boss's job? It must be just about one of the toughest management gigs going, running an organisation - the largest employer in Europe with more than 1.3 million staff - about which everyone has an opinion because their contacts with it are so intimate and so important from cradle to the grave. And then there are your fickle political masters who hold the purse-strings; the agonies of cupboard skeletons such as the Mid-Staffordshire scandal where up to 1,200 patients may have died because of negligent levels of care. Not to mention the outbreaks of H1N1 flu that come from a Mexican leftfield and reduce the population to near panic as the media weighs in. Who would carry such burdens? Even the highest calibre of leader would be on a hiding to nothing.

When MT interviewed the previous incumbent of Nicholson's job, Nigel, now Lord, Crisp, in March 2003, Crisp told us his father had offered commiserations on his son's appointment, saying the only individual with a worse job in the UK was the chairman of Railtrack. (This was to prove ominous. Crisp, a thoroughly decent and intelligent man, came a terrible cropper and was despatched by his political masters after the NHS budget crisis of 2006, when suddenly the organisation found itself facing a £547m hole in its books.)

Nicholson won't have any of this. He's actually quite cross that anyone could think the £215,000-a-year position with a housing allowance of £37,000 plus generous pension is anything but the best job in the world. 'Do not forget, I started as a graduate trainee in the NHS and have worked for it for 30 years. This is the culmination of any ambition that anybody who loves the NHS can have. I am absolutely committed to a tax-funded system. I think it's the best healthcare system you can have. I do not think we have all the benefits out of it; there are enormous benefits still to be had. Plus, people who work in the NHS are highly committed and highly motivated, and it is an absolute privilege to do the job.'

The tale of his appointment is a telling one. After Crisp, there was a strong Blairite appetite for an outsider from the private sector to knock the NHS into shape: introduce some proper financial disciplines; refuse to be steamrollered by the BMA and other health unions that had taken the government for a ride by grabbing large wage increases and returning little or nothing in terms of increased productivity. The selection panel went to Tesco's Sir Terry Leahy - married to a doctor - who, unsurprisingly, declined the invitation. He didn't want his immaculate reputation trashed at the hands of a statist leviathan. Neither would the pay have been alluring.

Nicholson takes up the story. 'When they advertised the job, they had the idea that they wanted a big cheese from either the private sector or the American healthcare system. So they had a global search and I was the only NHS person shortlisted. The rest of the shortlist included two from the private sector in the US, one of whom flew in on a private jet, I might add.' When Gus O'Donnell phoned at 8am to tell Nicholson he'd got the job, the victor was so overwhelmed that he had to sit down.

On the evidence so far, it's hard to argue that they made the wrong decision. Quite apart from the fact that Nicholson is highly capable and has enjoyed a good tenure so far, there was an urgent necessity to get the staff onside under the leadership of someone who they could trust.

Nicholson is truly 'one of us' down to his marrow. He had begun his career straight from university working as a manager in mental health services, slowly but surely ascending the greasy pole. He was an early champion of new ways of doing things - as chief executive of Doncaster Royal Infirmary, he led one of the first waves of trusts to break out from the grip of Whitehall, under Margaret Thatcher's policy of reform. Selling staff a hard-nosed American bean-counter who was all for taking on a highly unionised workforce could have been a disaster for the organisation.

And why on earth would we want a US health exec anyway? If you were starting a national healthcare system from scratch in 2009, the US model is the last place you'd look. As costs rocket, Americans get fatter and sicker, with many enduring awful suffering due to lack of insurance cover.

McKinsey has calculated that the US spends $650bn more on healthcare than might be expected by comparable members of the OECD - and yet the US lags behind other OECD members on key indicators such as life expectancy and infant mortality. The Obama administration says there has to be a better way, one that doesn't involve spending such a vast proportion of a nation's GDP so inefficiently. But change will not be easy.

So once Nicholson had the job, wasn't it immediately apparent that one of his major problems would be that he isn't actually the boss? The buck may stop with him, but he has a political master, the secretary of state for health. At the time of our interview, it was Alan Johnson but now - with the fast-moving politics of the Brown regime - it's Andy Burnham.

