HC 1048-III Health CommitteeWritten evidence from the Audit Commission (PH 152)

Summary

1. The Audit Commission welcomes the opportunity to submit evidence to the Health Committee’s inquiry into public health. Our response focuses on three points in the terms of reference.

The future role of local government in public health – section 1 of this submission

We recognise the opportunities for greater integration and a joint approach to funding and commissioning public health services between councils and local health bodies.

The proposed composition of health and wellbeing boards successfully reflects key local interests. However, the boards are only advisory in nature and they will have no powers to compel organisations to act. The balance of membership will be determined locally, but local authorities are likely to ensure that their accountability is reflected in the boards’ composition.

The combination of outcome-focused health and wellbeing strategies with the publication of a public health annual report can provide a basis for accountability through transparency. Strategies should set out priority actions to address inequalities, and explain what the contributions of different partners will be.

Arrangements for commissioning public health services—section 2

We have concerns that the proposed arrangements for public health expertise (in councils) do not match with commissioning responsibilities (GP consortia). Furthermore, the NHS Commissioning Board will be separate from Public Health England, which will be part of the Department of Health.

We recommend that there should be a statutory duty on Directors of Public Health and GP consortia to cooperate. This would ensure that Directors of Public Health provided public health advice to GP consortia in their area, and would be related to the obligation to prepare a joint strategic needs assessment.

GP consortia should be situated within local authority boundaries. Local authorities may find it hard to engage with consortia that cross several boundaries or are not within their area.

Areas of responsibility should be clarified, so as to avoid cost, service and complaint “shunting” between organisations. Unless there is clarity, the results could for example include both organisations withdrawing from funding or providing a service, believing it is the responsibility of the other, or where a particular area of public health spans a wide range of services.

Arrangements for funding public health services—section 3

Information on how much is spent on tackling the causes of ill-health and reducing health inequalities is currently very limited. It would help both national and local accountability if there was a clear commitment to publish data on resource allocation.

Too much separation of budgets (for provision of health care, the promotion of good health and prevention of ill health) has risks attached. These include making it more difficult to move spending between budgets and so make allocative efficiencies.

The proposals may create doubt around sources of funding for specific services. This could lead to a lack of clarity about organisational responsibilities. For example, the NHS, rather than local authorities, should fund and commission some early presentation services.

The group developing the grant formula should include some local government sector representation, and also representation from those currently overseeing the local government resource review. It should consider geography, council type and political control.

We do not have a view on what the conditions on the grant should be, but we would expect them to be few and mainly related to any relevant national minimum standards or key requirements (for example to cover any transitional arrangements for specific services). The principles of localism should apply, giving each area the maximum flexibility to address their local priorities and contexts.

If properly designed and established, payment for performance schemes can be effective and could work in public health.

Section 1: The Future Role of Local Government in Public Health

2. The new public health arrangements have the potential to improve joint working between health, local government and other public bodies. Strong partnerships with well-developed performance arrangements are essential for making the best use of scarce public funds. One agency working alone cannot tackle problems of smoking, poor diet, physical inactivity, excessive alcohol consumption or child health. Sexual health, for example, spans a wide range of services, from safe sex advice in schools to the commissioning of termination services.

3. Work by the Audit Commission and other organisations has found that local success in tackling public health issues is linked to:

leadership;

good information that enables money and activity to be targeted;

strong partnership working; and

engagement with local communities that builds community capacity.1

4. However, we also found that proven ways of tackling health issues were not being adopted consistently, and that few areas were successfully addressing the causes of health inequalities.

5. Much of our research provides examples of effective joint working between public sector bodies to improve health. For example, we have reported action on homelessness, fuel poverty, overcrowding, and other forms of poor housing.1, 2, 3, 4 However, maximising value for money requires councils to align their internal activities as well as to work well with health bodies. We have previously found that different departments within councils have not always communicated well with each other.2

Health and wellbeing boards

6. The government intends that local statutory health and wellbeing boards will support collaboration across the NHS and local authorities. The proposed composition of health and wellbeing boards successfully reflects key local interests. The boards should be suitable bodies to develop joint strategies guiding the use of the public health budget.

7. However, we note that health and wellbeing boards will have no powers to compel organisations to act. Organisations under financial pressure are likely to avoid or transfer responsibilities where there is no clear dividing line, for example, during 2004–05 and 2005–06 when London local authorities complained about NHS actions.

