Commissioning - Health Committee Contents


133. In chapter four we outlined the weaknesses in commissioning. The Government is well aware of these weaknesses and in recent years has begun trying to address them. Its main attempts to do so have been through:

  • World Class Commissioning (WCC)
  • The Darzi Reforms (CQUIN, PROMs, Quality Accounts and Never Events)
  • Framework for External Support for Commissioning (FESC)

In this chapter we discuss these policies.

World Class Commissioning

134. In 2007 the Government introduced its World Class Commissioning (WCC) initiative, which seeks to make commissioning more professional and improve the competencies of NHS commissioners. Its very existence is an admission that commissioning has been a weak link in the English NHS and a great deal rides on its success.

135. The WCC programme includes four strands:

  • A vision for World Class Commissioning;
  • Eleven Organisational competencies;[158]
  • An assurance system to hold commissioners to account and reward performance and development;
  • Support and development tools.[159]

136. The WCC vision and competencies are supported by a commissioning assurance system which is an annual process that reviews PCTs' progress towards achieving better health outcomes for their populations and provides a common basis for agreeing further development.

137. Mark Britnell, the architect of WCC at the Department, explained:

    I wanted to create something which had the discipline and rigour of the foundation [trust] assessment exercise and the stretch that gave people the ambition to raise their sights [...] we defined these 11 competencies—which I do not think anybody really disagreed with. It might strike you as slightly odd—it did me coming into the department—that no-one had defined what good commissioning was in 20 or 30 years.[160]

138. The first year assurance results were published in March 2009. At the end of WCC assurance Year 2 (July 2010), nationally calibrated PCT results will be published by the DH. As we have already noted, the process has uncovered weaknesses, particularly in the commercial aspects of commissioning.[161]

139. WCC will require a very significant change for most PCTs. Many of the aspirations of WCC are supposed to have applied to the NHS over the last 20 years, but few have been achieved systematically throughout the NHS in England.[162] The Minister of State acknowledged the programme's importance:

    we need to increase the power of the purchaser so that the purchaser is better able to represent the taxpayer and the patient, and better able to manage the way in which NHS funding is spent, and better able to counterbalance the provider interest in this equation. All of that is around improving the quality of commissioning—and that is why World Class Commissioning as a process is so important.[163]

140. While, as we have seen, the first year assessment exercise demonstrated the weaknesses in the system, in subsequent years PCTs are expected to progress rapidly. DH officials told us that they were in a more decisive phase with serious action being taken against PCTs who have not improved enough.[164]

141. The WCC initiative was widely welcomed and seen as helping PCTs to focus their minds on what needed to be done. The Chief Executive of Northamptonshire PCT found it helpful to show him where he needed to be going.[165] Monitor argued that WCC fits well with commissioning for quality.[166]

142. However, concerns were raised by Monitor and others. The Royal College of Midwives stressed that the developments of commissioning were very recent and there was a lot of ground for commissioning bodies to make up. It was too early to judge whether it will be successful or not:

    These developments are however recent, especially when compared with the developments on the provider side. This means that commissioning organisations are now playing catch-up and it will take some time before all the benefits associated with the recent reforms become apparent. [167]

143. The key question is whether WCC will be enough to address the enduring weakness of commissioning. Although WCC seeks to bring about a "step change" in the capacity and capability of PCTs to act as effective commissioners, some witnesses thought that the enduring weakness of commissioning was unlikely to be addressed by WCC alone.[168]

144. Health Mandate drew attention to the fact that approximately a third of PCTs have opted to focus on more "indicators" where their performance is already better than the national average than where it is worse. This calls into question the extent of the ambition of some PCTs and casts doubt on whether the WCC agenda will in itself address inequalities of performance.[169] This would imply that PCTs are "gaming" the assurance system.

145. There are further concerns about the assurance process itself. Professor Ham stressed that better outcomes of care and better value for money were not inherent in the assurance process, and thus queried whether assurance was asking the right questions.[170]

146. The Royal College of General Practitioners felt that WCC needs to be properly scrutinised by Strategic Health Authorities (who have a performance management role in respect of PCTs), otherwise it risks being "a paper-based exercise".[171] The results of the NAO survey suggested that PCTs were concerned that the assurance process could become a "tick box" exercise, taking a long time to complete and distracting staff from their core jobs.[172] Survey respondents also raised concerns about the balance between the assurance programme and the development programme within WCC.

147. The King's Fund also made the really important point that even if WCC is successful it leaves unaddressed the incoherence in system reform, as we discussed in the previous chapter:

    It is not that the policies themselves do not "fit" with WCC. But rather that the structures and mechanisms within which they are operating are working against the aspirations of WCC.[173]

148. Ridiculous though the term is, much of the World Class Commissioning initiative is unexceptionable. It is clearly too early to judge the success of WCC but note there are serious concerns about the capability of PCTs to make the huge step changes required. We recommend that the Care Quality Commission uses the eleven competencies of World Class Commissioning to judge PCTs.

