Commissioning - Health Committee Contents


The starting point of our inquiry has been our predecessors' findings on the significant shortcomings of the current arrangements for commissioning in the NHS. Like the previous Committee, we are motivated by the desire to deliver high quality care to patients and good value to the taxpayer; and we see the need for an effective instrument to drive innovation and quality if these objectives are to be met. It is from this perspective that we have sought to ask "How do we make commissioning effective?" and reached our conclusions about the Government's proposals.

We are mindful that the need to develop more effective NHS commissioning cannot be considered in isolation from the financial context in which the NHS now finds itself; the two issues are inevitably bound up inextricably with one another. The key priority facing the NHS in the immediate period ahead is the challenge first articulated by the NHS Chief Executive, Sir David Nicholson, in 2009 to achieve an efficiency gain of 4% per annum ("the Nicholson Challenge") from 2011-12 (also expressed as the need to make £15to 20 billion in efficiency savings). The Committee accepts that it follows from the unprecedented scale of the Nicholson Challenge, and the widespread recognition of the weakness of existing commissioning structures in the NHS, that action to enhance the effectiveness of NHS commissioning is essential if the NHS is to deliver the pace of change implicit in the Nicholson Challenge - and therefore in the Comprehensive Spending Review. It is against this immediate challenge that the Committee believes the White Paper process should be judged.

There was a significant policy shift between the Coalition Programme, published on 20 May 2010, and the White Paper, published on 12 July 2010. The Coalition Programme anticipated an evolution of existing institutions; the White Paper announced significant institutional upheaval. The Committee does not believe that this change of policy has yet been sufficiently explained given the costs and uncertainties generated by the process. The Committee broadly shares the Government's policy objectives so it therefore welcomes the fact that these are substantially unchanged. It does not believe however that the approach adopted by the Government represents the most efficient way of delivering those objectives. The failure to plan for the transition is a particular concern in the current financial context. The Nicholson Challenge was already a high-risk strategy and the White Paper increased the level of risk considerably without setting out a credible plan for mitigating that risk.

The Committee acknowledges the development of PCT clusters as a pragmatic response to the situation that developed following the publication of the White Paper We are concerned that the relatively protracted timescale is undermining the effectiveness of the NHS response to the Nicholson Challenge. The Committee believes it cannot be too often repeated that the commitment to generate 4% efficiency gains four years running is extremely challenging and it believes there must be a clear and effective management every step of the way if the NHS is to have a realistic chance of meeting the objectives it has been set.

We recommend that PCT clusters should be in place by 1 April 2011, in order to ensure that they are able to manage the delivery of the Nicholson Challenge effectively. The Committee believes it is important that clusters "own" the change process; as the focus for financial control, they should be responsible for the development of commissioning in their area.

The Government is due to publish its bill to enact the measures in the white paper shortly. In this report the Committee sets out the priorities which it hopes the Bill will address; in view of the importance which the Committee attaches to these priorities it intends to follow up this report with a further inquiry over the coming months as the Bill progresses through Parliament in order to make recommendations to the House about how these priorities can be most effectively delivered. Amongst these priorities are the following:

  • We think that it is unrealistic to imagine that the NHS will be able to operate effectively without some means of performance management. We heard in evidence that in those places where innovative practice has been introduced under the current structures the driving force making it work was usually an individual, or small group of individuals, with excellent management skills and the ability to motivate and organise others. Individuals of that kind are always in short supply, and increasing the number of bodies (in this case consortia) can only mean that talent is spread more thinly. The new NHS structure cannot be run on the basis that every Chief Executive is an exceptional individual. While the Committee recognizes that the traditional NHS culture has often been too centralized and bureaucratic, it believes there needs to be a system in place to address issues of underperformance - preferably on the basis of prevention rather than cure.
  • The role of Secretary of State for Health gives to the office-holder extensive powers of direction over the NHS. The White Paper proposes that the Secretary of State continue to have overall accountability for the NHS and that day-to-day operation of NHS commissioning will sit with autonomous commissioners and the NHS Commissioning Board. We therefore intend to review the arrangements proposed in the Bill for defining the lines of accountability between the NHS Commissioning Board, the Department of Health and the Secretary of State to prevent potential future conflicts arising.
  • We believe it is essential for clinical engagement in commissioning to draw from as wide a pool of practitioners as is possible in order to ensure that it delivers maximum benefits to patients. GPs have an essential role to play as the catalyst of this process, and under the terms of the Government's changes they , through the commissioning consortia, will have the statutory responsibility for commissioning. They should, however, be seen as generalists who draw on specialist knowledge when required, not as the ultimate arbiters of all commissioning decisions. The Committee therefore intends to review the arrangements proposed for integrating the full range of clinical expertise into the commissioning process.

  • Although the Committee understands the value of the separation of the commissioner and provider functions it believes it is important that this function separation is not allowed to obstruct the development of high quality and cost effective service solutions. We therefore intend to review the arrangements proposed in the Bill for reconciling these conflicts.
  • The commissioning of services that either work across social care and health boundaries, or are intimately linked is therefore an issue to which the Committee attaches great importance, and we intend to review the effectiveness of the structures proposed in the Bill which are designed to safeguard co-operative arrangements which already exist and promote the development of new ones.
  • There is a potential conflict between the principle of patient choice and the ability of commissioners to set priorities in the use of resources - particularly at a time when resource pressures within the NHS are bound to intensify. We intend to review the arrangements proposed in the Bill for enabling consortia to reconcile this potential conflict by enhancing patient choice at the same time as delivering the consortium's clinical and financial priorities.

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Prepared 18 January 2011