Confirmed minutes of 13^th October 2005

PRESCRIPTION PRICING AUTHORITY

Minutes of the public meeting held on Thursday 13 October 2005 in the Board Room, Bridge House, Newcastle upon Tyne.

PRESENT

1 CHAIRMAN'S INTRODUCTIONS

The Chairman indicated that members of the public were welcome and outlined the format of the meeting. The PPA is required to hold a public meeting each year to present its Annual Report by the end of October. The Annual Report would be presented as part of the normal monthly agenda and members of the public were welcome to stay and observe the remainder of the meeting.

2 ANNUAL STAKEHOLDER REVIEW 2004-2005

Mr King presented the Annual Report 2004/05 and the Stakeholder Review. He also provided an outline of the key business activities during 2004-2005 in respect of:

• pricing prescriptions and remuneration to contractors
• prescribing and dispensing information services
• the Drug Tariff
• provision of analysis and advice
• patient services and help with health costs
• a range of managed and hosted services

In particular Mr King referred to our contribution to national NHS developments by providing services, advice and support. He also highlighted internal developments and the volume growth in the services provided, for example:

• nearly 6 million items processed relating to the NHS Low Income Scheme claims, prescription pre-payment certificates, tax credit, medical and maternity exemption cards.
• nearly 780 million prescription items processed that have been dispensed by pharmacists, appliance contractors, dispensing doctors and personally administered with a value in excess of £7 billion.

Information was provided on a net operating cost of £72.7 million that had been reduced as a result of major funding changes and targets set to reduce operating unit costs across the Arm's Length Bodies sector.

Mr King concluded by outlining the timescale and targets set by the Arm's Length Bodies review established by the Department of Health. The PPA was due to merge with other organisations to form the NHS Business Services Authority from 1 April 2006.

The Chairman welcomed the summary presented by Mr King which was a good reminder of all the achievements and successes throughout the year often under stringent timeframes and difficult circumstances. In particular she was pleased to see the publication of the Stakeholder Review 2004-05 that provided data on prescribing and dispensing and would be a useful tool for stakeholders to make comparisons on previous reports and noted that it would be available in electronic format for access from the internet. Members echoed the comments of the Chairman.

3 APOLOGIES FOR ABSENCE

There were no apologies for absence.

Members were informed that Mr Murphy had formally resigned as non-executive member of the PPA. The Chairman advised that she had written to Mr Murphy thanking him for his contribution to the PPA and wishing him well for future.

4 MINUTES OF THE PREVIOUS MEETING HELD ON 8th SEPTEMBER 2005

The minutes of the previous meeting held on 8 September 2005 were received and confirmed as a correct record.

5 MATTERS ARISING FROM PREVIOUS MEETING

There were no matters arising from the previous meeting.

6 KEY PERFORMANCE INDICATORS

Mr King presented the performance statistics up to the end of September 2005 that showed all targets had been achieved.

7 OPERATIONS REPORT

Mr McDonald reported that the organisation was experiencing higher than normal rates of turnover for prescription processing staff on fixed term contracts. Latest information showed that the turnover for fixed term contract staff was 50% compared to a normal rate of 30%. Although not certain, it was understood that this higher rate was due to the uncertainty surrounding CIP. Another issue affecting performance has arisen due to changes to overtime arrangements under the terms of the Agenda for Change agreement. There now appeared to be a lack of willingness from staff to work at previous levels of overtime due to the revised terms. The impact would be a delay in achieving the prescription processing completion date which could result in completion a half a day behind target. Following discussions Mr McDonald confirmed that the only option was to recruit additional staff and arrangements had been put in place for the recruitment to take place this month. The Chairman expressed concern that there was no flexibility within the terms of the Agenda for Change agreement even though there was an evident business need. Mr McDonald confirmed that if the situation continued there would be an ongoing impact on performance that could translate into a 2% performance drop each month. Managers were aware within Divisions of the impact of the turnover. The Chairman requested an update on the position at the next meeting.

The European Health Insurance Card system had been in operation for one month and the volume of applications was more than double what had been anticipated ie 624,237 applications compared to the planned 266,435. Internet applications were 44% of the overall total and the remainder was 30% received by post and 26% received via the call centre facility. The original predictions by the DH on the types of applications had been 20% via the internet, 43% using the call centre and 37% via post.

In response to an enquiry from Dr Stockwell regarding the special arrangements that had been put in place to deal with the EHIC volumes, Mr McDonald advised that there was a potential impact on one of the Low Income Scheme targets for this month only as arrangements had now been put in place to deal with volume of applications.

