White paper: reforms to bolster service integration

Many of the reforms introduced in the Health and Social Care Act 2012 will be reversed. The NHS in England has been preparing for the changes, with the creation of integrated care systems (ICSs), greater collaboration, a move away from an adversarial contracting round, and the increasing popularity of contracts that share risks across commissioners and providers. NHS England and NHS Improvement have all but merged. Even more partnership working has been seen during the Covid pandemic, with block contracts and system financial envelopes introduced.

The white paper said that at system level, statutory ICSs will be established. Each ICS will be made up of an ICS NHS Body and an ICS Health and Care Partnership. The creation of ICS NHS bodies will allow NHS England to set system financial allocations and objectives – ICS NHS bodies will be required to meet these objectives, including delivering financial balance.

The ICS NHS bodies will be responsible for the day-to-day running of the ICSs, and charged with developing a plan to meet their populations’ health needs; securing the provision of health services locally; and developing a capital plan for the NHS providers in their patch. They will exercise clinical commissioning group functions, together with those currently performed by the non-statutory ICSs and sustainability and transformation partnerships.

Trusts will remain separate, statutory bodies, retaining their current financial statutory duties, with a new requirement on system financial objectives. ICS NHS bodies will not have power to direct trusts.

The ICS Health and Care Partnership brings together health, care and public health bodies – and potentially other representatives such as housing or social care providers – to develop a plan to address system-wide health, public health and social care needs. The ICS NHS bodies and local authorities will be required to take these plans into account when making decisions.

The paper added that staff should be supported through organisational change, and the government would seek to protect employment. A national HR framework will be available in April, and guidance to support appointments to the new ICS NHS bodies will also be developed.

In its document setting out draft proposals for legislation for ICSs, also published today, NHS England said it will issue guidance on the clinical leadership of the new statutory bodies later this year.

NHS organisations, including ICSs, will be required to pursue the triple aim of better care for all patients, better health and wellbeing for everyone, and sustainable use of NHS resources. Better use of data would underpin a population health approach.

There will be changes at national level too. The NHS Trust Development Authority and Monitor (NHS Improvement) will be merged with NHS England to ensure they can fully collaborate. The new body will be called NHS England and will answer to the health secretary for all aspects of NHS performance, finance and care transformation.

As well as supporting integration, the measures would also sweep away competition. The NHS would no longer need to tender services, but choose where it is appropriate. With the current procurement arrangements removed, NHS England has published proposals for a new provider selection regime for ICSs.

Under these proposals, procurement rules under the Health and Social Care Act 2012 and the public contracts regulations, which promote competition, would be replaced with a new duty that services be arranged in the best interests of patients, taxpayers and the population. This would apply to the commissioning of healthcare services, including local authority commissioning of public health services.

Value should be one of five criteria in the new provider selection regime, but value should not be interpreted as the cheapest offer. Rather, an arrangement would constitute value where it represents the best trade-off between cost and benefits to the individual in terms of outcomes, to the community in terms of health and wellbeing, and to taxpayers in reducing the burdens of ill-health.

The other criteria include service sustainability and social value; access, inequalities and choice; integration and collaboration; and quality and innovation. NHS England said it would work with government to ensure the procurement and sub-contracting of NHS healthcare services by public bodies are not included in any future trade arrangements with other countries.

In January, the HFMA backed moving ICSs to a statutory basis in its response to NHS England and NHS Improvement proposals on the development of the system-wide bodies. The association insisted, however, that allocation and governance arrangements should be fair, transparent and consistent.

Power of direction

The white paper said the health secretary would have a clear power of direction over NHS England, strengthening the minister’s ‘powers of intervention, oversight and direction’. The ‘hands-off’ role introduced in the 2012 act had not materialised, and it was appropriate to add a formal power of direction to informal working arrangements that have evolved over recent years.

‘This power will not allow secretary of state to direct local NHS organisations directly nor will it allow the secretary of state to intervene in individual clinical decisions,’ it added.

Health and social care secretary Matt Hancock (pictured above) said the government was delivering on NHS calls for better integration and less bureaucracy.

‘The proposals build on what the NHS has called for and will become the foundations for a health and care system that is more integrated, more innovative and responsive, and more ready to respond to the challenges of tomorrow, from health inequalities to our ageing population,’ he added.

NHS Providers chief executive Chris Hopson said the reforms were an opportunity to speed up integration, but ICS powers must not overlap with those of trusts and foundation trusts. He added: ‘There is a lot of detail to get right in what is now a wide-ranging bill. We are keen to understand the government's intentions on some of the new proposals it has added such as the new powers for the secretary of state to direct NHS England, transfer powers between arm’s length bodies and intervene in local reconfigurations.’

‘We will also want to discuss how quickly these changes can be implemented given the operational pressures the NHS is currently facing.’

King’s Fund chief executive Richard Murray (pictured) worried that the new ministerial powers ran contrary to the main thrust of the reforms – giving local health and care leaders the freedom to make decisions based on their population’s needs.

‘There is much to welcome in the ambition of the white paper, but the history of the NHS is littered with reform plans that overestimated benefits and underestimated disruption. These latest proposals add up to a major reform package and come at a time when the NHS, local authorities and charities are still battling Covid-19. In implementing these proposals, it will be essential to avoid distracting health and care services from dealing with the crisis at hand,’ he added.

The HFMA has produced a summary of the white paper, which is available to download here