8. Local authorities are the accountable body for the budget. The balance of membership will be determined locally, but local authorities are likely to ensure that their accountability is reflected in the boards’ composition.

9. Joint strategic needs assessments (see below) will offer opportunities for local people to influence priority setting. Health and wellbeing boards should ensure they maintain a focus on the wider public interest. Past experience of overview and scrutiny committee work on public health shows some inconsistency across the country in the ability and willingness to hold local healthcare organisations to account for their delivery of health improvement programmes and services. On occasion, members appeared to be ill-equipped to ask pertinent questions about population-wide issues—such as local variations in health – rather than queries about individual services.5

Joint strategic needs assessments

10. The government intends that GP consortia and local authorities will each have an obligation to prepare a joint strategic needs assessment, and to do so through the arrangements made by the health and wellbeing board.

11. Joint strategic needs assessments are an important tool for improving health by addressing local public health needs. One of the challenges in delivering public health programmes is to understand the needs of the local population and directly to target action in response. In the past, the lack of timely, accurate and available data (for example, for sexual health or obesity) has prevented effective commissioning, as there were limited standardised measures of local need in some health areas. This made developing, commissioning and performance managing targeted programmes a challenge.5

Joint health and wellbeing strategies

12. In the past, a systematic strategic approach to improving health and wellbeing has been the exception rather than the rule. The key to an effective strategy is to be able to draw a clear logical thread from local need through the strategy to its implementation plan and clearly communicating the outcomes. Strategies should clearly set out priority actions to address needs and explain what the contributions of different partners will be.6

13. The combination of outcome-focused health and wellbeing strategies with the publication of a public health annual report can provide a basis for accountability through transparency. Improving mediocre performance through greater transparency is as important as identifying and helping those at the bottom and sharing the good practice of those at the top.

Section 2: Arrangements for Commissioning Public Health Services

14. Once primary care trusts are abolished, some of their public health roles will transfer to local authorities. This could mean that, locally, GPs and GP consortia will have less access to public health expertise. Nationally, the NHS Commissioning Board will be separate from Public Health England, which will be part of the Department of Health. The government should ensure that NHS commissioners receive public health advice, from councils locally or from Public Health England nationally.

15. Furthermore, splitting responsibility for public health between local authorities and Public Health England may give rise to uncertainty, particularly from the public.

16. We therefore consider that:

There should be a statutory duty on Directors of Public Health and GP consortia to cooperate. This would ensure that Directors of Public Health provided public health advice to GP consortia in their area, and would be related to the obligation to prepare a joint strategic needs assessment.

Public Health England could have a similar role in providing public health towards the NHS Commissioning Board.

GP consortia should ideally be situated within local authority boundaries. Local authorities may find it hard to engage with consortia that cross several boundaries or are not within their area.

Areas of responsibility should be clarified, so as to avoid cost, service and complaint “shunting” between organisations, which may, for example, result in both organisations withdrawing from funding or providing a service, believing it is the responsibility of the other. Or, where a particular area of public health, such as sexual health, spans a wide range of services, from safe sex advice in schools to the commissioning or termination services. One end of this range seems to lie better with the local authority but the other seems to lie better with GP consortia. The public should have a clear route for complaints covering the health service, regardless of commissioning responsibilities.

Section 3: Arrangements for Funding Public Health Services

17. Both the potential benefits and the potential challenges of reforming public health funding are increased by the fact that information on how much is spent on tackling the causes of ill-health and reducing health inequalities is currently very limited. The Commission published research into this issue in 2010.7 It drew attention to the difficulty of knowing how much to ring-fence, and showed how little of the estimated public health spend was on interventions where local flexibility was possible.

18. Our research also found evidence that non-ring-fenced funding directed to deprived areas had simply led to higher spending on secondary care because there was more money available. These areas had higher hospital costs that were unrelated to the cost of treating their patients.8 However, where funding had been ring-fenced (to address teenage pregnancy) there was little relationship between the amount spent and the outcomes achieved.7

19. Both allocation mechanisms (complete freedom with no incentives, and wholly directed spending irrespective of local priorities) have weaknesses.

20. No matter how it is allocated, there should be better targeting of money and services and close attention to outcomes at a local level. This requires a clearer sight of what is being spent and sharper evaluation of its impact. This is why the Commission’s recent report Giving Children a Healthy Start9 included a sample analysis of local spending aimed at improving the health of children, which other local areas can follow.

