Support for legislative proposals, but concern over centralisation

NHS England and NHS Improvement published proposals earlier in the year on legislative changes that would support the implementation of the NHS long-term plan. In its report, following an inquiry into these proposals, the influential committee of MPs backed changes that would give greater weight to collaboration as an organising principle for the NHS.

‘The current mechanisms for competition in the NHS continue to add costs and complexities in too many areas without corresponding benefit in return for patients and taxpayers,’ it said. Specifically, it supported proposals to: repeal section 75 of the Health and Social Care Act covering procurement rules; remove the Competition and Market Authority’s role on mergers of foundation trusts; and ensure commissioners had discretion over when to conduct a procurement process.

It also accepted proposals to allow greater flexibility locally over payment systems, with national prices published as a formula rather than a fixed value.

Committee chair Sarah Wollaston (pictured) described the proposals as pragmatic. ‘This report also represents cross-party endorsement of suggested changes and presents an opportunity to make integration easier, to encourage greater collaboration and reduce some of the burdens from competition rules,’ she said.

However, the committee also called for much greater detail about how aspects of the proposals would work. For example, in relation to deciding whether a procurement exercise was needed, it wanted to know more about how the proposed best value test for commissioners would operate and how value would be defined. ‘We support a test that embraces a broad definition of public and social value, but it is important that the design and implementation of this test does not create a more onerous set of arrangements than procurement rules currently pose,’ it said.

It also said that, while it supported greater flexibility to adjust tariff prices to reflect local needs, more information was needed on the formula that would be introduced. And it warned that local flexibility must not result in a race to the bottom, where providers compete on price at the expense of quality. And there was a danger that greater local flexibility could add complexity for large providers.

The committee also raised concerns about proposals around greater central control over mergers and capital spending.

NHS England and NHS Improvement had argued that foundation trusts’ current freedom to spend internally generated resources on capital could impede capital spending by NHS trusts. And there was a danger that departmental spending limits would be exceeded.

However, the committee highlighted providers’ counter argument that local bodies were best placed to take decisions about capital maintenance and investment. The real anomaly in the current system was the power over NHS trust capital investment, not the absence of that power for foundation trusts, providers had claimed.

Providers added that the capital model was flawed – both in terms of the overall spending limit and the mechanism for prioritising investment across organisations – but that the proposed legislative changes did not address these problems.

The committee said it did not support the proposals around mergers and capital spending ‘in their current form’. If legislation was drafted, it would expect to see details about the limited circumstances in which powers could be exercised and to see a focus on empowering local management of resources including capital.

The NHS Confederation described the targeted proposals as ‘sensible’ However it shared the committee’s concerns that the centre could become too powerful. ‘That is why we are pleased the MPs agree that the centre should not start to direct mergers, acquisitions and the capital spending limits of foundation trusts,’ said confederation chief executive Niall Dickson.

He added that the committee’s proposals did not deal with the ‘ambiguity and tension’ in the governance and accountability of local NHS organisations – with both organisational and system responsibilities. And he called for realism over what legislation could achieve.

‘[Trusts’ and CCGs’] ability to deliver greater collaboration will be down to relationships and leadership – and you cannot legislate for either of those,’ he said.