Legislative changes to help implement the NHS Long Term Plan

Last week brought the publication of the House of Commons' Health and Social Care Committee's thoughtful report on NHS England's proposals for legislative changes to help implement the NHS Long-term Plan. Below are our notes on how the Committee marked NHS England's homework, but if you would prefer to read all 59 pages of the report it is here.

Competition

Green light: Proposal to promote collaboration not competition, especially the proposal to repeal section 75 of the Health and Social Care Act 2012 and revoke the regulations made under it

But: Government to look at whether the proposed legislation would have the effect of deregulating competition in the NHS.

Competition and Markets Authority

Green light: Proposal to remove the need for NHS Improvement to refer objections on the national tariff and provider licence conditions to the Competition and Markets Authority.

But: Department of Health and Social Care, NHS England and NHS Improvement to build in a mechanism for independent adjudication of challenges to these decisions.

Green light: Removing CMA’s NHS specific role in overseeing mergers involving foundation trusts.

But: DHSC, NHSE and NHSI to seek legal advice on the changes that will be required to remove foundation trusts from the CMA’s jurisdiction and the implications of doing so, such that foundations trusts are no longer considered enterprises within the Enterprise Act.

National Tariff

Green light: greater local flexibility in the use of the national tariff system (help commissioners and providers to remove perverse incentives, especially in managing patients with multiple long-term conditions).

But: DHSC, NHSE/I to look at how they plan to avoid and/or mitigate the concern that these changes could result in price competition.

Procurement

Green light: proposals that commissioners can exercise discretion over when to conduct a procurement process (because of the complexities and costs this has added to the procurement process in the mental health and community services arena, for example).

But: the proposal to take it out of the Public Contract Regulations 2015 may well face legal difficulties. NHSE/I and DHSC need to explore that in detail and be clear about the law, including EU law. In the meantime, the Committee recommend that they should explore whether there are more flexibilities within PCR 2015 than are currently being used.

Best value test

Green light: DHSC, NHSE/I work with NHS Assembly to co-produce a ‘best value’ test.

Patient choice

Green light: strengthen patient choice but accept that geography plays an important role – the suggestion is that encouraging collaboration between providers is a possible way forward.

But: recommend that an appeal mechanism is preserved, within an independent body, for patients who believe that they have been denied choice.

Integrating care provision

Green light: Work is required by the National Implementation Plan/framework to include proposals to increase the uptake of existing contractual options and/or further extend the ways organisations can work collaboratively. The Committee’s view is that there already exists contractual and service options permissible within existing legislation to help remove or reduce the barriers to integration.

Integrated care provider contract

Green light: assurances from NHSE/I that holders of ICP contract are expected to be public statutory providers, but with the ability to sub-contract with a wide variety of partners. The recommendation is that legislation should rule out the option of non-statutory providers holding an ICP contract: “doing so would allay fears that ICP contracts provide a vehicle for extending the scope of privatisation”.

But: the Committee recognises that legislation may not be brought before the House of Commons for some time – so, until legislation is passed, the Committee suggest that ICP contracts should be piloted only in a small number of local areas and subject to careful evaluation and that they should not be not held by non-statutory providers.

Creation of new NHS trusts

Green light: Secretary of State to be given powers to create a new NHS trust to deliver integrated care in an area. This change to the legislation will extend the ways in which CCGs can integrate health and social care.

But: SoS must not be allowed to exercise this power without a request from the local CCGs and the request to the SoS must follow an assessment and public consultation to ensure the creation of a new NHS trust is in the best interests of patients and the local population, and represent an efficient use of public money.

VAT rules

Green light: Government’s forthcoming review of VAT exemptions on central government should also make recommendations for how VAT exemptions covering the NHS and local government can be protected and/or extended so as to ensure neither body is worse off as a result of integration.

On Integrated care systems

Governance and accountability: National Implementation Plan due in this autumn should set directions for the standards of governance and transparency local systems should demonstrate.

Joint committees: law should change to enable CCGs and NHS providers to establish joint committees, and proposals should be developed that enable local authorities to participate as equal partners in joint committees with CCGs and NHS providers.

Triple aim: there is support for the introduction of a shared duty that requires CCGs and NHS providers to support the “triple aim”; in addition, there is support for rephrasing it to include a specific a reference to wellbeing.

Barriers to system-working: mergers and acquisitions and capital spending limits

Red light: The Committee does not support the proposals in their current form.

But: The Committee’s view is that future proposals need to focus on (a) removing barriers to integrated care and (b) empowering and encouraging local systems to resolve disputes over configuration of services and the management of resources, including capital resources, themselves (paragraph 129 of the report).

Comment

The Committee's view that ICP contracts should not be awarded to private sector contractors is likely to be shared by politicians and also by NHS England, both for the reason given (perception of privatisation) and because they will be holding so much public money. You may recall that CCGs were not originally going to be public bodies but politicians (and the Treasury) hated that idea. What these proposals are trying to achieve in part, we think, is to take the market out of the NHS. If you can achieve that, then "problems" like procurement and merger control that get in the way of change cease to be an issue. This was echoed in evidence given to the Committee that the NHS could be taken out of procurement legislation if we moved to a more managed system (as in Wales or Scotland). If that is what NHS England has in mind, then the Committee's negative views on NHS England's proposed new controls over foundation trusts will be unwelcome.  

By contrast, NHS Providers was quick to endorse the Committee's stance, with its Chief Executive Chris Hopson quoted as saying:

“We fully agree with the caution the committee has sounded over proposals to give NHS Improvement the ability to direct foundation trust mergers, acquisitions and capital spending limits. The assumption of such central powers would fundamentally cut across the autonomy and accountability of a trust board which is best placed to make local decisions over the care they deliver and the investments needed for their patients and service users."  

The next big challenge for these proposals will be to get them to the top of the Government's agenda, which may be tricky at the moment...

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