NHS Policy Options

NHS SHA policy

This is a discussion paper, part of the process of formulating a policy position for the Association to present to the Labour Party.  It hasn’t been agreed by anyone, as it’s cobbled together from various suggestions by our members but we invite comments.


We start with the repeal of the Health and Social Care Act.  One way might be to introduce an “Owen” type Bill on day 1.  Consult on our 10 year plan whilst developing the necessary legislation to fully enact what we agree – bring in a Bill after year.

Almost certainly there will be no more money.  We should at least guarantee first 3 years of funding, then next 3 years etc.  to give longer term stability.  Should pledge to increase care funding if GDP growth exceeds defined level – guarantees share in prosperity before tax cuts etc.

No top down re-organisation.  Whole system top down change does not work and usually sets progress back 2 years.  Change will be permitted if agreed locally and there will be some migration of some staff (mostly on planning/commissioning side) into local authorities or from local authorities to NHS bodies.  Mergers and collaborative agreements will be allowed if agreed locally.

Consult and Plan

We should aim for a 10 year plan which takes us towards our vision for a single system single budget providing us whole person care.  The plan should be widely consulted upon and signed by all the key stakeholders (as with 2000 plan).  We must provide a stable system with stable funding and allow the NHS itself to plan on a longer term with 3 year funding settlements.

We have to be honest that change takes time, especially in a period of reduced funding.  Big ideas like care closer to home and integration need to be understood by the public and we have to be clear that they benefits patients generally but may not save money.

Part of the planning is to accept change costs and may require double running costs as for example community care capacity is built up so that after this is done we can reduce the number of acute beds.

Planning for Change

As we replace market mechanisms and top down imposition with local planning there is a need to build up the skills base. We should establish a formal planning framework, which can be adapted but not ignored by LAs, and ensure we have the staff within the system that have the necessary skills and knowledge – not go out to consultants every time.

It is likely that there will have to be changes in services and the role of the hospitals will change.  The role of GPs and the greater use of care at home (in various flavours) and of primary care venues rather than acute care will happen over time.  Until this is explained and accepted, there will continue to be protests and resistance.  Honesty, good information, an open and transparent approach, staff engagement and local leadership have to develop to make change through consensus.

Reconfiguration will remain controversial so it is imperative that there is a proper formal process allowing for proper engagement rather than tick box consultation and a recognition that some changes however important take time to progress.

Drivers for Change

The rise of importance of social media and information processing technologies potentially makes “voice” far more powerful than when some years ago it was decided that only competition had the power.  We must embrace this and ensure high quality (kite marked) information is made available so that shared decision making and community development can take their rightful place.

Use of social media transforms the potential for involvement, engagement and consultation and should be embraced not sidelined.  This is a huge step for many within the care workforce, at the delivery end, clinical interface and in management.

Secretary of State Role

The SoS will be accountable legally and politically for the provision of a comprehensive national service and what “comprehensive” means should be defined.  The SoS should have the power to intervene in any part of the NHS (including Foundation Trusts) if it is in the best interests of the NHS.  The key power is usually to remove Board (and governors).

The NHS as directed by the SoS must retain an overwhelming direct ownership of sufficient acute and other hospital estate that allows it to shape and change this part of the NHS – and the care system more broadly – by ownership / employer leverage alone (i.e. the use of service contractual tools will not be sufficient or doable).

We should move, over the longer term, to a similar position in respect of primary care services – either through increasing the numbers of directly employed (and housed) GPs – which is already happening in some parts of the country where the independent contractor model doesn’t work well – or through a much more rigorous “franchising” licence where the 4 primary contractor professions (where they still operate as independent businesses) have to meet new and clearer standards of service if they wish to retain the NHS brand and franchise.

In terms of the long stay sector, there is a case for the NHS to own a sufficient market share that is can shape the rest of the provision by its employment and care standards. I accept that this means it must provide exemplar services – and research and training.


Previous attempts at local representative bodies such as LiNKs have usually not done much good.  The lessons from the Community Health Councils (good and bad) should be understood.

