Smarting from a dust-up in the Commons, and having conceded a "full independant enquiry" into National Health Service administration staffing, Hacker learns (from his all-knowing driver Roy) that the year-old, 1,000-bed St. Edward's hospital has 500 administrators, but no doctors, nurses, or patients. He confronts Humphrey, but Humphrey evades responsibility and advises Hacker on how to himself evade responsibility during the equiry.
Bernard reminds Hacker that some Cuban political refugees need to be somehow housed, regardless that there isn't any funding for it. He also confirms the situation at St. Edward's; that money for doctors and nurses was cut after the administrative staff was hired.
Humphrey, meanwhile, has a word with his counterpart at National Health, who is unwilling to move on opening St. Edward's, but advises Humphrey that Billy Fraser, a firebrand administrative-worker union leader, can be of use in blocking Hacker's plans to get rid of some administrators to have money to hire medical personnel and open the hospital for patients.
Hacker confronts Humphrey again, insisting that taxpayer money be more effectively spent on the Health Service. Humphrey rejoins that 'more effective' is a matter of perspective, and from his side, having more administrators is 'more effective'. Hacker ups the ante, directing that some administrative staff be let go to hire some medical staff at St. Edward's. Humphrey goes to coach the union officials into striking in response to the proposed cuts, and maneuvers to get Billy Fraser to St. Edward's to radicalize the union response.
Hacker goes to tour St. Edward's, and sees the shining new
equipment, busy administrators, and not a single doctor, nurse, or patient. He insists that some administrators be let go and medical staff be hired, and some patients be brought in. Fraser threatens a strike, and Hacker dares him to do so. Back at the Ministry, Hacker congratulates himself that he has brought the problem to a close, but Fraser ups the ante by calling a strike of all hospital workers in London to protest the layoffs.
Humphrey rushes in to say that the Parlimentary enquiry may be going badly for the Department, and mentions that Sir Morris Williams, the enquiry chairman, is also in charge of looking for space to house 1,000 of the Cuban refugees. Hacker does some quick math, and directs that the layoffs be stopped, and that Sir Morris be informed that 1,000 beds are available for refugee housing in St. Edward's, and that the press be informed that "everybody's happy."