Theft of the NHS

Once we had only "24 hours to save the NHS"

Around 24 hours ago, in its dying days, the present New Labour government, which was first elected on this claim, has used its parliamentary majority to steal the NHS from the people. This has been achieved most subtly under the guise of protecting it.

The NHS is owned by us all. It is not owned by the Crown or its Ministers representing the government in power at any time, nor by those appointed, recruited or contracted to work for the NHS. We are represented by our Parliament in the House of Commons, and we look to this body to protect our NHS. Its power to do so is most effectively exercised through its ability to pass legislation.

Professor (shortly to be "semi-retired Lord") Darzi reported for the government in 2008 that there would be a NHS Constitution, to "Secure the NHS for the future". He stated that "to qualify as a Constitution the document needed to be short and enduring", and "to be meaningful it must have bite, with means for enforcement and redress, not just warm words or aspirations".

In his Foreword to the Darzi Report, Alan Johnson, then Secretary of State for Health, said with reference to the Constitution - "The NHS is as much a social movement as a health service. That is why it is so vital to secure its founding principles and set out the rights and responsibilities of patients, public and staff."

Last night, the Health Bill, with provisions to give legal effect to the NHS Constitution came before the House of Commons for the final stages of deliberation. An amendment was tabled to place the core principles of the NHS within the Bill. This was necessary as there was no other provision to give legal force to the terms of the Constitution, only recognition of its existence.

The proposed amendment was therefore essential to provide a legal safeguard for the principles of the NHS. The so-called Constitution document that has emerged cannot be embedded in legislation as is indeed lengthy, in some parts highly detailed for the current time and openly full of aspirations. By Darzi's own definition it fails to qualify as a Constitution, in any meaningful sense of the word.

The very brief discussion of this amendment (which had previously been considered and rejected in Committee) was not around the wording of the principles. It was opposed outright by the government Minister, who stated "We need to ensure that the NHS is the area where this decision-making takes place, not the courts." [Hansard 12 Oct 2009 - Col 114]

In his subsequent paragraph Mike O'Brien referred to parliament "abrogating responsibility"; however he was, most disturbingly, using this term to describe legislating so as to empower the judiciary, rather than leaving power in the hands of the executive. Parliament's responsibility for the core principles of our NHS must be placed in legislation for the courts to interpret and enforce, not abrogated to those who happen to hold senior positions within the Department of Health and the NHS.

On a division, the New Labour majority in parliament was used to defeat this amendment, and on the subsequent Third Reading of the Bill to confirm responsibility for the principles of the NHS to rest with the management of the NHS itself. This is ultimately officials and Ministers in the Department of Health, although much of the responsibility rests with personnel appointed to local Trusts.



This is highly relevant to the specific issue on which I am campaigning, as the underlying issue is the integrity of the NHS as a publicly owned institution, accountable to the people, not as a set of "consumer-focused" enterprises with a duty only to the customers they can attract in a marketplace.

Use of revenue sharing telephone numbers as a means of subsidising the cost of providing NHS services at the expense of patients is a fundamental breach of the principle of "free at the point of need". If consumers can be persuaded to pay for improved NHS services when exercising "choice", then there could be seen to be no problem. That is NOT the NHS that I seek to defend.

Use of revenue sharing telephone numbers may be only a modest example of "services being jointly funded through patients' contributions" (without parliamentary approval), as it was described by Mike O'Brien in Committee (Hansard: Health Bill [Lords], Public Bill Committee, Second Sitting, 16 June 2009 - Column 53); but my concerns extend to the others that exist now and could arise in future.


A ban on "The use of phone numbers that charge the public or patients a premium rate to contact the NHS" has been announced on the basis that revenue sharing 084 numbers may continue to be used "providing patients are not charged more than a local rate number". There is and can be no situation in which this could be assured.

Telephone tariffs cannot be set by ""changes to the GP contract (in consultation with the British Medical Association's GP Committee), and the issuing of Directions to NHS PCTs and Trusts". This is precisely what is suggested in the announcement.

A ban on the use of revenue sharing telephone numbers by all NHS providers is necessary to protect the principle of "free at the point of need". This ill-considered ineffective attempt has disregarded wise and helpful advice presented in a consultation in favour of partial and false representations by interested parties. It is not only thereby a bad decision, but it also represents licence for continuing breaches of the principles of the NHS. This is exactly how it has been interpreted by the parties whose interests would have been threatened by a ban. (see NHS FREE TO CHOOSE 084 NUMBERS FOR LOCAL PATIENTS)

This example demonstrates what can happen when application of the principles of the NHS is left solely in the hands of those with Political and other interests, without protection from Parliament through legislation.

It is simply not safe to leave our NHS in the hands of a Minister who defines its principles in the following terms (Hansard: Health Bill [Lords], Public Bill Committee, First Sitting, 16 June 2009 - Column 12):
"The core principle of the NHS—that it is funded by the taxpayer to ensure that the provision of healthcare is available when it is needed, sometimes with a charge, but more often without - must remain intact. We have not announced anything that would undermine that principle."

I repeat: "

the core principle of the NHS -

sometimes with a charge, but more often without

" - had I not heard this nonsense in person, I would have doubted the Hansard writers.

This unworthy rubbish is completely unacceptable for our beloved NHS - and the NHS is now denied legal protection against it. It is intolerable for parliament to have abrogated its responsibility by placing the principles of the NHS in the care of such people.

Further statement by the Health Minister

Seven days ago I presented 5 questions to Mike O'Brien, Minister of State (Health Services) regarding the announcement "NHS TO BAN PREMIUM RATE CHARGES".

I stated that in the absence of the necessary clarification and explanation, I would draw the conclusions stated below. I am still awaiting a reply and record these conclusions for now. I will adjust or withdraw them as necessary when a reply is received.

1. The announcement is rendered meaningless by the indication that use of revenue sharing 084 telephone numbers by local GPs and Hospitals will not be banned. Many of those who call them incur a charge greater than that of calling a normal landline number. Changes to the GMS contract and directions to NHS PCTs and Trusts cannot affect these premium charges. Use of 084 numbers would have to be banned in effect, regardless of the intention, for the announcement to have any meaning. The BMA's welcome of the announcement as indicating "Changes to charges for 084 numbers" has not been challenged or disputed, despite the fact that there is no basis for such an assumption in the DH statement.