So here's a revolutionary idea. Why not do a Bank of England on the NHS? Free it up from political interference by allowing decision-making to be carried out by those in the know - doctors and managers - rather than vote-seeking politicians. Nicholson looks ever so slightly alarmed by the question - it would be career suicide to concur - but plays a straight bat.

'I do not think you can be without political masters,' he says. 'While you have a tax-funded system, it seems to me unreasonable to expect politicians to go through the pain of levying the taxes and getting the money in to then say: "Here is £110bn, do your best with it." It's just not a sensible place to be, so there will always be an interface with politicians. Quite rightly, politicians should have a view about priorities and direction and stuff like that and we just need to create arrangements where that can be done.'

Although there must be tensions with his political masters, he says he has had excellent working relationships with Johnson and his predecessor Patricia Hewitt. Indeed, there's no reason why things should have been awkward while NHS cash was flowing in by the bucketload, with real increases of 11% a year (more of which later.) It's worth remembering that health secretary is a thankless cabinet position. (John Reid's utterance when told of his appointment in 2003 was: 'Oh, fuck! Not Health!')

However, it's now clear that after good years of bumper budget increases, the general economic malaise will mean tougher times ahead. The mood will change by 2011, when a shortfall is expected. 'Seven years of famine' have been predicted by the NHS confederation at a time when the long-term problems of an ageing population and the huge cost of new treatments are expected to get far worse.

Nicholson knows things will get rough. 'We have had massive investment in the NHS over the last 10 years or so. We have increased the size of it by one third, which is no mean feat in itself. Over the next two years, we know we are going to increase the size of the NHS budget by about 11%, which is remarkable. The Government has given us that vote of confidence.

'But I think we are in for a period of at least three years and probably more of the NHS budget being frozen. If we are going to achieve real-term growth it will be small, and I guess the Government will want more for it when we do it. Therefore, we are going to have to deliver unprecedented levels of productivity in the NHS, there is no doubt in my mind.'

But hasn't productivity been the problem up until now? Critics say a lot of the increased money has been squandered on wages. GPs, for example, pulled the ultimate fast one when they ditched their 24-hour commitment and stopped doing night calls and yet were rewarded with more than £100,000 a year on average. Didn't Ken Clarke have a point when he called the BMA one of the most unscrupulous organisations he'd ever dealt with?

Nicholson smiles. 'I do quite a lot of public accounts committees, and one of the more entertaining was on the GP contract. It's always difficult for a permanent secretary, because you have to go there and defend the decisions of your predecessors, and they gave me a very difficult time about it. But there are some real benefits that came out of the GP contract. We can demonstrate how we have significantly improved the quality of service to our patients. When you look at some of the things around coronary heart disease, the preventative work that GPs have built into the contract has had a fantastic effect on people's health. And we now have 74% of GP practices opening in the evenings or weekends.

'There is no doubt the BMA and Unison are tough negotiators, but we need to make sure as we go forward in this that we achieve the best benefit for patients.'

But surely we've lost one of the enviable glories of the NHS: that you used to be able to call your GP in the middle of the night and get your own doctor to visit your sick baby or elderly relative? 'Yes, but it was unsustainable. People forget that at the time of the GP contract discussions we were losing GPs. There were areas in the country where you literally could not recruit a GP. The medical profession was increasingly becoming feminised, but women were not prepared to take those sorts of jobs, so we had to change in order to sustain the service.'

What's certain is that the climate has changed for the NHS. The economic meltdown means there's pain coming down the line. So, as an ex-communist - he was a hardline 'Tankie' from 1977 to 1983 (supporting Russian tanks crushing uprisings) and not a Gucci-suited Euro-communist - was he surprised at the way the global capitalist financial system had imploded?

'I think we're all surprised at the rapidity at which the financial system collapsed. It only reinforces the belief for me that a tax-based system free at the point of use is the best way to protect and support our patients. Imagine the effect on a system funded through insurance or owned by the banks when going through this ... But, no, I don't think the collapse of capitalism is inevitable.'

