Conclusions and recommendations
Competition
1.We warmly welcome, in principle, NHS England and NHS Improvement’s proposals to promote collaboration, especially the proposal to repeal section 75 of the Health and Social Care Act 2012 and revoke the regulations made under it. We believe collaboration, rather than competition, as an organising principle, is a better way for the NHS and the wider health and care system to respond to today’s challenges. (Paragraph 29)
2.We heard concerns that NHS England and NHS Improvement’s proposals risk deregulating, rather than de-marketising, the NHS without creating an alternative regulatory mechanism. In its response to this report, we request that the Government set out its assessment of the likelihood that the proposed legislation would have the effect of deregulating competition in the NHS and how it intends to ensure patients and taxpayers are protected from any adverse unintended consequences. (Paragraph 30)
Competition and Markets Authority
3.We support NHS England and NHS Improvement’s proposal to remove the need for NHS Improvement to refer objections on the national tariff and provider licence conditions to the CMA. No referral has ever been made and the CMA, as a general competition regulator, is not best placed to intervene in these matters. Nonetheless, we share the concerns of providers about the removal of this safeguard altogether and recommend that the Department, NHS England and NHS Improvement build in a mechanism for independent adjudication of challenges to these decisions. (Paragraph 31)
4.We welcome the intention behind removing the Competition and Markets Authority’s NHS-specific role in overseeing mergers involving foundation trusts. The CMA’s role, we heard, has led to unnecessary cost and duplication for foundation trusts involved in mergers and acquisitions. However, to remove foundation trusts entirely from the CMA’s remit would, we heard, require the law to change so that foundation trusts are no longer considered as ‘enterprises’ under the Enterprise Act. We recommend that the Department, together with NHS England and NHS Improvement, seek legal advice on the changes that will be required to remove foundation trusts from the CMA’s jurisdiction and the implications of doing so. (Paragraph 32)
National tariff
5.We support NHS England and NHS Improvement’s intention to provide greater local flexibility over the use of the national tariff system. Providing more flexibility will help local providers and commissioners to remove perverse incentives, especially in managing patients with multiple long-term conditions. One of the benefits of a national tariff system is that it has helped to ensure that providers compete on the quality, rather than the price, of the care they deliver. In its response, we request that the Department, together with NHS England and NHS Improvement, outline how they plan to avoid and/or mitigate the concern that these changes could result in price competition. (Paragraph 41)
Procurement
6.We support the intent behind NHS England and NHS Improvement’s proposal to ensure that commissioners can exercise discretion over when to conduct a procurement process. The practice of procurement in parts of the NHS, particularly community and mental health services, has added complexities and costs to the system, with little added value for patients in return, and made it harder for services to integrate. (Paragraph 54)
7.Given the way the NHS in England operates, the proposal to take it out of the Public Contract Regulations 2015 may well face legal difficulties. NHS England, NHS Improvement and the Department need to explore that in detail and be clear about the law, including EU law. In the meantime, however, we recommend that they should explore whether there are more flexibilities within PCR 2015 than are currently being used. (Paragraph 55)
Best value test
8.We recommend that the Department, NHS England and NHS Improvement work with the NHS Assembly to co-produce a ‘best value’ test. This test should be underpinned by a broad definition of value, with the quality of care and health outcomes at its heart, but also aligned with conceptions of public and social value used by other public services. As the term ‘best value’ is perceived in local government to be synonymous with cost-cutting, we strongly advise that NHS England and NHS Improvement reconsider the using the phrase ‘best value’. (Paragraph 56)
Patient choice
9.We support the intention of NHS England and NHS Improvement’s proposals to strengthen patient choice. The evidence we have taken in the course of this inquiry suggests that practical considerations such as geography have a greater influence on the exercise of patient choice than legislation, and that what most patients want is good quality care close to their home. Using patient choice as a lever to improve quality may help for some services, particularly planned or elective care, but as an organising principle, we believe that encouraging collaboration between providers is a much better way to provide good-quality care for patients, especially those with multiple long-term conditions. Nonetheless, witnesses to our inquiry accepted the desirability of maintaining and enhancing patient choice in the NHS. Those developing the proposals should ensure that they do not have unintended consequences that negatively impact on the ability of patients to exercise their right to choose between providers. (Paragraph 63)
10.Having a right to choice relies on that right being enforceable. We recommend that an appeal mechanism is preserved, within an existing independent body, for patients who believe they have been denied choice. (Paragraph 67)
Integrating care provision
11.Integrating contracts and services is not the same as integrating care for patients. Nevertheless, there already exist different contractual and service options, permissible within existing legislation, that help to remove or reduce the barriers which organisational boundaries pose to integration. More work is needed to understand why some services are currently unable or unwilling to make use of these arrangements. We recommend that the National Implementation Plan/ framework should include proposals to increase the uptake of existing contractual options and/or further extend the ways organisations can work collaboratively. (Paragraph 73)
Integrated care provider contract
12.We welcome assurances from NHS England and NHS Improvement that holders of an Integrated Care Provider contract are expected to be public statutory providers, but with the ability to subcontract with a range of other partners. This proposal would achieve a sensible balance by enabling ICP contract holders to draw on the diverse mix of health and care provision that exists across the country, while ensuring the responsibility entailed in these long-term contracts rests with public statutory bodies. (Paragraph 78)
13.We strongly recommend that legislation should rule out the option of non-statutory providers holding an ICP contract. Doing so would allay fears that ICP contracts provide a vehicle for extending the scope of privatisation in the English NHS. (Paragraph 79)
