| Summary
NHS Primary Care Trusts (PCTs) were created in 2002, and are currently responsible for controlling some 80% of the NHS's £76 billion annual budget, which they use to commission health services for their local populations. In addition, they have responsibility for public health, and many PCTs also provide community-based health services, such as district nursing and community hospitals.
Commissioning a Patient-Led NHS was published on 28 July 2005. It set out proposals to dramatically reduce numbers of PCTs in order to achieve cost savings of £250 million and to improve commissioning. The paper also announced plans to contract out community health services currently provided by PCTs to non-NHS providers by the end of 2008. At the same time, the number of Strategic Health Authorities (SHAs) would also be substantially reduced.
These proposals were received with widespread alarm, and were described by commentators as 'incoherent'. Those working in the NHS expressed outrage at the prospect of a further large scale structural reorganisation only three years after PCTs were created in the last round of restructuring, as well as raising serious doubts as to whether the reforms would achieve their stated aims. Against this backdrop we decided to launch this inquiry.
The consultation process
Before examining the substance of the Government's proposals for changes to PCTs, we first addressed the fierce criticism attracted by the Government's consultation process, which was described by almost all our witnesses as insufficient and flawed. The NHS was allowed only 11 weeks to put together complex proposals for restructuring local health services. The short timescale was compounded by its inopportune timing at the beginning of the summer holidays. As a result, patients, local people, NHS staff, other NHS organisations, MPs, local councillors, and other key organisations have been unable to contribute meaningfully to the process.
Despite the Government's repeated reassurances, it is clear from our evidence that the consultation has been a 'top down' process: change has been imposed on local NHS organizations by central government for financial reasons and as a result solutions that would best meet local needs are being overruled because they do not yield the required savings.
The Secretary of State has promised that all proposals that have not been subject to extensive local consultation will be rejected. Our evidence indicates that insufficient consultation has taken place in several areas. To ensure that what remains of the consultation process in respect of changes to PCTs is as transparent as possible, offering a genuine choice about how local health services are structured, we have recommended that in statutory local consultations all SHA areas be obliged to consult on at least two options.
Contracting out PCTs' functions
Equally strong criticism was directed by our evidence at the announcement made in Commissioning a Patient-Led NHS that PCTs should divest themselves of their provider services. This is a major change in policy direction that must be the subject of full and open debate. One channel for such debate might have been the Government's consultation Your Health, Your Care, Your Say, which was launched in June to shape the Government's forthcoming White Paper on out-of-hospital care. However, the inclusion of far-reaching changes to PCT primary care provision, well in advance of the consultation's conclusion, makes a mockery of the consultative process.
In November, four months after the publication of Commissioning a Patient-Led NHS, the Government was still unable to clarify whether or not PCTs would eventually divest themselves of their provider functions; the Government's numerous announcements and subsequent retractions mean that it is still unclear what its policy is on the divestment of PCTs' provider services. This clumsy and cavalier approach to NHS staff has had a very damaging effect on staff morale.
There are also important concerns about the consequences of the divestment of PCT provider services. Should this go ahead, it could lead to the fragmentation of community services, and make joined-up care even harder to provide. Moreover, it is unclear whether sufficient alternative providers exist to provide a market in community services.
As well as plans to contract out PCTs' provider functions, during the course of this inquiry it emerged that proposals were also being made by one Strategic Health Authority to put Oxfordshire PCTs' commissioning functions out to tender. This raises crucial questions about accountability and transparency. Once again, a significant policy change has been proposed without consultation.
The status of both the divestment of provider services and the Oxfordshire proposals are now unclear following the outcry they engendered. If it is to pursue either of these policies, the Government must learn from the mistakes it has made with Commissioning a Patient-Led NHS and allow sufficient time and opportunity to consult on and debate fully its proposals, both nationally and locally.
Impact on day to day functions, including clinical services
It is clear that the impact of proposed reconfigurations on PCTs' day to day functions, including clinical services, will be substantial—it takes on average eighteen months for organisations to 'recover' after restructuring and to bring their performance back to its previous level. The restructuring of PCTs is likely to have significant effects on their ability to undertake their core functions, including commissioning services, providing community health services, and protecting public health. The destabilising effects are already becoming apparent: clinical staff are moving from PCTs to the acute sector because of uncertainty over their future roles. There are also well-founded concerns that patient care will suffer because of the proposed reforms.
After the immediate disruption of reorganisation, it is thought to take a further 18 months for the benefits to emerge—a total of three years from the initial reforms. Thus, just as the benefits of PCTs (established in 2002) are about to be realised, the Government has decided to restructure them. The cycle of perpetual change is ill-judged and not conducive to the successful provision and improvement of health services.