  • The funding and management of CHCs was controlled at Regional level, insulating them from political pressure locally.
  • Their operation was very publicly transparent – all meetings were held in public.
  • They built up relations of trust with local staff and organisations, so benefited from a great deal of what would now be called whistleblowing. Staff would contact the CHC suggesting that they might like to visit a particular area of their hospital and telling them what they might like to look at.  As the CHC visited regularly this was quite safe for the staff.
  • The informal role taken by many CHCs in assisting complainants was helpful in alerting them to problem areas that needed investigation.
  • CHCs were stable organisations, with experienced staff who built up relationships of trust over long periods.  Since they were abolished the successor organisations have been transitory with short term funding and repeatedly reorganised.

This suggests that LHW must be adequately resourced, independent and of sufficient credibility that there can be good quality staff.  If a LHW has serious concerns it should be able to access support and assistance from specialists and experts at the national level.  LHW should provide a channel for confidential advice and support for “whistle-blowers”.  The controlling bodies of LHW should always have representatives from the third sector and from local workforce.

There remains an issue about how LHW can be seen to be accountable?

Public Health

The political narrative on public health and the NHS should centre on the health and well-being benefits of tackling social inequalities. This not some sort of naive successor to ‘Big Society’, but links to the practical vision of economic development with productive jobs, real innovation and locally-based investment.

We should support and strengthen the move of public health to local authorities. The key test of public health devolution will be ability of local authorities and local NHS to manage change, working across institutional boundaries. Public health funds need to continue to be ring-fenced, at least until the habits of collaboration are well bedded in.

Each Local Authority must have a qualified Director of Public Health reporting directly to the Chief Executive and with protection of the sort offered to Section 151 Officers.  They should be professionally responsible to the Chief Medical Officer who must also approve all appointments and terminations.

Hospitals are a public health resource, and the acute sector needs to use its power to pursue the public health agenda (eg tackling diet and smoking with patients and families alongside acute treatment).

CCGs with boundaries that do not correspond to the other agencies involved in public health are not sustainable. Uniting health and social care around the local authority platform will give planning for health real muscle.


The commitment to Agenda for Change and the national agreement on terms and conditions has to be supported. We should bring back the agreement that prevented two-tier workforce arrangements.  We should look to establishing some form of concordat or contract terms for private providers to the NHS to accept obligations around TU recognition and staff engagement, comparable terms and conditions, disclosure of information, training and development.

The social care workforce has to be dramatically unskilled, paid a living wage and put into structures where they get proper management, training and development.  Zero hours contracts should be banned and visit planning using 10 or 15 minute slots also banned.  The excellent Charter proposed by UNISON should be universally adopted.

The case for minimum staffing levels, especially as regards nurses, but also levels recommended by Royal Colleges for clinical safety is generally agreed, but how this should translate into regulation or perhaps just to management and monitoring has yet to be resolved.  There should however be clear guidance which is publicly available along with monitoring which is also publicly visible.

Whole Person Care

There is the start of a definition of what this means from the perspective of the recipient – you know what it is when you experience it.  This is adapted from the work done by National Voices:-

  • I know who is in charge of my care
  • I am involved in all discussions and decisions about me
  • My family and carer are also involved (so far as I want)
  • I have agreed a care plan which covers all my needs
  • I have one first point of contact and they know about me and my circumstances and help me access other services
  • I can see my records, decide who else can see them and I can make corrections
  • There are no big gaps between seeing people having tests and getting results
  • I always know what the next steps in my care are to be
  • I know that all those involved with my care talk to each other and work for me as a team
  • I get information at the right time and I can understand it, sometimes with some help
  • I am offered the chance to learn more and set goals to include in my plan
  • My plan is reviewed with me regularly and I am involved as much as I choose to be.

The suggestion is that something like this is set out in the NHS Constitution.

The major changes required to get to this kind of state are in the areas of clinical training, medical records, new tools and methods.

Social Care

Unless there are major increases in the level of funding for social care the system will continue to fail.  This has to overcome the “there is no more money” argument.  The Care and Support Bill has some good features but does not really address the key issues around funding.  Some of what we have argued for such as portable entitlements and a single assessment process and single national criteria look like being met.