14.Given the political climate, we recognise that legislation may not be brought before the House of Commons for some time. Until legislation is passed, we strongly urge that ICP contracts should be piloted only in a small number of local areas and subject to careful evaluation and that they should not be not held by non-statutory providers. (Paragraph 80)
Creation of new NHS trusts
15.We support the proposal to give the Secretary of State the power to create a new NHS trust to deliver integrated care in an area. This change to the legislation will extend the ways in which local commissioners can integrate health and social care. Our view is that this power must not be used by the Secretary of State to impose a form of integration on local health and care services or as threat to incentivise organisations to collaborate. We recommend that the Secretary of State must not be allowed to exercise this power without a request from the local clinical commissioning group(s). (Paragraph 86)
16.We recommend that a request to the Secretary of State must follow a robust assessment and public consultation to ensure the creation of a new NHS trust is in the best interests of patients and the local population, and represents an efficient use of public money. (Paragraph 87)
VAT rules
17.We recommend the Government’s forthcoming review of VAT exemptions on central government should also make recommendations for how VAT exemptions covering the NHS and local government can be protected and/or extended so as to ensure neither body is worse off as a result of integration. (Paragraph 92)
Integrated care systems
Governance and accountability
18.The issue of the accountability of integrated care systems (ICSs) and sustainability and transformation partnerships is very important, and not easily solved in the absence of their establishment as statutory bodies. While we agree that it is not advisable at this time to establish all integrated care systems as separate legal entities, in the absence of formal accountability for their collective decision-making, we expect ICSs to meet the highest standards of openness and transparency in the conduct of their affairs by holding meetings in public and publishing board papers and minutes. Transparency, however, is not an adequate substitute for accountability if it is not clear who should be held to account. It is vital to avoid creating a situation where everyone in the system is accountable, but no-one can be held responsible for important decisions. We recommend that the National Implementation Plan due this autumn should set further directions for the standards of governance and transparency local systems should demonstrate. (Paragraph 104)
Joint committees
19.We agree that the law should change to enable clinical commissioning groups and NHS providers (NHS trusts and foundation trusts) to establish joint committees. (Paragraph 109)
20.We are concerned that the proposals are currently too NHS-centric. Integrated care systems must not repeat mistakes of the past and become unresponsive monopolies or “airless rooms” where non-statutory alternatives are shut out. (Paragraph 110)
21.Local authorities must be part of the decision-making process in order for integrated care systems to be truly place-based and focused on population health. We recommend that additional proposals should be developed that enable local authorities to participate as equal partners in joint committees with clinical commissioning groups and NHS providers. (Paragraph 111)
Triple aim
22.We welcome the proposal to introduce a shared duty that requires organisations that plan services in a local area (CCGs) and NHS providers to “promote the triple aim of better health for everyone, better care for all patients and the efficient use of NHS resources, both for their local system and for the wider NHS.” Nevertheless, the proposal as currently framed is too NHS-centric. The term ‘better health’ was viewed by witnesses, particularly representatives of the voluntary and community sector, as focused on the NHS. Wellbeing, in contrast, was seen as a more inclusive term which reflects the contribution local government and the voluntary and community sector make to people’s lives. Wellbeing is also an intrinsic part of the World Health Organisation’s definition of health. We recommend that the “triple aim” should be rephrased to include a specific reference to wellbeing. (Paragraph 115)
Barriers to system-working: mergers and acquisitions and capital spending limits
23.Local systems should be empowered to decide the most appropriate way to manage NHS resources. This includes being encouraged to resolve disputes between local partners about the best way to manage resources, including capital resources, within the system. There may be circumstances in which national intervention is necessary to ensure one local partner is not, unreasonably, frustrating system-wide efforts. NHS England and NHS Improvement should have powers in reserve for such circumstances, but such powers should be used only as a last resort. (Paragraph 128)
24.We do not, therefore, support these proposals in their current form. If similar proposals are brought before us for pre-legislative scrutiny in the form of the expected draft bill, we will expect to see the proposed legislation specify the limited circumstances in which these powers can be exercised. The design of these powers should focus on a) removing barriers to integrated care and b) empowering and encouraging local systems to resolve disputes over the configuration of services and the management of resources, including capital resources, themselves. (Paragraph 129)
National bodies
NHS England and NHS Improvement
25.We commend NHS England and NHS Improvement for the efforts they have made to work closer together. However, we are aware that further progress is hampered by the legislation covering the two bodies. In an era of local systems, the NHS at a national level should operate with one voice, so as to avoid any incoherence in the support, guidance and direction local systems receive. We support in principle the proposal to merge NHS England and NHS Improvement into a single body, but await further clarity on the implications of the creation of a single organisation. In particular, we are concerned about the degree of central control that would result from this merger, especially in light of the other changes put forward. When these proposals come before us again as a draft bill, one of the issues we will want to consider very carefully is how local autonomy will be protected under the new arrangements. (Paragraph 137)
Arms-length bodies
26.We would like more clarity on how establishing powers for the Secretary of State to transfer powers to arms-length bodies (ALBs), or require ALBs to delegate their functions to another ALB, will be used to support the delivery of the NHS Long-term Plan and the goal of better integration. The strategic intent behind this power is unclear. (Paragraph 140)
Published: 24 June 2019