149. We are concerned that PCTs might be too complacent to make the necessary improvements. A survey we commissioned from the NAO revealed a remarkable degree of misplaced confidence on the part of PCTs about how well they think they are doing.

150. It is not clear to us that WCC is going to address the lack of capacity and skills at PCT level and weak clinical knowledge. Furthermore there are concerns that WCC will be no more than a "box ticking" exercise whereby people expend a lot of energy merely demonstrating they have the right policies in place, rather than actually transforming patient outcomes and cost effectiveness.

151. WCC does not address the systemic imbalance of power between commissioners and providers. The DH has developed other policies that do seek to address this, to which we now turn.

Darzi Reforms

152. Lord Darzi was commissioned by the previous Secretary of State to undertake the Next Stage Review. He published his final report, High Quality Care for All, in 2008.[174] As part of his aspiration to bring about better quality of care he proposed giving PCTs a number of means whereby they could more effectively exert pressure on providers to improve their services. These are forms of "pay for performance" (P4P) or "value-based purchasing", an idea which has been developed in the USA. We examine these below.


153. The Commissioning for Quality and Innovation (CQUIN) framework, which was launched in April 2009, facilitates providing financial incentives payments for good quality care. The Minister of State told the Committee:

    CQUIN is going to be increasingly important, particularly to encourage stretch and innovation. It will give a greater degree of negotiating power to PCTs.[175]

154. However, the Committee received evidence of concerns. Professors Bloor and Maynard have argued that it is not yet clear whether incentive schemes will result in improved patient outcomes and justify the cost of implementing them. Evidence for US incentive schemes is weak and the impact of the new scheme in the English NHS is not predictable:

    Experience from the US suggests that a balance needs to be struck between the motivational effects of potential penalties and the possible costs of destabilising organisations. In addition, if penalties are a real possibility and are on occasion levied, their motivational effects are likely to be short lived.[176]

155. Witnesses also expressed concerned that CQUIN would destabilise providers if it were successful, particularly as from 2011 the potential income losses will be 10% of revenue. Mr Parkes told us:

    I just think that there is 1.5% in CQUIN and an expectation of 3.5% efficiency. We just need to be careful that we are not destabilising our providers but getting the right focus on improving quality.[177]

156. It was also thought CQUIN could lead to the worst of all worlds, increasing tensions between commissioners and providers while achieving little. Professor Bevan told us:

    There obviously is a conflict here between paying primary care trusts a fair share of the NHS budget for their population and paying providers for the volume of services that they supply. There is no guarantee, of course, that these two will equate, and as we are entering very hard times in the NHS, it is difficult to see how these tensions will be resolved. If you look at the evidence on pay for performance, which is very fashionable in the United States, there is very weak evidence of it having been an effective innovation.[178]

157. Despite the misgivings that some people have about CQUIN, it is regarded by others as having significant potential to improve commissioning. When we considered the Next Stage Review we supported using financial incentives to improve quality but recommended that the Department "proceed with caution", piloting and rigorously evaluating all such schemes before their adoption by the wider NHS.[179]

158. The Government stated in its response to our report on patient safety:

    The CQUIN framework was launched in April 2009. Although it is not being formally piloted, the first year is very much regarded as developmental and the Department is working closely with NHS partners to share learning and to inform how the framework develops in future.[180]

It transpires that evaluation will be very difficult because the DH has allowed for local variation in the implementation of CQUIN. As we stressed in our report on health inequalities, evaluation of policy is of the utmost performance.[181]


159. CQUIN requires information about quality and since 1 April 2009 the NHS has become the first healthcare system in the world to routinely collect patient-reported outcome measures (PROMs). Hospitals are obliged to measure the physical and psychological well-being of patients before and after four elective procedures: hip and knee replacements, varicose veins and hernia repairs. The resulting data are to be published on the NHS Choices website and in Quality Accounts (which we discuss further below).

160. The potential impact of PROMs is profound for patients and the public, as they offer a quantified measure of both the generic and disease-specific quality of care that patients receive from the NHS. Patients will have a measure of quality to help them make properly informed decisions when exercising their right to choose, and PCTs will have the sort of information they need to identify the best-performing providers and exert evidence-based pressure on those who are underperforming.

161. A number of threats to the success of PROMs have been identified.[182] A crucial issue is the adequacy of the response rate. Work by the London School of Hygiene and Tropical Medicine found a response rate of at least 80% was needed which may be difficult given that patient compliance is voluntary.[183] Another problem is that of adjusting PROMs for the longer term benefits of interventions. Someone who has just undergone a hernia operation is likely to suffer significant pain immediately after the procedure, having previously had no pain; but this is not necessarily a sign of failure as the operation will have removed the risk of strangulation of the hernia.