We have argued that the direction of travel has to be for free personal social care based on needs assessment.  This has to be paid for out of general taxation initially out of capital taxes but in the longer term from income taxes – there ahs to be redistribution involved.

Some social care, such as for younger disabled people, should already be free.  Over time, as funding permits, the scope of who gets free care should expand.


Integrating the health and social care workforces faces huge problems, whether the LA or NHS is the employer.

Funding health care through local authorities

The suggestion is that integrated commissioning is undertaken by the local authority which looks across the whole public sector, care, housing, education and other services.  This is driven by the local strategic needs assessment and set out in a wellbeing strategy and commissioning policies, all of which are informed by public health and by CCGs.

The entitlement to free comprehensive health care is translated into a (national) set of approved treatments drugs and interventions which have been determined by NICE to be effective and VfM. Patients have a right to such care.

The commissioning of care services in terms of pathway design, service configuration and priorities and where applicable allocation of resources, payment of grants is delegated to the CCG.  This would include primary care services as the potential for conflicts of interest amongst GPs would be greatly reduced by changes to CCG governance rules. Some major decisions such as significant service closure or opening of major new facilities would have to be taken by LA.  Some sub regional working would be essential.

As a first step in what might be a long process the LAs should have the right to sign off CCG budgets and plans (not NHS England).  The LA could also require CCG to adhere to its overall strategy and abide by its commissioning policies.  Further developments would take place in different ways in different parts of the country and at a pace the localitry bwas happy with – not driven from top down.

A longer explanation of how this might be addressed is set out in Appendix A below.

Commissioning Competition and Contracting

Repeal of the Health and Social Care Act removes the regulated market and along with it the idea that NHS bodies compete for business and thus for funding like businesses. Some of the commissioning functions remain as described in Appendix B.

Over time the commissioning functions for healthcare and social care should be merged.

Despite years of commissioning the NHS is not yet able to deploy contracting tools that properly allow it to define what is it that it wishes the private sector to deliver where direct patient services are concerned. This must be addressed to build skills within the NHS not be employing management consultants.

We should move to the NHS as preferred provider.  Commissioners would regularly assess the performance of NHS providers and to be able to look at whether opportunities existed to improve or develop services. In general where an NHS body was not performing well enough then the initial response is to work with it to try for improvement not put it into a failure regime.  Whilst a market system requires failure our aim is to avoid it.  In a market system other NHS bodies would watch a competitor fail; in our system other providers would try and help.

When commissioners decided they wished to put a service out to Compulsory Competitive Tendering then of course they would have to follow the prescribed EU process. The result would be a legally binding contract enforceable through the courts.  The NHS commissioners must build a much better capacity to manage any such contracts effectively.

We should campaign for NHS to be exempted from US/EU agreement as we do not see healthcare as a market at all. It is a publicly provided service for reasons of social solidarity.

Under EU law (and our 2006 Act) public contracts over a certain size have to be subject to a CCT and an EU defined process and all have to meet requirement to be transparent and non discriminatory. There is a separation for health services (ie clinical) which can limit requirement for CTT, but the scope for this is being reduced under pending procurement directive. But EU does not force all health services to be put out to CTT as possibility of exemption is written into Treaties.

Under H&SC Act and S75 almost all contracts for NHS funded services have to be subject to CCT and to comply with EU procurement directives (OJEU etc), and the result is a legally binding contract. Any complaint would be via Monitor or through domestic courts looking at domestic law (H&SC Act). All “NHS” providers both NHS Trusts and Foundation Trusts are treated the same as private providers.

Our approach is that we start from an integrated NHS under a SoS where arrangements between commissioners and providers, both of which are within the NHS, would NOT be the subject of legally binding contracts but rather NHS Contracts. (This used to apply as between PCTs and NHS Trusts (not FTs).  As no contract exists there is no opening for contract law, competition law etc.