2. The announcement that "The use of phone numbers that charge the public or patients a premium rate to contact the NHS are to be banned in England" is untrue. The ban will only cover local GPs and Hospitals. It will not cover providers of NHS dentistry, NHS pharmacy, nationally provided and contracted NHS services, nor the many other locally provided and contracted NHS services that cannot be described as being GPs or Hospitals.

3. There are good reasons for NHS Direct not undertaking the trouble and expense of a complete change of its 0845 4647 number, as the number is likely to be phased out shortly. I have long been suggesting that the alternative 0345 4647, which is set up ready and waiting, should be brought into use in parallel so that many callers could at least have the possibility of avoiding a premium charge, even though some would inevitably suffer it. This is not to be announced. This means that either NHS Direct itself, or BT Global Services, as claimed by NHS Direct, will continue to benefit from the full £1 million a year of subsidy provided at cost to callers because this alternative, although in use and working, is not connected.

4. The Department of Health implicitly suggests that all telephone subscribers should fund the revenue share provided to users of 084 numbers, by there being no difference in call charges between these and ordinary landlines. Any NHS provider that did not avail itself of the benefit of this extra funding would therefore be wasting money. As it is extremely unlikely that telephone companies could offer special rates for calling NHS providers, this would have to apply to all users of 084 numbers. In time, everyone who did not wish to incur extra cost by having an unsubsidised geographic number would choose 084. This bizarre suggestion has not been properly explained and remains on record to be seen as the nonsense that it must be.

5. The Minister is invited to respond to my suggestion that we have seen an appalling, but typical, example of populist politics being applied by aggregating a variety of misled and misleading subjective opinions presented in a consultation to come up with an unworkable solution. A consultation is not some exercise in democracy, although it may potentially be used to confirm the existence of strong opinions. Its primary purpose is to obtain such useful advice and information as may be available from those with an interest, so as to inform a careful determination of the policy to be pursued.

This matter must be addressed properly. I look forward to receiving confirmation that it will be.

NHS TO BAN USE OF PREMIUM RATE CALL CHARGES

The Department of Health has spent over 18 months looking into the issue of use of 084 numbers in the NHS and on Monday 14 September 2009 announced:

NHS TO BAN USE OF PREMIUM RATE CALL CHARGES

This was a considerable victory for campaigners, including myself, as it acknowledges the key point of principle:

NHS services are “free at the point of need”. The true and fair cost of providing them must be carried by taxpayers, not patients.

(As I am not totally obsessed with telephones, I can write at length about how this principle applies to issues such as car parking, retail concessions in hospitals, prescription charges, dental fees, eye tests, non-approved drugs, personal care, privatisation, local control and the price paid to one’s telephone company for connecting a normal call, but will not do so in this posting.)

I have had a few days to consider this announcement and the reactions to it.

Everyone applauds the announcement

Some who responded to the public consultation that informed the reported outcome expressed the view that patients should pay NHS providers for access to NHS services. I have however seen very little serious public comment to this effect.

We in the UK value the principles of our NHS and the fact that it has largely survived for over 60 years. We are therefore rightly quick to criticise any failure in its delivery. It seems that very few have spotted that what is stated in the detail of this announcement is undeliverable.

In particular, I have noted support for the announcement from those who have previously defended the use of revenue sharing 084 telephone numbers by NHS providers. I refer to Dean Rayment, Managing Director of Network Europe Group, which provides systems to around 1,000 GPs partly funded by the revenue share earned on 0844 numbers, and Richard Vautrey, Deputy Chairman of the General Practitioners Committee of the BMA, also a contented customer of NEG in his Leeds practice.

There has been no announcement from any telephone company.

Why does everyone agree

The absence of any comment from residential telephone service (fixed and mobile) providers is highly significant. It is they who determine the charge they impose on callers.

When placing calls to 084 numbers they have to share their revenue with the recipient's telephone company. This is at a fixed rate, according to the particular "type" of 084 number, which was selected by the person being called (one hopes with an understanding of what they were doing, and the likley effect). It is therefore quite reasonable and proper for them to charge the caller a premium, i.e. more than they charge when they do not have to give away some of their revenue.This is indeed mostly what happens. There are a few cases where this additional cost is not recovered directly from the caller, but from customers in general through other charges; I do not see this indirect way of distributing the cost of revenue sharing as particularly desirable.

Some seem to believe that all residential telephone service providers, and indeed all of their customers, will be affected by this announcement. It is implied that they will all have to distribute the cost of calls to (some) revenue sharing numbers, rather than apply it as a charge to the caller. Many have reported that there will be changes to telephone tariffs. There is no firm basis for this false and misleading suggestion.

The Department of Health has announced that:
“The ban means that GPs and other NHS organisations remain free to use 084 numbers, providing patients are not charged more than a local rate number.”

• This leads Dr Vautrey to comment “we’re pleased that the phone companies who supply these lines to practices have agreed to ensure that their tariffs are in line with local charges”.

• Mr Rayment announces that “new legislation will be introduced to ensure that local patients do not pay more than the cost of a local call to contact the NHS”.

• The Department of Health explains, “The ban will be enforced through proposed changes to the GP contract (in consultation with the British Medical Association’s GP Committee), and the issuing of Directions to NHS PCTs and Trusts. These changes will be put in place as soon as practicable.”

As these three parties have been involved in intense discussions about this matter over the last few months, it is interesting that they hold completely different views about how a ban on premium call charges will be implemented, whilst allowing use of 084 numbers to continue. To put it simply, what is proposed (in detail) –

CANNOT BE DONE.

The Department of Health’s proposed changes to the GMS contract cannot bear on telephone companies.

The BMA has failed to respond to an invitation to offer evidence that the agreement it refers to exists, after this was denied by a number of telephone companies.

NEG is right to suggest that new legislation would be required to fix telephone call charges in this way, however the only legislation referred to by the DH is the Statutory Instrument that will contain the revised standard terms for the GMS contract.