162. Another way of collecting information about the quality of care is Quality Accounts. This is an annual report to the public about the quality of services delivered, which all providers of NHS healthcare services should produce. The Health Act 2009, which comes into force on April 1st 2010, makes this a legal obligation for all providers of acute, mental health, learning disability and ambulance services to produce a Quality Account. Further work is underway to develop Quality Accounts for primary care and community services providers with the aim of making these obligatory by June 2011.

163. The regulations require providers to submit a list of the national clinical audits[184] and national confidential enquiries[185] that they participated in and a description of the action that the provider intends to take to improve the quality of healthcare following a review of the reports.


164. Never Events are adverse events that are both serious and largely, or entirely, preventable. The current list, compiled by the National Patient Safety Agency, is very conservative, i.e. the events are extremely serious and clear-cut lapses in patient safety, such as leaving an instrument in a patient or wrong site surgery.[186]

165. We noted in our report on patient safety in 2009 that the DH had not yet come to a settled view about whether Never Events would be linked to payment, i.e. whether commissioners would be able to withhold payment from providers where these events occurred.[187] Lord Darzi himself noted misgivings about this idea, with some fearing that it could suppress reporting of adverse events, running counter to the NHS policy of fostering an open, reporting and learning culture.[188]

166. In our report on patient safety we supported the use of Never Events but said we had "doubts about whether they should involve a financial penalty", recommending that this be the subject of a pilot project.[189] The Government noted this but did not respond directly to it.[190]

167. The Government believes that CQUIN, PROMs, Quality Accounts and Never Events will improve commissioning, shifting power away from providers and enhancing the quality of care. However, we remain concerned that the Government is not piloting and rigorously evaluating these ideas before implementation, as we have previously said. The Government's list of Never Events is too conservative.

Framework for External Support for Commissioning (FESC)

168. The Framework for Procuring External Support for Commissioners (FESC) is an initiative that the Government has undertaken with the stated purpose of helping overcome the lack of skills in PCTs. The services of 14 private sector companies have been procured centrally by the DH and PCTs can call on these for support with commissioning.[191] This is a way for PCTs to purchase additional skills in services such as data analysis and contract management. While each company has been appointed to FESC by the DH it is down to individual PCTs to decide if they wish to engage one of them, and what areas they specifically want to commission them to help with. The PCTs remain the commissioners of local healthcare.

169. In early 2009 the King's Fund conducted a survey of PCTs in England, examining the use of external support for commissioning and eliciting views on world class commissioning.[192] The survey revealed PCTs are increasingly turning to external organisations, and the private sector in particular, in the attempt to improve the quality of commissioning.

170. Although using external support is a relatively recent phenomenon, as many as 76% of PCTs who responded said they were doing so. The value of these contracts ranged from several thousand pounds for short-term consultancy work, to several million pounds in the case of more ambitious schemes. These contracts are mainly with private sector organisations (40%) or freelance consultants (30%).

171. FESC provides one route through which commissioners can engage the support of external organisations. However, the majority of PCTs in the King's Fund survey opted to use other channels for procurement—only 27% of PCTs using external support did so through FESC. Responses indicate that many PCTs consider FESC to be "inflexible", "too time-consuming", "cumbersome", and inappropriate for shorter-term work.

172. The FESC framework was designed, in part, to provide a route through which commissioners could use longer-term outsourcing. However, the King's Fund survey shows there is little enthusiasm for this. Instead, PCTs are using external support as a means of boosting their commissioning capacity and building up in-house skills. External support is being used across all stages of the commissioning function, and in particular for the purposes of developing a strategic commissioning plan, creating and managing contracts with providers, and reviewing gaps in current service portfolios.

173. There are seemingly two reasons why PCTs might bring in consultants.[193] One is that PCT staff themselves lack skills (capacity), the other is that staff lack the necessary skills (capability). Using consultants to supplement capacity raises the question why PCTs are not properly staffed; bringing in consultants would seem to be an expensive way of boosting staff numbers. BUPA, one of the FESC providers, told us that it did bring in important skills which PCTs lacked. Their submission highlights the need for more emphasis on data analysis and information acquisition to give managers the tools they need to manage demand more effectively.[194] However, UNISON raised concern that the skills being purchased from external consultants were not being transferred to PCT staff:

    The idea is that once companies have been brought in to advise commissioners they should ensure that there is a transfer of skills back to the NHS, but it remains doubtful that this is taking place or will do so in the future.[195]

174. When we tried to find out the overall cost of FESC, we were initially told the DH could not give us precise figures of what is spent on external consultants.[196] Although they subsequently provided the committee with some data that showed that in January 2010 there were £49.9m worth of signed FESC contracts.[197] But this does not equal the total amount spent on external consultants, as PCTs are not obliged to use FESC contractors and King's Fund research indicated that often consultants not on the FESC list were employed.[198]