In general terms if an arrangement is made between one part of a public body and another then an established principle (Teckel) applies and no CCT is required. To cement this position FTs would have to lose some autonomy so they were ultimately under control of SoS not independent business entities, and we re-impose a cap etc to make the point they are part of NHS and expected to cooperate with other parts not compete with them.

Preferred provider would have to be described carefully but it is possible to achieve. If a commissioner decided they did want to go to CCT then they would have to abide by EU procurement directives (but the point is they cannot be forced into it).


There is no need for an economic regulator as the market system will have been abolished.  There remains a need for some form of registration and authorisation.

In general (and some disagree) we don’t think more regulation will avoid future problems, and the CQC is largely a waste of money.  Registering providers is worth doing, but the inspecting and monitoring regimes are pointless.  Ofsted style ratings and Chief Inspectors are meaningless gimmicks. We think local monitoring of standards based on much better transparency is a more productive way forward.  In particular we think Commissioners should take more responsibility for the quality of services they are paying for.  Local Healthwatch, like the CHC’s, should have a role in monitoring quality and carrying out unannounced visits.

LHW has the power to “enter and view” premises from which health and social care are provided if publicly funded.  This includes unannounced visits, so long as it doesn’t “compromise the effective provision of care services”.   Royal colleges are increasingly publishing quality standards, which set a benchmark- for example that acute medical units should have 12 hour 7 day consultant cover. These benchmarks are very useful for lay assessors. Lay people need some support in understanding what they are looking at, and if such standards are comprehensible they are useful for patients too.  But not everything is susceptible to lay inspection.  Peer review is also needed.  But the NHS should define and commission what minimum standard of service must be provided (eg on hip fracture, a theatre slot within 36 hours and ortho-geriatrician review as standard), and wherever possible in terms that patients can understand.  The most effective monitoring of services is that provided by the people at the receiving end.

Trusts and Foundation Trusts

We must either make Foundation Trusts work better or abolish them.  Abolition might be much pain for little gain.  An alternative is to make all trusts have the FT stakeholder governance structures.  We must remove the idea of autonomy by giving SoS power to intervene, and keep the NHS Trust Development Agency to performance manage Trusts but with mostly only a light touch (bit like Monitor used to use with FTs).  All FTs will have to have a PPI Cap set by governors and the SoS must agree to any major change in cap.  The SoS could intervene to assist a trust which get into difficulties – with or (without a defined failure regime) but the purpose is to avoid failure by drawing on skills and resources from within wider NHS.

FTs are to be portrayed as part of NHS and not as separate businesses.  The Competition Commission should be written out of the picture and agreements between FTs about improving service provision would be up to the parties involved with final approval required from Secretary of State (usually given).

Provider Integration

There are mixed views on the value of forming larger scale integrated providers.  Evidence ought to be gained through permitting local “experiments” with integrated providers of all shapes and sizes.  There should not be any forced mergers or acquisitions of NHS providers but local agreements should be permitted.

Having one provider, funded by a population based block amount, delivering all the care for a whole County or City needs to be tried and evaluated.  (Some of this is actually already being done!)

Whilst provider organisational merger is one route to integration (in this sense) other approaches such a lead contractor or network contracting, programme budgets should all be tried.  The system should permit different methods for achieving service integration rather than simply addressing it through merging organisations.

Private Finance Initiative

It will not be possible to renegotiate PFI deals, insofar as that can be done it has been.  If PFIs can be transferred to PropCo at no cost then they should be.  PropCo should take over the contract management and use its scale and expertise to ensure contract compliance.

Trusts should be charged a fair usage charge, as some variation of public dividend capital, using the same approach as has been adopted for a limited number of Trusts in difficulty.  The subsidy this implies should be met out of the top sliced national funds.

Future Capital Funding

It is unlikely that public capital funding will be available on any scale.

There should be no further PFI or PF2 deals but variations on P21 will be permitted for smaller scale works (<£50m).  No further LIFT schemes.

It is unclear how major capital schemes, say for a hospital rebuild could be financed.  Many suggestions have been made – borrowing from capital markets, raising local loans, using pension funds, using public loan board – but none have yet been developed into anything like a policy.