Impact on commissioning
According to the Government the main reason for the reforms is to strengthen PCTs' commissioning function. We strongly support this aim, but it is clear that improvements in commissioning should have been addressed before, or at least at the same time as powerful incentives were being introduced which strengthened the provider sector. The fact that it was not has given rise to an uneven balance of power in the NHS that may now prove difficult to redress.
The Government's reforms promise the increased bargaining power of larger organisations. Although they may lose links with departments of district councils such as housing, more of the new PCTs will be co-terminous with county council social service departments. However, such advantages have to be balanced against the loss of local engagement which smaller PCTs provide. The introduction of Practice Based Commissioning will make some amends—it may achieve local clinical engagement—but it will not provide adequate patient involvement.
The evidence suggests that the benefits of larger PCTs are far from certain, and will be offset by the disadvantage of the loss of a local focus for the NHS. Moreover, where there are advantages in becoming larger, PCTs are already capturing them through successful collaborative working with one another. Given this, we have recommended that the Government should allow PCTs to develop organically, enabling them to evolve into larger organisations where this clearly best meets local needs. This would avoid the hugely disruptive and costly impact of another root and branch reform of the NHS.
It is striking that, despite the considerable attention these proposals have attracted in Parliament and elsewhere, debate has focused almost exclusively on the shape of future organisations, the morale of staff, and the consultation process, largely ignoring the critical issue of how commissioning can actually be improved in the NHS. In order to improve commissioning, PCTs need better skills and better information systems. To this end, we have recommended that a central change agency should be established, enabling best practice to be shared more widely, and targeting specific support at developing commissioning in the poorest performing PCTs.
Impact on public health
Another crucial area which has been neglected in debate on changes to PCTs has been the potential impact of these changes on PCTs' vital public health role. We were very concerned to learn that, prior to the publication of Commissioning a Patient-Led NHS, there was no consultation with public health professionals about its potential impact on PCTs' crucial public health function at all. In order to safeguard local public health initiatives, we have recommended that, with Directors of Public Health, consultants in public health must be retained with current local responsibilities. Further to this, steps must be taken to provide continuing support to community health professionals who play an equally important part in securing public health improvements.
Financial impact
The Government has downplayed the financial motivation for its reforms, concentrating instead on its aim of strengthening commissioning. However, cost savings seem to have been the key consideration in the reconfiguration proposals, and plans which would better meet local needs have been discounted because they did not yield sufficient savings. Achieving savings is a very important aim but it should be stated explicitly so that it can be subject to proper scrutiny.
In fact, it is doubtful whether the reconfiguration will yield the £250m savings the Government is hoping for if the costs of restructuring including those incurred by redundancies and by establishing new structures to secure local engagement are taken into account. It is also doubtful whether it makes sense to reduce expenditure on PCTs rather than other parts of the NHS. PCTs are currently responsible for spending 80% of the NHS's £76 billion budget. At a time when PCTs' commissioning role is crucial to the success of the NHS, it is probably a false economy to deplete the NHS's managerial resources in an attempt to save only a fraction of that total amount. It is worth noting that only three years ago, when they were created, the Government thought PCTs good value for money.
Overall impact of restructuring
The Government is proposing another large-scale reorganisation of the NHS only three years after the last, in order to achieve cost savings and improved commissioning. However, while it is far from certain that either of these benefits will be realised, the research evidence is clear that this restructuring will set NHS organisations back by 18 months, with patient services likely to be affected in the interim.
We were told by a senior NHS official that there was no 'perfect size' for a commissioning organisation, and our evidence suggests that there is a trade off between larger PCTs, which may have greater bargaining power and co-terminosity with local authorities, and smaller PCTs, which can achieve better local involvement. However, it seems that current, smaller PCTs are already capturing some of the advantages of larger organisations through successful collaborative working with one another, without the need for disruptive organisational change.
Debate on the Government's proposed changes to PCTs has focused almost exclusively on the shape of future organisations and the divestment of PCTs' provider services, largely ignoring the critical issue of how commissioning can actually be improved in the NHS. Irrespective of their future size and number, in order to improve commissioning PCTs urgently need better skills and better information systems. To this end, we have recommended that rather than reconfiguring PCTs, which is unlikely of itself to bring about improvements, and which will be hugely disruptive, the Government should allow PCTs to develop organically, and adopt a managed approach to sharing best practice in commissioning, targeting specific support at improving commissioning in the poorest performing organisations.
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