Health and Social Care Bill

Memorandum submitted by Managers in Partnership (HS 103)

Managers in Partnership

1. Managers in Partnership (MiP) is the representative body for nearly 6,000 senior health service managers including over 200 chief executives working in all areas of healthcare.

1.2 It will fall to NHS managers to implement the proposed changes brought about by the Bill and to ensure a smooth transition, whilst at the same time maintaining service standards and delivering efficiency savings of up to £20billion by 2013/14. MiP members are therefore at the forefront of current health service delivery and commissioning and are very well placed to inform the debate on the impact of the proposed NHS reforms as set out in the Health and Social Care Bill.


2.1 The Health and Social Care Bill represents the biggest shake up of the NHS since its inception and we are very concerned not only by particular aspects of the reforms proposed but also the extremely swift pace of change proposed for their implementation, for example SHAs ending in 2012 a full twelve months before GP commissioning consortia are statutorily in place. There must be sufficient checks, locks and controls to ensure stability and an orderly, successful transition.

2.2 The ambitious reforms proposed in the Bill will founder without talented and skilled management to implement them. The retention of good managers is therefore extremely important at this time, however it is put at risk both by the Government’s negative rhetoric around NHS management and bureaucracy, and job losses which are already taking place at PCT level. The Government should adopt a more strategic approach to transition to ensure that vital resources are not wasted on needless staff reorganisation.

2.3 If possible, all the management needs of the GP consortia should be met from the population of existing managers, via transfer and not redundancy. While the Government appears to be moving in this direction (e.g. by stating its best estimate that 60% of current PCT and SHA will be employed in ‘the new system architecture’) many GPs still believe they will have full freedom of choice over staff and, furthermore, they will incur no liability for redundancy costs if they choose other options.

2.4 The NHS will need an effective strategic intermediate tier to operate after the abolition of SHAs: clarification of the remit, funding and staffing of ‘outposts’ of the National Commissioning Board referred to by David Nicholson at the Health and Social Care Bill Committee should be considered for inclusion on the face of the Bill.

2.5 There are some other parts of the Bill which particularly require further consideration and amendment:

· There is a lack of detail in the Bill about the corporate governance and management arrangements for GP commissioning consortia as well as the democratic legitimacy of Health and Wellbeing Boards

· An increased reliance upon competition to drive up standards in the NHS may have the unintended consequence of reducing quality. The introduction of competition also risks undermining the public service ethos of the NHS.


3.1 MiP has concerns about the accountability of commissioning consortia. Consortia have responsibility for writing their own constitution, to be approved solely by the NHS Commissioning Board (clause 21). With up to 500 local commissioning consortia to oversee, we have concerns that the Board will not be able to provide a suitable level of scrutiny over consortia.

3.2 Unlike almost all other corporate governance structures, commissioning consortia are not required to have a board with externally appointed non executive directors or to hold meetings in public. There is one reference – in schedule 2 clause 4 – to the need to make provision in the constitution for dealing with conflicts of interest but this is clearly not a sufficient level of accountability for organisations responsible for hundreds of millions of public money. The Bill should be more prescriptive on how the governance arrangements of commissioning consortia should be set up.

3.3 The relationship between GP consortia and local Health and Wellbeing Boards also fails to provide sufficient accountability. The consortia must only have "regard to" the local health and wellbeing strategy (clause 177) and it is only "a representative" (clause 178) rather than the accountable officer who must sit on each Health and Wellbeing Board. We also have concerns that Health and Wellbeing Boards are not fully democratically accountable, as it is only necessary for one councillor to sit on the board (clause 178). In order to have greater local authority involvement in the setting of the Health and Wellbeing Strategy, the Bill should include an obligation for greater representation of local authority councillors on the board.

3.4 All NHS staff, including managers and doctors, need to be held to account robustly but we have doubts whether Health and Wellbeing Boards will be sufficiently empowered and that the NHS Commissioning Board will be sufficiently well resourced. If the only proper oversight is to be exercised by the NHS Commissioning Board then this represents a significant centralisation, instead of the intended devolution, of powers.

3.5 The Bill also needs to address how to fill the vacuum left by the abolition of the SHAs. These are to close at the end of March 2012, a full year before the abolition of PCTs. The removal of the so-called strategic or intermediate tier has potentially serious consequences for how change is managed or to broker difficult situations, particularly in the hospital sector. Rather than orderly change with carefully managed strategic decisions, we fear an environment where highly controversial decisions are taken abruptly, with damaging political consequences locally. The NHS will need an effective strategic intermediate tier to operate after the abolition of SHAs and continue into the new system: clarification of the remit, funding and staffing of ‘outposts’ of the National Commissioning Board referred to by David Nicholson at the Health and Social Care Bill Committee should be considered for inclusion on the face of the Bill.


4.1 Clause 52 redefines the duties of Monitor, the first of which in future will be to "protect and protect the interests of people who use health care services" by "promoting competition". Whilst we recognise that competition can play a part in improving certain services, it is not the answer to driving efficiency in every service area, as many services cannot be priced up neatly or specified in fine contractual detail. The danger is that once a service is put to tender initially, EU legislation ensures that the commercialisation of that service will have to continue.

4.2 Clause 104 provides for competition by price in the provision of health services. This now requires amendment following various Government statements and the fact that NHS Chief Executive David Nicholson, said that price competition was "extremely dangerous" when he gave evidence to the Public Accounts Committee and has since written that "there is no question of introducing price competition". For the record we are of the view that price competition can risk engendering a reduction in care quality or reduced terms and conditions for staff, risks which are well recognised within the health sector.

4.3 Dr Laurence Buckman from the British Medical Association has identified how the "quality premium" under which GPs will receive increased pay through effective spending of NHS funds, may incentivise GPs to deny services to patients. We believe that another consequence of the premium would be to encourage GPs to favour lower priced and lower quality services in order to protect their salaries. We believe clause 23 subsection 223L "Payments in respect of performance" should be deleted or amended.

4.4 In addition to the promotion of competition by Monitor, the Bill also provides for further measures to increase competition in the NHS. In particular, clause 4 ensures the Secretary of State is required to "promote autonomy" amongst those providing health services, whilst clause 150 removes the cap on the amount of private income a trust can receive from private health care services and the quantity of these services that it provides. In such a market of competing health care providers where providers could fail and services be lost MiP has concerns about how availability of services for patients will be safeguarded.

4.4 We also have concerns that a rapid move towards marketisation of the NHS would have a damaging rather than beneficial effect upon good commissioning. As the King’s Fund’s Chris Ham stated in his evidence to the Public Bill Committee:

"commissioning health care well is really hard to do. You need as much management support as you can get, as much expert advice, as much patient and public involvement."

4.5 We believe that it is a huge risk to attempt radical reform of every part of the NHS whilst at the same time cutting the jobs of those managers with the necessary expertise. The Government should therefore relax its plans to reduce management costs by 46% during the course of the transition, or at least revisit plans in the light of an assessment of what management capacity is needed in the next two years. Meanwhile reform should be undertaken at a more cautious pace with greater inclusion of managers in the decision making process

March 2011