Ofcom has confirmed that any attempt at statutory price-fixing of the type that would be necessary to actually enforce the ban as it is described would fall foul of EU competition law. (Ofcom has been trying something similar with 0870 numbers over the last 2-5 years. This has now resulted in the fact that many, not all, telepohone companies still charge a premium for calling 0870 numbers, even though the receiving party no longer benefits. Ofcom was only seeking to neutralise the position. In this case the DH appears to be trying to be even bolder, going one step further, by seeking the precise opposite of what has been achieved with 0870.)

It is my belief that attempts to resolve this situation are still ongoing and these announcements are simply part of a continuing negotiation process. Each party is trying to ensure that the blame for the expected failure falls elsewhere.

What happens now

Some NHS bodies may abandon use of 084 numbers as they will be advised, by me if no one else, that some callers are incurring premium charges.

GPs will probably stick to the letter of their contracts, ignoring representations from patients on the basis that the necessary changes have not yet come into force and telling them to complain to their telephone company.

NEG will undoubtedly resume signing up GPs to seven year contracts. It can now use the announcement that use of 084 numbers will not be banned to remove the doubt that has hung over it for the last 3 years.

If the proposed discussions between the DH and the BMA on the GMS contract go ahead, it is likely that the BMA will be happy to accept a clause prohibiting premium telephone charges, so long as licence to use 084 numbers is clearly in place. No GP could be held contractually responsible for the actions of telephone companies, as these are totally outside its control.

Is this a Political issue

Some may draw comfort, or seek to take advantage, from this failure by the government. Making an announcement of a change that cannot be implemented should be seen as worse than the years of inaction that followed its previous false announcement that 084 numbers offer patient a "guaranteed low call rate".

The NHS belongs to the nation, to us all, not to any government that happens to be in power for a period of up to five years. The current Ministers of the Crown in the Health Department are but the temporary custodians of a national asset. They have a duty that extends beyond their partisan desire to secure re-election (or not, as the case may be). Similarly, all those accepting election to serve as Members of Parliament have a duty to all their constituents in respect of the affairs of the nation that extends far beyond a wish for them to be served by the best possible candidate following the next election.

All the major parties are committed to the NHS and its principles. The key principle of “free at the point of need” is under threat of being permanently undermined. There is very little room for partisan Politicking here.

What do we do

The apparently worthless announcement must be strongly challenged now. It must be corrected or explained.

The issue has been returned to the public domain. The question of what is to happen must be resolved there, before necessarily private negotiations on how it may be achieved can be resumed.

Those of us who care for our NHS must use whatever resource we have to prevent these negotiations from failing to achieve the intended and declared objective.

The ban must go ahead in a way that works.

Briefing to Liberal Democrats on telephone numbers used by public service organisations

The following is the text of a message sent to leading Liberal Democrats.

I was concerned to read John Thurso’s proposals for a “Universal Service Code” for “organisations providing a service to the public”, in particular the suggestion that there must be a commitment to

“Make their customer service phone number free to call from both mobiles and landlines”.

This suggests that LibDems do not understand the issues on which I am campaigning. By proposing an excessive response to a genuine issue, it distorts debate by making it too easy to reject the arguments for change. I would propose a commitment to

not impose charges on telephone callers for access to public services

(I have subsequently been directed to the relevant policy paper).

Free from mobiles!

There are presently no standard arrangements in place for making calls to customer service lines free to call from mobiles. At present, any organisation wishing to achieve this would have to negotiate some sort of deal with each of mobile companies. A special arrangement exists for mobile companies to waive their charges on calls to clearly defined “helplines”, however this voluntary scheme could not be extended to cover all customer service calls.

The costs of mobile telephony are presently reflected in call charges, rather than line rental. The simplest way to address the problem of these high call charges would be to transfer the costs onto line rental charges, but think of the implications! This proposal suggests that these costs should be carried by customers in general in the private sector and taxpayers in the public sector, rather than those who use mobile phones.

In the absence of any suggestion about how free calls from mobiles could be achieved, it is foolish to suggest that organisations be required to commit to something they would have great difficulty in achieving, even if they were willing to do it and it was the right thing to do.

Who pays for what?

I believe that in most cases it is reasonable for the caller to incur the cost of a “normal” call from their selected telephone service provider when contacting an “organisation serving the public”; I include providers of “free at the point of need” NHS services. Incidental third party costs are invariably incurred when accessing services, e.g. the bus or taxi fare, or cost of parking in a public car park, when attending an appointment, the cost of a broadband service to access an organisation online and the cost of a stamp when writing. Whether or not unlimited “normal” calls are inclusive in one’s telephone package, I see no reason why these costs should invariably be subsidised by taxpayers or other customers.

The issue on which I am campaigning is use of “revenue sharing” 084x telephone numbers. These cause the caller to incur a premium charge (in one way or another) to subsidise the cost of providing the service. I believe that the “neutrality” offered by 03xx or ordinary geographic numbers, whereby the caller incurs only their own incidental costs, is quite appropriate for most cases and that nothing more should be demanded.

The essential point is that callers should not be subject to a charge imposed by the “organisation serving the public” (through use of a revenue sharing number), except where this is a justified and fully explained service fee. That is very different from saying that organisations should pick up the bill for whatever type of telephone service the caller happens to use.
. 

Expecting an imminent announcement by the Department of Health

Pending an imminent announcement of the outcome of the consultation by the Department of Health into a proposal to ban use of revenue sharing 084 telephone numbers in the NHS, I have circulated the following comments indicating my hopes and expectations for this announcement.

I must express my hope that it will properly addresses the issue covered in my comments - NHS GPs using 0844 numbers can change to 0344 [1]. The other key issue to which I have repeatedly referred is the need for NHS Direct, unable at this time to comply with a ban, to immediately introduce 0345 4647 as an alternative working in parallel with 0845 4647 [2].

I will react as best I can to whatever is said, hoping to do so in a spirit of congratulation and rejoicing at a reaffirmation of the principles of the NHS, as they apply to all providers of NHS services. We will await a definition of what is understood to be “NHS services” and how far any ban will extend to those who also provide other services, such as NHS Hospitals, GPs, Dentists and Pharmacies [3].

