Commissioning - Health Committee Contents

Conclusions and recommendations

Current weaknesses in NHS Commissioning

1.  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. (Paragraph 22)

The White Paper proposals

2.  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. (Paragraph 31)

3.  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. (Paragraph 36)

4.  At a time when the primacy of the Nicholson Challenge should have focused the minds of NHS senior management on the need to secure unprecedented efficiency gains, we have been presented with evidence of widespread uncertainty about the Government's intentions. In addition to its inevitable effect on management morale, the Committee believes this will have had the effect of blunting the ability of the NHS to respond to the Nicholson Challenge (Paragraph 42)

5.  In the Committee's view the policy described in the White Paper introduces significant institutional upheaval into the NHS, without significantly changing its policy objectives. The Committee broadly shares the 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. (Paragraph 43)

6.  Like most observers, the Committee was surprised by the change of approach between the Coalition Programme and the White Paper. The White Paper proposes a disruptive reorganisation of the institutional structure of the NHS which was subject to little prior discussion and not foreshadowed in the Coalition Programme. (Paragraph 44)

7.  While such a "surprise" approach is not necessarily wrong, it does increase the level of risk involved in policy implementation. It allows less time to understand complexity and detail, and less time to develop and explain policy; and it leads to less understanding of objectives by staff, patients and local communities. (Paragraph 46)

8.  A successful "surprise" strategy requires clarity and planning, but the Committee does not think that the White Paper reflected these qualities. There appears to have been insufficient detail about methods and structures during the transitional phase. 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. (Paragraph 47)

Events since the White Paper

9.  The Committee acknowledges the development of PCT clusters as a pragmatic response to the situation that developed following the publication of the White Paper. (Paragraph 64)

10.  The Committee welcomes the fact that the Government has acted promptly to fill the post. It believes that this decision represents an important step in developing a commissioning function which will allow the NHS to achieve the efficiency gains which are required during the lifetime of this Parliament. (Paragraph 65)

11.  The formation of clusters must not, however, serve as merely a short-term expedient. The way that the clusters are constituted needs to be consistent with long-term objectives for the NHS. (Paragraph 66)

12.  Although the Committee welcomes the establishment of PCT clusters it remains 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. (Paragraph 68)

13.  The Committee recommends 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. (Paragraph 69)

14.  The development of Pathfinder commissioning consortia represents a further important step in clarifying future commissioning responsibility. The Committee remains very concerned however that a timescale which involves a further 15 month delay in establishing full coverage represents a serious risk to the quality of commissioning decisions during that period. It means that a total of two years will have elapsed since the formation of the Government during which responsibility for managing an unprecedented efficiency challenge will have been unnecessarily weakened and diffused. (Paragraph 73)

15.  Changes have taken place in the management structures of the NHS in advance of Parliament having the opportunity to debate and approve them. We think this is unsatisfactory. However, given that these changes have been made, it is important that they are put in place as quickly as possible in order to ensure that the system is managed effectively. (Paragraph 74)

16.  The Committee acknowledges that delivery of the efficiency gains required by the Nicholson Challenge will require some difficult decisions about service levels. It believes, however, that this unavoidable prospect underlines the importance of effective commissioning structures that are able to make decisions which reflect defensible clinical and managerial priorities. It is concerned that there appears to be a growing perception that the emerging pattern of service developments reflects management instability and weakness in the organisations on which this responsibility rests. (Paragraph 77)

17.  The uncertainties described in chapter 4 will almost certainly have added both to the direct costs of transition, as well as the indirect costs incurred as a result of poor decision making by Commissioners. We welcome the Secretary of State's commitment to publish a full Impact Assessment at the time of publication of the forthcoming Health Bill and expect that it will include a full assessment of the transition costs likely to be incurred as a result of the White Paper proposals. (Paragraph 84)

Priorities for strengthening commissioning

18.  We intend to examine further the assurance regime which it is proposed to establish around commissioning consortia in order to satisfy itself that the NHS Commissioning Board has sufficient authority to deliver its objectives defined in its Commissioning Outcomes Framework. (Paragraph 89)

19.  We 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. (Paragraph 91)

20.  The Committee endorses the principle of clinical engagement in commissioning. We heard evidence from doctors about how they had already become involved in commissioning and they welcomed the emphasis on clinical engagement in the White Paper. (Paragraph 95)

21.  The Committee believes 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. (Paragraph 96)

22.  Real or otherwise, the perception of a potential legal challenge of commissioning decisions may be sufficient to deter GPs from engaging their secondary care colleagues in pathway redesign. We recommend that the Government addresses these concerns by clarifying the law on this issue. (Paragraph 101)

23.  The Committee agrees that local engagement with the commissioning of primary care services is important and therefore welcomes this development. The potential conflict of interest between consortia and local primary care providers does however remain. We therefore intend to review the arrangements proposed in the bill for the commissioning of primary care services. (Paragraph 104)

24.  We intend to review the arrangements proposed in the Bill to enable commissioning consortia to address these issues effectively; this will include a review of the ability of the new system to encourage commissioning consortia to cooperate in achieving the benefits to patients which may be available from major service reconfiguration. (Paragraph 110)

25.  The Committee intends 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. (Paragraph 115)

26.  In the light of these concerns, we recommend that the Shadow NHS Commissioning Board publishes its proposed funding formulae for consortia as a matter of urgency. (Paragraph 116)

27.  The Committee does not find the current stance on patient and public engagement in commissioning persuasive. The National Health Service uses taxpayers' resources to deliver a service in which a high proportion of citizens take a close interest both as taxpayers and actual or potential patients. While the Department may be right to point out that there is no special virtue in uniformity of structure, the Committee regards the principle that there should be greater accountability by commissioners for their commissioning decisions as important. We therefore intend to review the arrangements for local accountability proposed in the Bill. (Paragraph 118)

28.  The Committee urges the Government to clarify the management allowance arrangements as a matter of urgency including when the higher figures will be phased in, as this will have a significant impact on commissioning capacity of consortia. (Paragraph 121)

29.  The Government must support consortia and existing commissioning organisations to form clear and credible plans for debt eradication and for tackling structural deficits within their local health economy. The Committee intends to further review this issue in its further work. (Paragraph 123)

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Prepared 18 January 2011