21. It would help both national and local accountability if there was a clear commitment to publish data on resource allocation. This is important because resources and responsibility for improving the health and healthcare of a local population will be divided between GP consortia, the NHS Commissioning Board, Public Health England and local authorities. All of these will have different geographical footprints and, potentially, resource distribution. The public may find it difficult to understand the differing responsibilities of the organisations and hold them properly to account.

22. Too much separation of budgets (for provision of health care, the promotion of good health and prevention of ill health) has risks attached. These include that it becomes more difficult to move spending between budgets and so make allocative efficiencies.

Allocating public health funding

23. Developing an allocation formula depends on several factors, such as the extent of universal coverage of services. If most services are to be universal, there will be less need for a health inequalities element to the formula. For example, water fluoridation need only be calculated on a population basis.

24. The Department of Health should therefore be clear about the purposes of the grant, the services it covers and the extent to which those services are universal.

25. Without such clarity, the proposals could create confusion about sources of funding for specific functions. This could lead to unclear organisational responsibilities. For prevention and early presentation for example, it is not clear where the boundary of responsibilities will lie between the local authority and the local NHS for healthy living campaigns and achieving earlier diagnosis.

26. We recommend the group developing the grant formula should include some local government sector representation. It should also have representation from those currently overseeing the local government resource review. It should consider geography, council type and political control.

27. We do not have a view on what the conditions on the grant should be, to ensure the successful transition of responsibility for public health to local authorities. However, we would expect them to be few and mainly related to any relevant national minimum standards or key requirements (for example to cover any transitional arrangements for specific services). The principles of localism should apply, giving each area the maximum flexibility to address their local priorities and contexts.

Applying the Public Health Outcomes Framework to the health premium

28. We understand from the Department’s response to its Transparency in outcomes consultation that it may not now pursue payment for performance for outcomes in social care.

29. If payment for performance schemes are designed and carried out properly, they could work in public health. However, “payment by results” is not well-established in local government. Its introduction will need careful handling to ensure it is well understood and planned for locally, with contingencies for different levels of success.

30. Incentive schemes are unlikely to have an effect on public health outcomes where the amount involved in the grant is very small and/or is largely spent on specified universal services. Such schemes are also less likely to be successful if improvement depends on much wider action and larger sums of money, for example in housing and/or education.

31. The Commission has conducted some research into payment for performance schemes in health care. Based on our research, several factors should be considered when applying a health premium.

First, the strength of the evidence base for cost-effective interventions. If the evidence is weak, then putting too much emphasis on outcome-based payments is risky.

Second, the degree to which one can credit the effect on outcomes to the actions of any one body. Unless one can show a link, with confidence, then there is a risk of incentivising the wrong activities or rewarding the wrong organisation.

Third, the best payment for performance schemes are not just based on outcomes. Including input (or structural) and output (or process) measures creates a more balanced and effective performance framework.

Fourth, research into behavioural economics suggests the proportion of payment put at risk does not need to be large. However, where the proportion of payment is likely to be very small—as could be the case if many services are to be universal—then the motivational effect may be non-existent.

Finally, financial incentives work well with other levers, like public reporting. But where there are already strong levers in place—such as legal duties—then financial incentives do not offer good value for money.

References

1 Audit Commission, Care Quality Commission, Ofsted, Her Majesty’s Inspectorate of Constabulary, Her Majesty’s Inspectorate of Probation, Her Majesty’s Inspectorate of Prisons, Oneplace national overview report, February 2010.

2 Audit Commission, Building better lives: getting the best from strategic housing, September 2009.

3 Audit Commission, Lofty ambitions: the role of councils in reducing CO2 emissions, October 2009.

4 Audit Commission, Rising to the challenge: improving fire service efficiency, December 2008.

5 Audit Commission and Healthcare Commission, Are we choosing health? The impact of policy on the delivery of health improvement programmes and services, June 2008.

6 Audit Commission, Improving health and well-being, June 2007.

7 Audit Commission, Healthy balance: a review of public health performance and spending, March 2010.

8 Audit Commission, Reference costs and allocations, March 2008.

9 Audit Commission, Giving children a healthy start: a review of health improvements in children from birth to five years, February 2010.

June 2011

Prepared 28th November 2011