A ban on the use of 084 telephone numbers must address the simple fact of revenue sharing, which applies to them all. It must not be confused by reference to the often perverse means by which telephone companies raise the money to provide the revenue share through complex tariff structures. Any repetition of the concept of “the cost of a local call”, as used in current guidance, would cause any regulatory prohibition to be utterly worthless as this has no meaning in general terms.

The relative costs of different types of calls vary between providers, between different tariffs and even between times of the week and day. With reference to one widely used tariff, calling any revenue sharing number would be cheaper for some than a local call for some during weekday daytimes, but not in the evening or at weekends, yet for others it would be invariably much more expensive. On some tariffs, subscribers benefit from free calls to local numbers at all times, but may need to access NHS services outside their “local” telephone charging area. I do hope that we are not going to have to get into this type of nonsense [4].

Given that the Department of Health has been working on this issue for over 18 months, since an “evidence gathering” exercise began in January 2008, there can be no excuse for not getting all of the detail right. One must hope that the four numbered specific matters to which I refer above have not been overlooked, and if so, that they will be addressed before a public statement is published.

NHS GPs using 0844 numbers can change to 0344

Talk Talk confirms that NHS GPs using 0844 numbers can change to 0344 to comply with the forthcoming ban

We are promised a ministerial announcement on the outcome of a consultation about a proposed ban on use of revenue sharing 084 telephone numbers in the NHS within the next month.

Opal Telecom, the business services part of the Talk Talk Group, is the provider of the vast majority of the expensive revenue sharing 0844 telephone numbers improperly used by many NHS GPs.

Some have mischievously suggested that these GPs with 0844 numbers must be excluded from the forthcoming ban, BUT ... This is founded on the false understanding that their long term contracts with Talk Talk deny them the opportunity to simply move to a different type of telephone number in order to comply.

THIS IS NOW SEEN TO BE UNTRUE.

Opal Telecom (Talk Talk) has recently published a booklet advising customers about how they can change their telephone number, referenced from this page.

Revenue sharing on 0870 numbers was banned for everyone by Ofcom with effect from 1 August 2009; that is what prompted this publication. As some Talk Talk customers on 084 numbers face a similar ban in the near future, this same information is directly relevant to their situation.

• “Move to another number range” is advised as the way forward for those who do not wish to face the consequences of new regulations. The document lays out the options.

• There is extensive reference to the 03 range, including confirmation that “Ofcom has reserved 034x numbers for customers with matching 084x numbers”. Changing only the second digit of the telephone number (0844 xxxxxxx to 0344 xxxxxxx) would ease many of the difficulties inevitably associated with a number change. Other ways of avoiding revenue sharing are also advised.

• Talk Talk Group corporate values are said to include “Flexibility and understanding” and being “here for the long term”.

This shows that GPs will be able to readily comply with a ban, without being required to abandon existing systems or suffer contract cancellation penalties.

The Talk Talk Group states that it is ready to offer the necessary flexibility. Its understanding of the fact that the loss of revenue share income may create financial difficulties for its customers, and its desire to continue to serve the NHS for the long term, will doubtless ensure that it makes the most generous possible new arrangements for current and future NHS users of its services.

This may be further encouraged by a desire to avoid any embarrassment at having been part of what many see as a scam on the NHS. The false suggestion that its 0844 numbers guarantee callers a low rate, when that is clearly untrue for its own residential customers not to mention those with mobiles, will be remembered by the Department of Health officials who repeated it in a statement in 2005.


I am very concerned that as there has been no public discussion of this obvious solution for NHS GPs, it may not have been recognised. Major contributors to the Department of Health consultation, notably NEG Ltd – the provider of the “Surgery Line” system that is funded out of the revenue share on these numbers – and also the BMA, have made no reference to this option in their public statements.

My attempts to obtain reassurance that the Department of Health is properly aware of this option have received no response. I do not wish to pre-empt the forthcoming announcement, however I do not wish to hear it made without one of the primary elements having been dealt with. As stated above, Ministers have apparently been misled on vital issues relating to this matter previously.

Further to my previous briefings, this newly published document states that the number change option is indeed available. This information needs to be reported and circulated now to correct earlier misleading reports of GPs being tied in to contracts that prohibit a change of number. I have good reason to believe that some GPs have not been made aware that this option is available to them. It would be foolish to have to bring this matter up on the back of an announcement which falsely assumed that some GPs had to be granted immunity from a ban.

Who “profits” from revenue sharing telephone numbers

Defenders of the use of revenue sharing telephone numbers commonly deny "profit" or "receiving income". These comments address that issue.

How do revenue sharing telephone numbers work?
How does this affect the caller?
How does this affect the recipient?
What is "profit"?
Who "profits" from use of revenue sharing numbers?
Summary

How do revenue sharing telephone numbers work?

When a telephone company connects a call to any number beginning 084 the amount they pay to the telephone company that terminates the call (the "termination fee") is inflated so that the revenue they earn can be shared with the receiving party. This arrangement is fixed according to the type of number - all 0845s are of one type, 0844s are of many different types. When someone selects a 0845 or 0844 number they are signing up for this arrangement and its consequences.

Note: Yet higher "termination fees" apply to calls to "Premium Rate Services" (087 / 070 / 09), which are regulated specially. The principle is however exactly the same.

How does this affect the caller?

Because higher costs are involved the telephone company needs to recover this money. This is normally by the imposition of higher call charges and exclusion from call packages. For various reasons, BT deals with this in an odd way – see BT charges may vary from others. The essential truth is that the caller is paying, probably directly, for the benefit delivered to the person called.

In some cases, charges for all "non-standard" numbers are lumped together in a single rate that reflects the much higher costs involved in calling "Premium Rate Services". In this situation the premium paid is due to, but quite disproportionate from, the amount paid as revenue share.

How does this affect the recipient?

The way in which the revenue share benefits the recipient is a matter between them and their telephone company. This is commonly seen as being commercially confidential.