175. The Minister for State in oral evidence raised concerns about the expenditure on external consultants:

    It is obvious that PCTs should be good at this stuff, but making them good at this stuff is much more difficult. I am concerned about the expenditure on management consultants by PCTs. Frankly, some of it is senior mangers covering their backs. They get in, they have to make a difficult decision, and rather than make it, as they are paid to do, some of them are getting in some management consultants to look at it, paying these management consultants a lot of money, in order to protect the chief executive's back. That should not be happening.[199]

The Department has told us that it accepts the need to collect and publish data on NHS expenditure on management consultants and will be making this available with effect from a financial return for 2009-10.[200]

176. PCTs clearly do lack the skills that they need for commissioning and engaging consultants is one way of helping to address this situation. However, we are concerned that FESC is an expensive way of addressing PCTs' shortcomings. The Minister of State himself expressed concern about the extent to which consultants are being used. The Department must do more to determine whether or not the taxpayer is getting real value for money out of this costly exercise.

177. Whatever the possible benefits of using consultants, we doubt the ability of PCTs to use consultants effectively.

158   The competences are:

1) Locally lead the NHS

2) Work with community partners

3) Engage with public and patients

4) Collaborate with clinicians

5) Manage knowledge and assess needs

6) Prioritise investment

7) Stimulate the market

8) Promote improvement and innovation

9) Secure procurement skills

10) Manage the local health system

11) Make sound financial investments Back

159 Back

160   Q 83 Back

161   Ev 251 Back

162   Ev 335 Back

163   Q 582 Back

164   Q 602 Back

165   Q 390 Back

166   Ev 236 Back

167   Ev 52 Back

168   Ev 77, Ev 99, Ev 123, Ev 132, Ev 159, Ev 166, Ev 192, Ev 228 and Ev 283 Back

169   Ev 80 Back

170   Q 522 Back

171   Ev 283 Back

172   COM 119 Back

173   Ev 252 Back

174   Department of Health, High Quality for All: NHS Next Stage Review, 2008 Back

175   Q 587 Back

176   Alan Maynard and Karen Bloor. Will financial incentives and penalties improve hospital care? BMJ 2010;340:c88 Back

177   Q 379 Back

178   Q 34 Back

179   HC (2008-09) 53-1, para 86 Back

180   Cm 7709, October 2009 Back

181   Health Committee, Third Report of Session 2008-09, Health Inequalities, HC 286-1 Back

182   Maynard, A and Bloor K. Patient Reported Outcome Measurement: learning to walk before we can run. J R Soc Med 2010: 103: 1-4 Back

183   John Browne et al, "Patient Reported Outcome Measures (PROMs) in Elective Surgery": Report to the Department of Health. London School of Hygiene and Tropical Medicine (2007) Back

184   National Clinical Audits are intended to engage clinicians in systematically evaluating their clinical practice against benchmark standards, to support and encourage improved quality.  Back

185   National Confidential Enquiries take anonymised information about deaths relating to a particular condition or aspect of healthcare and analyse it to produce recommendations for improved practice.  Back

186   Department of Health, Operating Framework for the NHS in England, 2010-11. From April 2010 no payment will be made were treatment results in one of the following 7 never events:

1) Wrong site surgery;

2) Retained instrument post-operation;

3) Wrong route of administration of chemotherapy;

4) Misplaced naso- or orogastric tube not detected prior to use;

5) Inpatient suicide by use of non-collapsible rails;

6) In-hospital maternal death from post-partum haemorrhage after elective caesarean section; and

7) Intravenous administration of mis-selected concentrated potassium chloride Back

187   Health Committee, Sixth Report of Session 2008-09, Patient Safety, HC 151-1 Back

188   Ibid., para 212 Back

189   Ibid., para 256 Back

190   Department of Health, The Government Response to the Health Select Committee Report "Patient Safety", Cm 7709, p 26 Back

191   Department of Health, Framework for Procuring External Support for Commissioners (FESC), February 2007 Back

192   The King's Fund, Building 'world class commissioning': What role can external organisations play? Results from a survey of PCTs, 2009  Back

193   Q 396 Back

194   Ev 189 Back

195   Ev 104 Back

196   Q 139 Back

197   UNISON (Ev 104) cites HC Deb, 15 July 2009, Col 545W that £15 million had been spent on FESC Back

198   The King's Fund, Building 'world class commissioning': What role can external organisations play? Results from a survey of PCTs, 2009  Back

199   Q 589 Back

200   Department of Health, The Government's Response to the Health Select Committee's report on The use of management consultants in the NHS and the Department of Health, Cm 7683, October 2009, p 2 Back

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