Devolution bill poses a serious threat to the NHS


The penny is beginning to drop within the NHS world at last. The seemingly marginal cities and local government devolution bill, now in its Commons committee stage, has major implications for the NHS that have been little discussed and barely comprehended. It all began with Greater Manchester combined authority securing control of its £6bn NHS budget earlier this year, and now several other devolution bids to the Treasury are seeking some NHS remit.

The problem here is not so much that the idea is necessarily wrong in principle, but rather that it hasn’t been thought through. Regions seeking such powers need to meet the Treasury’s requirement of securing “a financially sustainable health and social care system” by 2020. Typically they will claim to be able to do so by developing community-based models of care that focus on preventing expensive hospital treatment. In reality there is little evidence to suggest this model will work.

This is partly due to the public spending cuts that particularly affect local government and which hugely outweigh any likely efficiency savings, but it is also down to the misplaced ambitions associated with such programmes. As with all bidding procedures, the temptation is to boast first and retreat later in the face of reality – this has been the fate of the Better Care Fund and will probably also apply to the much-touted Vanguard schemes. North-west London, for example, already has a programme not dissimilar to that of Greater Manchester, and a recent evaluation of progress reports high costs and little evidence thus far of service change. Devolution bids promising “service transformation” are likely to suffer a similar fate.

But this is not the end of it. Beyond the devolution submissions to the Treasury there is the devolution bill itself. Although this is primarily about local government, it has three significant implications for the NHS that have the potential to destabilise the post-war consensus of a nationally-run, nationally-funded service. First there is the potential transfer of functions – clauses eight and 17 provide for the dissolution of NHS bodies and the transfer of their functions and assets to local authorities or combined authorities. Moreover, such transfers will, where made, be through affirmative order with relatively limited scope for MPs to debate and with no option to amend. The implications of such a potentially momentous change have been the subject of no public debate.

Second, it is not clear where the future balance might lie between national and local determination of health priorities and requirements. What will be the position on, for example, national requirements to consult on changes to, and closure of, services? Would local government be free to use currently ringfenced NHS monies to plug gaps in their other services? How will the health secretary be able to have a line of accountability to combined authorities that fall under a different department of state? To what extent will combined authorities have to meet national healthcare standards? Again, these potentially major shifts are taking shape without the benefit of any apparent forethought.

Finally there is the question of funding. Currently if an NHS provider (or commissioner) goes into deficit there is an assumption that the health secretary will cover costs to ensure service continuity, then argue later about the terms of any possible recovery. Local authorities, on the other hand, live under a much harsher financial regime, having to set balanced budgets with no scope for running a deficit. It is not clear which financial convention will apply where the NHS budget is in the hands of combined authorities, and again no debate has preceded the publication of the devolution bill. Local authorities will surely recoil from the prospect of being handed a fixed healthcare budget with no scope for running a deficit.

There was a time when major constitutional shifts were thought through – green papers, white papers, maybe even a royal commission to sift evidence and take opinion. Now we are seemingly in a political age where decisions on such matters are made for reasons of short-term political expediency – holding an EU referendum, English votes for English laws and possible House of Lords reform are all examples. Now it’s English devolution.

The Institute for Government has defined “successful policies” as

... ones which achieve or exceed their initial goals in such a way that they become embedded; able to survive a change of government; represent a starting point for subsequent policy development or remove the issue from the immediate policy agenda.

On this measure, the proposals for English devolution fare badly. They are unlikely to become embedded, unlikely to survive a change of government and unlikely to remove the issue from the immediate policy agenda. At best they constitute a starting point – and a poor one at that – for subsequent policy development.

This article first appeared in the Guardian