Typically the revenue share is first used to offset the costs of providing the incoming telephone service, which may include a number of additional features such as redirection and call queuing. Where an advanced private telephone network is provided it is likely that the full value of the revenue share would be taken up in offsetting these costs.

The revenue share may also be used to offset costs for unrelated services from the same provider, such as outgoing calls, or other incoming calls on 0800 numbers.

After other services have been fully paid for, a balance may be due to the recipient from the telephone company. In some cases this may be assigned to cover the costs of independently provided local telephone services, e.g. a local exchange and other telephone equipment. This is what happens in the case of the "Surgery Line" system used by many GPs.

Whatever may be received as cash "income" by the call recipient, it is unlikely to be the full value of the financial benefit obtained from use of a revenue sharing number.

Anyone who claims to have forgone any benefit whatsoever is suggesting that they are gifting that benefit back to their telephone company. There is no way that any such decision can have any effect on the cost to callers.

What is "profit"?

For a trading body, "Profit" is generally understood to be what remains from income after expenses have been deducted. Any specific financial arrangement that increases income or reduces expenses is reasonably said to be a contribution to "profit".

Many users of revenue sharing numbers are not trading bodies and therefore cannot declare a "profit". Examples are NHS trusts, government departments, local authorities and most other public bodies.

In deciding what is "profit" it is important to identify the specific financial arrangement that one is referring to. In this case it is important to isolate use of a revenue sharing number as against use of a number that does not provide revenue sharing, rather than referring to the service which uses the number.

Providers of "Premium Rate Services" would generally expect to generate a profit from the service, i.e. income from incoming calls would more than cover all of the costs involved in providing the service. A service that uses a revenue sharing number would have its costs partially offset, but would be unlikely to produce an overall positive return. For example, if a new government helpline were to be set up using a revenue sharing number one would not expect the benefit from use of a revenue sharing number to more than cover all of the costs associated with providing the service.

For this reason, I always try to refer the fact that the costs of a service are SUBSIDISED by use of revenue sharing numbers. In many cases that subsidy will contribute to "profit", however the word "subsidy" avoids the potential for denial due to the wider implications of the word "profit".

"Subsidy" by callers is equally unacceptable in the cases where use of revenue sharing numbers is rightly attacked.

Who "profits" from use of revenue sharing numbers?

Apart from users who can apply the subsidy obtained as a contribution towards a "profit", as described above, others can profit.

Mobile telephone companies commonly impose call charges with a premium that more than exceeds the additional costs involved. Rates for calling revenue sharing numbers are rarely a strong feature in the marketing of telephone services. Competition is seen to apply to rates for calling ordinary numbers, so these are kept low. Calls to revenue sharing numbers are also excluded from both bundled and unlimited packages. Whilst the additional cost involved in placing calls to revenue sharing numbers is much less than that for Premium Rate Service numbers, a common rate is often applied.

Those providing revenue sharing numbers obviously seek to profit (quite properly) from this aspect of their business. Consumer misunderstanding about the cost of calling these numbers is however exploited by those who promote adoption of these numbers by suggesting that all callers pay low rates to call them. Unfairly selective examples of call charges and reference to historic features such as "local rate" are used and then picked up by users of the numbers to mislead.

Perhaps the worst example is those who promote "self-funding" telephone systems. It is indeed possible to fund telephone service and associated local equipment out of the revenue share. The money must however come from somewhere! In the case of the "Surgery Line" system promoted to NHS GPs by Network Europe Group, it is not a gift from Talk Talk, the provider of the revenue sharing telephone numbers. It is simply passed on by Talk Talk, after taking its own slice, from the inflated termination fees paid to Talk Talk by the call originating telephone companies. All such companies, including Talk Talk, invariably recover this money through higher call charges to their customers – in this case, NHS patients accessing NHS services from their NHS GP.

Summary

Not all use of revenue sharing numbers produces cash "income" for the user. The financial benefit is often exclusively, and always to some degree, achieved by the reduction of costs.

Whilst the term "profit" is appropriate in some cases and improper denial should be strongly challenged, I strongly suggest that the word "subsidy" be used to describe the financial benefit achieved by users of revenue sharing telephone numbers.

Profit may be properly denied where it is with reference to a service overall or to a non-trading body. Subsidy may not.

BT charges may vary from others

It is common practice for users of revenue sharing telephone numbers to quote a charge levied by BT, accompanied by the statement “other providers may vary”.

This is misleading, especially when referring to the BT charges for calls to revenue sharing 0845 and 0844 numbers, because only they are regulated. It is BT’s charges that vary from the pattern applied by other landline service providers (notably Virgin Media) as well as all of the mobile providers.

When seen in relation to its charges for calls to “normal” 01/02/03 numbers, which are not regulated, the BT charges for these calls have been atypical for many years. This perverse difference will pass a significant landmark when the latest set of BT price increases come into effect on 1 October 2009.

What does BT charge for these types of calls?

Different tariffs apply to “business” and “residential” subscribers. I refer here only to the latter, and consider only the general situation.

Those who quote BT prices have three different bases from which to take their figures.

• The “Standard” tariff – the name sounds appealing, but this is only a model which applies to almost none of BT’s actual customers, the vast majority of whom subscribe to “Call Plans”.

• Calls within a Call Plan – Call Plans are in effect at certain times, according to the plan selected: Anytime, Evenings and Weekends or Weekends only. No additional charge is made for calls that fall within the terms of the Plan.

• Calls outside a Call Plan – For Call Plan customers, specific (not “Standard”) charges are made for calls that fall outside the terms of the Call Plan.

It is clear BT policy to encourage customers to subscribe to the most inclusive Call Plans. It has been steadily and significantly increasing the call setup fee and rate per minute (where possible) for all calls that fall outside Call Plans.

Figures from any one of these three may be described as being “the BT charge”.

How is BT different in respect of revenue sharing numbers?

For historic reasons, BT is exclusively subject to a regulation known as “the NTS Condition”. This covers calls to 0845 and 0844 numbers. (0870 was removed from this as part of the changes that came into effect on 1 August 2009.)