He's not going to rage on the record about bankers' greed and the bonus culture. But didn't he find it galling that after all the stick his public sector had taken over the years from the Masters of the Universe, it was the State they turned to when they needed a sub to bail them out?

'I think what I find galling is that over the years before the financial crisis, I have been lectured by bankers about how poor we are in the public sector at management. I don't get any of that any more. I always found that particularly galling, because I think the quality of management in the public sector is first-class.'

Management in the public sector certainly has different objectives, but it hasn't always been of the highest quality, has it? It wasn't great in Mid Staffs and plenty of places elsewhere. If it really is that good, what is the NHS doing spending £350m annually on outside consultancy? (£273m of this was not even related to patient care, according to the Royal College of Nursing).

'It has got better,' he insists. 'First of all, it had to get better, because the issues that we tackle are more complex, and if we really do focus our attention on improving quality and reducing costs, that is a tough thing to do - but I think it has got significantly better over the last few years.'

Nicholson knows the NHS has been too inward-looking, and he now has a major push on innovation. He wants more managers brought into middle management from the private sector and more clinicians in senior management positions. 'Many doctors feel that management is "the dark side" in some way,' he says. 'And you can perfectly understand some of that, based on the evidence they show. Thus there is a cultural issue about making it attractive, and you can see lots of clinicians now are interested in it.'

And clinicians have been irked by the tyranny of targets. The Mid Staffs debacle was blamed on an obsession with targets. 'Many clinicians felt in the past that delivering Government targets was not what they wanted to do. They had a quality agenda. I think one of the great things about the way we have redefined the agenda of the NHS is that they can see that being a leader, a chief executive in the NHS, is about improving quality for patients.'

One area where quality has apparently been dismal is in the purchase of IT services, and especially the National Programme for IT, which looks like the mother of all RTAs. Nicholson won't have this. 'Ours is one of the most crawled-over of audited programmes in the history of IT. We have saved the exchequer £4bn!'

His is a punishing schedule. He spends Monday to Wednesday in Whitehall, Thursday on the road doing 50 visits a year, and then Friday at the NHS offices in Leeds. His family, who live in Harrogate, must see virtually nothing of him (his children are now in their twenties).

At weekends, he spends what free time he has in the frequently unrewarding task of following Nottingham Forest football club, both at home and away. It has been a long time since it won the European Cup twice under Brian Clough, in 1979 and '80. Nottingham is where Nicholson grew up and watched his father, a plasterer, become incapacitated by emphysema and confined to a wheelchair. 'One year, he was admitted to hospital 14 times,' he has said in another interview. 'Then they decided to provide him with an oxygen cylinder and the phone number of a nurse who could come round if there was a problem. In his last two years, he was hardly admitted to hospital at all.' Nicholson Senior's ashes were scattered on the pitch at Forest.

He seems a contented man, but doesn't think he'll go much beyond his contractual five years. 'I love it. It's what gets me up. Very few people ever get the chance to do this job. I can bring people together, talk to prime ministers, and talk to people on the ward.'

And that's our lot. The Prius pulls up and he's out in a flash, off into the arms of the Rampton welcoming committee.


FOUR CHALLENGES FACING NICHOLSON

1. To maintain a firm but enabling management grip on such an unwieldy organisation

2. To prepare for famine after foison - harder times when it comes to NHS budgets

3. To prepare for a possible change of government and what that might involve

4. To be always ready for the Daily Mail's next bad NHS headline

 

NICHOLSON IN A MINUTE

1955: Born in Nottingham. Educated at Forest Fields School, Nottingham, and Bristol University

1977: Joins NHS as management trainee.

1977-87: Various jobs managing mental health services, mainly in Yorkshire

1987-96: Jobs in acute medicine, including CEO of Doncaster Royal Infirmary

1996-2006: Senior roles in regional and strategic health management, first in North of England then as CEO for London

2006: Appointed chief executive of the NHS.

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