Appendix A Local Authorities Commissioning and Funding

At present funding flows to commissioners through formula established by NHS England and to providers through payment by results or through contracts.  The amount to be spent in total on healthcare and public health is set by government then allocated by NHS England to various national streams then to CCGs.  There is no democratic involvement of any kind in the decisions about allocating resources.

Convergence over time of HWB and CCG is the natural progression as was pointed out by Health Committee – to form Local Commissioning Authorities or something of that kind.

A possible alternative is that funding flows through LAs as does the funding for various other public sector services.  This has advantages.  First it brings in democracy ie the major decisions about funding and priorities are set by elected people. (But they have to ensure the comprehensive NHS is provided and meet all guidelines.)  Second it allows LAs to make bigger decisions across the whole of the public services – so they may invest in measures which reduce future demand for healthcare.  Third it should bring scale economies into commissioning.

Under this model funds are allocated to local authorities based on (weighted) population.  The LA makes the strategic allocations then delegates to the CCG the actual commissioning.

For CCGs there is a separation between the clinically critical tasks such as pathway design – but in some cases this can follow a national template.  They would also be involved in monitoring quality, agreeing standards, deciding on competing priorities and on how best to allocate scarce resources. But, as above, they have to ensure the comprehensive NHS is provided and entitlements to care are met.

This is like the BMA model for commissioning which leaves some commissioning functions like procurement, contract ,management, information processing in something like a shared service (to get economies of scale), where clinicians advised but did not manage or carry out all the processes.

Appendix B Commissioning

First there does need to be some agreement about what planning/commissioning involves.  For any efficient system there has to be some objective basis for service planning, priority setting, allocation of funds, performance management.  Hopefully this would be underpinned by good information and informed by local public and patient involvement.

These functions would be necessary in any system, and so would have to be paid for.

An estimate can be made of the cost of having the market over and above the cost that would have to be incurred just to carry out the necessary functions as above.  The market means that commissioners and providers are joined by enforceable contracts, some agreed after various forms of tendering.


In the system as at 2009/10 the main costs were not in provider organisations that typically would only employ 5 – 10 staff whose jobs were solely related to market activities such as invoicing, contract disputes, and transaction level financial analysis.  Most providers would accept that even now their information base around coding, activity based costing and service line accounting are still inadequate and if there were less “market” they would redeploy staff into these areas to improve internal management information.  Given 260 providers the staff savings would be from £50m to £100m pa including some additional costs which might be envisaged around legal and contractual advice.  No savings would be likely from estates or IT.

The 150 odd PCTs had a range of functions connected with commissioning and employed staff on many aspects of service design, monitoring, contract negotiation, and on a scale which did require some additional estate and IT.  There are also legal and other external costs involved in running procurement exercises.  There is much variation but something like 10 highly paid and 40 well paid staff can be assumed, on average, per PCT whose jobs depended on the “market”.  A staff cost saving of around £300m – £400m would be reasonable.  External costs might add £100m if competition and tendering took root.  There are costs in SHAs and also in the DH but not on anything like the same scale.

Since 2010 there has been a dramatic reduction in staff in PCTs and SHAs shifting to clusters and nothing much has happened so it appears the costs could have been reduced anyway.

So overall an end to the “market” might save between £500m and £750m.

A rise in the volume of market transactions and the number of contracts is inevitable under the H&SC Act but the extent is a matter for speculation – depending on enthusiasm of CCGs for abuse.  But as a reality check the allowance for all clinical commissioning groups in the new system is £25 per head which equates to about £1.25bn to which could be added a further £300m for specialist and other NCB led commissioning.  But as set out above not all the functions associated with “commissioning” disappear when there is no market – there is still activity outside the providers which must be carried out.  If we consider the function then assume a 50% split then the cost of the market in the new world would be of the order of £750m.

The calculations assume that it would be easy and cost free to identify the jobs and to make the job holders redundant and so to make the savings.  It is unlikely to be that simple.  So at best the savings from ending the market and ending the formal C/P split replacing it by a planning system would be likely to be around £500m – £750m at best.