The pence per minute element of the retail price (excluding VAT) that BT may charge for these calls is fixed. BT is required to pay over the vast majority of this revenue to the telephone company that terminates the call (the termination fee). Other operators have to make similar payments, but are free to set their rates to obtain whatever margin they wish.

BT is now similarly free to take whatever margin it wishes on calls to “normal” 01/02 numbers. Calls to 03 numbers can be charged at no greater rate – this is a regulatory requirement on all operators. The call setup fee that BT charges for all calls outside the terms of a Call Plan is not regulated.

How does this difference show itself? – (1) 0845 numbers

For many years the regulated BT charge for calls to 0845 numbers has been less than the unregulated charge it chooses to set for calls to 01/02/03 numbers. This is despite the fact that 0845 calls cost BT much more in termination fees.

From January 2009 BT included calls to 0845 numbers within its Call Plans. The prices of all the Call Plans was increased shortly afterwards (presumably to accommodate this change). The cost of revenue sharing is therefore now being carried by all subscribers to BT Call Plans. Ofcom has yet to address the impact that this has on the application of the NTS Condition, as the prices for Call Plans are not regulated.

Because the BT margin on calls to 0845 numbers is regulated to be very small, it had relatively little to lose by making this move. Suggesting that competitors should follow this lead is plain cheeky.

There are a few competitors who invariably mirror BT pricing structures. They not only charge the perverse lower rates for calls to 0845 numbers but have also added them to their equivalent of the BT Call Plans. One has to assume that they manage to achieve this by also mirroring the extensive cross-subsidy that BT relies on to produce an overall profit.

How does this difference show itself? – (2) 0844 numbers

From 1 October 2009 the cost of a weekday daytime call to a “normal” (01/02/03) number will increase to 5.2p per minute (including VAT at 15%) for calls by Call Plan subscribers that are outside the terms of the particular Call Plan (e.g. weekday calls for those on the weekend-only Call Plan).

The rate for the most expensive type of 0844 number, as used by many GPs, will remain fixed at 5p per minute including VAT at 17.5% - currently 4.894p per minute, including VAT at the temporarily reduced rate of 15%. This applies to all BT customers at all times – calls to 0844 numbers are never inclusive under a Call Plan, or indeed any other package from any provider.

This will be the first time that calls to all revenue sharing numbers have been seen to be cheaper than the charge imposed for calls to “normal” numbers.

One awaits this being seized upon by those who benefit from the revenue share on 0844 numbers, as evidence that calls to them are cheaper than “normal” calls. Such an observation would disregard the following significant factors:

• BT would stand alone in this situation (with those few who may shadow it)
  
• It does not apply with reference to Call Plan inclusive calls (which do not include 0844)
  
• Having increased by 33% in 12 months, the rates for calling “normal” numbers are clearly intended to be penal for those who call outside the terms of their Call Plan. The equivalent associated call setup fee has increased by 56% (both percentages are based on VAT exclusive rates). Such a price increase cannot be justified on any other basis.

A level of charge that so clearly represents some sort of penalty cannot reasonably be used as the base point for a normal comparison. I cannot however see this consideration preventing such a comparison being made by someone keen to make a point.

What do other providers do?

Whilst cross-subsidy is not unique to BT, most charges for calling 0844 and 0845 numbers reflect the pattern of the cost involved more closely.

The increased cost of the higher termination fees that support revenue sharing are (not unreasonably) generally reflected in higher call charges. Similarly, calls to 0844 and 0845 numbers are not covered by call inclusive packages. This is because the greater cost would inflate the cost of the packages disproportionately. (Virgin Media offers premium packages of pre-paid call minutes which cover 0844 and 0845 calls, but along with calls to mobile and premium rate service numbers!)

Cross-subsidy is seen to work in the opposite direction with the mobile providers. Charges for calls to “normal” numbers are a focus of competition and are therefore kept low. Charges for calls to revenue sharing numbers are inflated to provide a much greater margin than would be obtained pro rata by adding the cost of the inflated termination fee to the charge for a call to a “normal” geographic number. The greater use of a variety of limited and unlimited call packages in mobile tariffs, from which 0845 and 0844 calls are invariably excluded, typically makes the differential even greater.

Summary

In a simple world the higher costs incurred by call originating telephone service providers in providing a revenue share to recipients through their telephone company would be invariably and visibly reflected in a higher charge seen by callers.

The above should have provided an explanation of why BT charges for calling all 0845 and 0844 “revenue sharing” numbers are atypical. Sadly, this is not simple.

Part of this is due to regulation, which effectively causes BT to have to inflate the margin it takes on other calls. These prices for other calls, when chargeable, are also inflated to encourage subscription to more extensive Call Plans.

Because other providers are not constrained in this way they (more naturally) reflect the higher costs they incur in originating calls to revenue sharing numbers in higher charges.

Conclusions

The “NTS Condition” which was intended to provide price predictability (at higher than normal rates, for added value services) when BT was the predominant provider of telephone services is now seen to have totally perverse effects. It needs to be reviewed.

Despite BT still being the largest provider of telephone services by some way, the structure of its charging is seen to be totally atypical. It is therefore wholly unsuitable for its call charges to be seen as exemplary.


Tariff examples

Apart from the one example necessary to demonstrate the landmark that will be passed on 1 October, I have avoided reference to specific rates in these comments. I present them as holding the essential points that can be deployed with reference to any specific example.

If used to present an argument by themselves, these comments would be helped by meaningful illustrations using examples of frequently used tariffs. Confident in the essential truth of the statements made, I do not possess the evidence necessary to show which of the hundreds of detailed tariffs published by the various providers (or indeed the many tariffs that lack essential detail) would represent meaningful examples. I do not wish to undermine the points made here by opening myself up to challenge on the validity of examples that I may select in support of them.

 Furthermore, comparison with the cost of “normal” calls is not easily expressed numerically when considering inclusive packages, which have a significant part to play in current telephone charges.

 I would be happy to assist anyone who does hold the necessary information to enable something more comprehensive to be prepared.

Tax credits boss orders: Keep callers on the line

My involvement in the issue of revenue sharing telephone numbers is not restricted to the NHS. I offer the following observations on a closely related issue. These words are derived from the text of an email message to relevant parties.