8 FREEDOM OF INFORMATION (FOI)

Mr Ball presented a report on the first nine months of operation of the FOI Act and the requests received to date.

Clarification has been received from the Information Commissioner that we do not need to manipulate data in order to comply with requests. However, if the information is available within systems or on paper we must comply with the request.

The PPA is becoming known as the source of information especially in relation to prescribing and dispensing information. Primary Care Trusts are unable to access PPA systems in order to comply with requests and therefore requestors are approaching the PPA direct.

All information released by the PPA to satisfy a FOI request has a "use warning" to try and protect the Authority from the information being used in a manner which does not reflect the business purpose for which it was collected.

The DH is proactively monitoring compliance with the Act by NHS bodies and we are required to submit a quarterly return which summarises the volume, type and outcomes of requests. For the first six months the PPA received a total of 49 requests.

In response to an enquiry Mr Ball advised that there was no specific comparison on the volumes received between organisations. However, there was less than the expected number of requests generated internally.

Members noted the contents of the report.

9 EXTERNAL AUDIT MANAGEMENT LETTER

Mr Smith advised that the issues within the Management Letter had been discussed at previous Audit Committee meetings and agreement reached with the Auditors on the outcomes. The significant issue regarding Prescription Pre-Payment Certificates had been discussed at length and a compromise reached on the accounting practice to be used in these circumstances.

The Chairman was pleased with the Management Letter.

Dr Stockwell, as Chairman of the Audit Committee, commented that the process for dealing with the issues that were identified in the Letter and the formality of signing off the annual accounts had been conducted in an exemplary manner. In addition Members should be satisfied that the issues raised in the Letter had been technical accounting issues rather than any fundamental control issues.

10 NOTIFICATION OF THE ESTABLISHMENT OF THE NHS BUSINESS SERVICES AUTHORITY (NHSBSA)

Mr Smith presented the governance documents relating to the establishment of the NHSBSA with effective from 1 October 2005.

These consisted of:

• The Notification to and Co-operation with the NHS Business Services Authority Directions 2005.
• The NHS Business Services Authority (Establishment and Constitution) Order 2005 (Statutory Instrument 2005 No 2414)
• The NHS Business Services Authority Regulations 2005 (Statutory Instrument 2005 No 2415)

The production of these documents is a standard procedure for organisations that are due to merge. The documents state that any proposals to change staffing establishments or funding arrangements should be notified to the NHSBSA.

Christine Outram, Director of Organisation Review, at the DH had also issued a letter to all Arm's Length Bodies notifying them of revised delegated capital expenditure limits. A common level of spending across all ALBs of £500,000 for IT and other cases and £1 million for accommodation has been established. Any expenditure that exceeds those limits would be subject to business case approval through relevant sponsor branches and the FID-Capital Investment Branch at the DH.

Members recognised the changes outlined above and noted that those arrangements are not dissimilar to the culture currently adopted around the table where any decisions made had also included an assessment of the impact on the NHSBSA.

Mr Siswick advised that he was preparing HR guidance notes for use by the constituent organisations of the NHSBSA in order to ensure that they comply with the Direction relating to staff establishments. The main emphasis is on the need for communication across all organisations.

11 NORTH WEST REGIONAL OFFICE

Mr Smith reminded Members that when approval was received for the CIP Business Case there was a caveat that when additional information was available regarding the location of the new offices supplemental business cases were prepared for each location to ensure that they were in line with the original business case.

The business case for the North West regional office has been submitted to the DH and approval has been received from the Capital Investment Branch at the DH. Mr Smith advised that a similar exercise will need to be undertaken for the Central regional office in the near future.

The Chairman approved the acquisition of the new North West region premises at Bolton at an annual cost £408,990. In addition, due to the need to carryout out works to ensure that the premises are available for occupation at the required dates, Members granted the Chairman authority to approve the contract award for fit out works at a cost of no more than £500,000 + VAT.

Mr McDonald advised Members that an announcement to staff on the location of the North West regional office would be made as part of overall CIP announcement to staff in early November.

12 REGISTER OF MEMBERS' INTERESTS

The Register of Interests was noted.

13 FUTURE BUSINESS OF THE AUTHORITY

Members noted the future business.

14 DATE OF NEXT/FUTURE MEETINGS OF THE AUTHORITY

The next meeting of the Authority would take place on Thursday 24 November 2005 at 9.30am in the Boardroom, Bridge House, 152 Pilgrim Street, Newcastle upon Tyne. During the meeting a session would be held to review the PPA contribution to the NHSBSA Business Plan 2006/07.

Future meetings would be held as follows:

15 ANY OTHER BUSINESS

The Chairman formally closed the public session of the meeting.