I was very disappointed to read this article - Tax credits boss orders: Keep callers on the line, from the Mail on Sunday.


The source for the story probably fails to appreciate that HMRC does not gain proportionately from the charges incurred by callers if call durations increase. Whether a caller is paying nothing extra (e.g. on a BT call plan) or at the 40p per minute rate applied by some mobile companies makes no difference. The revenue share that is received by its telephone service provider does increase at a relatively flat rate.

When looking at the overall cost / benefit implications of any procedural change, I would imagine that whatever benefit is achieved on account of the use of revenue sharing numbers would be relatively insignificant when set against, for example, personnel costs per minute. I am not therefore drawn to accept the conspiracy “profit” theory suggested by the article.

The point about the impact on callers is however sound. If any change in policy has increased the duration of calls (especially if this is time when there is no conversation taking place), then the cost to the caller must be a major factor in consideration of whether it is appropriate.


I note that Linda Maslen, who is quoted in the article, has worked with the Contact Council of the Cabinet Office on guidance for Contact Centre Accreditation. Not only would this lead one to assume that the demands of the “public mandate” requirement for accreditation would preclude introducing wasted “air-time” for the caller, but also that she was fully in touch with the activities of the Council, through Chris Hopson, its HMRC representative.

For this reason it is astonishing, as well as deeply disappointing to hear her quoted, or permitting a colleague, to say “HMRC do not receive any payments from any service provider in respect of 0845 numbers.” Whatever the degree of factual accuracy of the careful wording of this statement, the briefing from the Contact Council - Clarification Statement on Telephone Number Ranges - should have put an end to this type of misleading nonsense being put about.

The Contact Council briefing makes it clear that "For 0845 numbers, the charge made to the caller is either retained by the TCP or shared with the department receiving the call. All departments are required to know who retains this additional revenue and to ensure transparency to the public." (I sincerely hope that the HMRC statement is misleading, because if HMRC receives no benefit then this is even worse; see below.)


A well briefed reporter followed up on the initial statement by inviting comment on what HMRC allowed Cable and Wireless to do with the additional revenue that results from the decision to use revenue sharing, rather than 03, numbers. (This decision has been in effect for the last two years, since 03 numbers came into use.) Whereas NHS Direct has confirmed that the extra revenue is all retained by its provider and the DWP confirms that it is offset against other charges, HMRC pleads commercial confidentiality – a plea which would presumably cover any form of impropriety.

It may be fair to conclude that if direct payments were being received then commercial confidentiality would have prevented this from being admitted. If considerations of commercial confidentiality do not prevent HMRC from confirming no direct receipt of payments, one may assume that indirect receipt of benefit would also have been denied if it were not occurring.


By demanding transparency, the Contact Council is working to ensure that every case where a) public sector bodies take subsidy from telephone callers is properly explained and justified. It follows that the situation must be promptly corrected where no adequate justification can be offered. Those who use revenue sharing numbers with the consequent additional expense to callers, whilst b) allowing telephone companies to retain all the benefit must be immediately called to account for this gross abuse and neglect of duty. The Contact Council is currently collecting evidence from all departments and has a duty to ensure that any serious evidence of the latter is dealt with appropriately.


I note the strongly worded comments of John Mann MP, "This is a way of sneakily milking the poorest at a time when they are at their most vulnerable." Mr Mann reminds us that parliament and Ministers have a role in this matter. Whilst the former cases (a) may have to be considered by the relevant Departmental Select Committee (The Treasury Select Committee in the case) and the Public Administration Select Committee (in general), the latter (b) must be referred immediately to the NAO and the Committee of Public Accounts. None can be allowed to sit in limbo between the two.


We must end the double-speak on this issue. If use of revenue sharing telephone numbers is justifiable, then let it be justified. If not, then let it cease, as swiftly as is possible. (Referring to the perverse and wholly atypical BT tariffs and saying “we receive no income” is not a justification.)

Looking forward to the end of use of 084 numbers in the NHS

We are promised that at some unspecified time in September, "the Minister", perhaps Mike O'Brien, or the Secretary of State for Health, Andy Burnham, will make an announcement. This will cover the "outcome" of the consultation on a proposal to ban use of (revenue sharing) 084 telephone numbers in the NHS that concluded in March. The announcement will be made in parallel with publication of the Department's formal response to the consultation. Has publication of the response been delayed so as to avoid stealing the thunder of the Minister? If so, then he will perhaps be making a long-awaited and highly positive statement - "The NHS is free at the point of need" (pause for cheers) "... and so we are going to clear up the mess that was made in 2005 when use of revenue sharing 0844 and 0845 numbers was not only permitted, but encouraged" (pause for sighs of relief and mutterings of "not before time" accompanied by those for whom this past faux pas came as news crying, "WHAT"!!) "..., but not yet.". I am concerned that the work done on this matter by the Department from January to July of 2008 and from December 2008, when the consultation was launched, up until now has still not managed to get the major player needed to contribute to a solution fully on board. Most major actual NHS bodies will have little difficulty in switching from 084 numbers, as they will have been preparing for it for some time. Local providers will mostly go (back) to geographic numbers. 03 numbers will be used for more widely based national services or those cases where the genuine technical benefits of non-geographic numbers warrant use of a 03 number. The 034 range is reserved for those cases where a simple migration is desirable. The main NHS Direct service on 0845 4647 could not sustain the cost of a major number change operation, as its days as a separate service are numbered anyway. Use of the ready 0345 4647 number as an alternative, running in parallel for as long as the service lasts will provide the necessary acknowledgement of the need for change.

The problems will doubtless be found with the private sector bodies who provide NHS services under contract, e.g. GPs.

The "major player" referred to is THE TALK TALK GROUP.

The business division of Talk Talk is sometimes known as Opal Telecom. Talk Talk is part of The Carphone Warehouse Group.

The Talk Talk Group provides around 1,000 revenue sharing 0844 numbers to NHS GPs, through its agent NEG.

The additional revenue derived from the premium charges invariably associated with calling these numbers is used towards funding various elements of the "Surgery Line" system. All elements of this system are sold on a lengthy contract, commonly 7 years. Many parties have urged the Department of Health to allow GPs with such contracts to retain their 0844 numbers until the end of the contracted term. If (or when) a ban on use of revenue sharing numbers is introduced, it would be totally unacceptable for some NHS providers to continue funding their operations with money derived from patients. It is unacceptable anyway, but perhaps apparently more so when others have ceased the practice, and are prohibited from taking it up. TALK TALK can help resolve this problem in two ways. Firstly, it is normal practice in the telecoms business for customers to be able to vary the terms of an existing contract by switching from one type of number to another. Every 0844 GP number could be readily switched to the 0344 equivalent with no disruption to the service. Talk Talk would simply need to confirm that such a variation to the terms of the contract is permissible in these cases. Neither Talk Talk nor NEG has responded to invitations to confirm that this possibility exists, nor has any denial, or reason to suppose that it is not, been offered. (The way in which a representative of NEG addressed the question in a TV discussion is typical.) If such a change were to be undertaken, there remains a problem, which is the second area where TALK TALK is well placed to assist. On switching from 0844 to 0344 GPs would find that the flow of funding from patients to pay for the elements of their telephone system had dried up. Rather than providing money from each call, Talk Talk would be levying a charge for the modest part of the system that it provides. This consequential variation to the terms is a normal feature of such a contract variation. The benefits derived from these systems are mostly obtained from locally installed equipment (quite independent of the exchange and number). This equipment is currently paid for (at least in part) out of the residual shared revenue. Some (notably the BMA) have suggested that telephone companies should provide the revenue share on 0844 numbers at no cost to the caller, at least in the case of NHS providers. This is a direct invitation to TALK TALK to continue paying over the revenue share (although it would no longer be receiving enhanced payments from callers' telephone companies) after the number had been switched to 0344. Looking at the position of TALK TALK, and the Carphone Warehouse Group, I suggest that such a request would be stretching its generosity too far. I would however expect some gesture to be seen to be appopriate in recognition of its role in a very unhappy situation - ripping off NHS patients, as some would see it. Offering the very best commercial terms to GP users (i.e. those that would apply if "the NHS" were a single customer) for the remaining period of their contract would be a modest step, that could perhaps be exceeded.

The "Surgery Line" systems themslves, although generally seen as being grossly over-configured and therefore very poor value for money, are understood to provide an effective solution for most of those who use them. It would therefore be most regretable if they all had to be removed, with high termination charges on contracts and leases being incurred by GPs. Some means of making up the funding shortfall has to be found in each case, given that IT IS UNACCEPTABLE FOR THE COSTS OF SURGERY EQUIPMENT TO BE MET BY PATIENTS.

If GPs end up having to complete contracts on a system that is found to be poor value for money at their own expense, they can have little complaint. They are only fulfilling the terms of an arrangement that they negotiated on behalf of their patients. Whilst they may be disappointed to be learn that that they had no right to commit patients to expenditure to fund their practice, they cannot complain about the level of cost that they committed to.

There may be scope for arguing that the Department of Health or their PCT improperly advised GPs that it was acceptable to use money from patients to pay for surgery facilities. If so, then anyone found to be responsible for such impropriety must accept their responsibilities. If pressed, this could become ugly. As a profitable business with a strong sense of public duty, TALK TALK could have a major part to play in retaining its customers and its public reputation. The more it is able to do to help, the less will be the need for a situation in which it has played a significant role to become 'difficult'. I fear that "the Minister" will make no reference to any such arrangement when he announces that those with contracts in place for revenue sharing telephone numbers will not be required to make the quite normal variation that is possible, but will be allowed to serve out the term of their contract for 0844 numbers from TALK TALK. Should this happen, I believe that those who escape the ban would be placed in an intolerable situation. Their patients will continually be able to point out that the charges they are levying have been deemed to be improper. Neighbouring practices, who have to meet the full cost of their telephone systems, will have grounds for claiming that they are suffering exceptional costs in meeting locally established standards. Amongst those in this situation will be many who perhaps misunderstood the situation that they were getting themselves into, or now regret the decision that was taken. That is no excuse, but they will be very keen to benefit from any way in which their options to move forward could be helped by collective action. It would be wholly unacceptable for the Department of Health to leave some practices stranded by not enforcing the requirement to adhere to the prinicples of the NHS universally and immediately. Assistance from TALK TALK is fundamental to achievement of this.

David Hickson's NHS Patient Blog

Having been involved in public compaigning activites on matters of general public concern for some years, I have decided that now is the time to get into blogging. I contribute to discussion forums, have a campaign resource website and have been playing with Twitter. I put a lot of energy (and some powerful writing) into many emails that are not retained by the recipients.

The current campaiging focus sits within a much broader context, but relates to the shortly expected outcome from a public consultation undertaken by the Department of Heath from December 2008 to March 2009.

The consultation was on a proposal to ban use of revenue sharing 084 telephone numbers within the NHS. A "revenue sharing" telephone number is one which causes money to pass from the caller to the called party proportionate to the length of the call.

The manner in which this money is collected by the caller's telephone company and distributed at the other end varies. The confusion this creates is exploited by those who suggest that callers pay no extra and receivers receive no income. The transfer of funds may be difficult to see and may be obscured by other factors, however the prinicple stands and this is invariably what is happening (in one way or another) in every case.

Given this, one may wonder at the need for a consultation or any deliberation. The NHS is free at the point of need, is it not. That is true, however many NHS providers have been allowed to come to rely on the funding provided by revenue sharing and this cannot be switched off at a stroke without considering the impact. Furhermore, because the revcnue sharing process is tied to the numbers being used, many numbers will have to be changed.

In further postings I will doubtless be addressing many of the specific issues in detail and also widening the scope of the discussion. I will be covering other issues relating to the NHS being "free at the point of need", other public sector organisations using revenue sharing telephone numbers and many issues more than one step removed from the primary focus.

The name "NHS.Patient" is used simply to indicate my status as nothing more than one part owner of "our NHS". It is to be seen as being used with the indefinite, not definite article.