Integrated care: organisations, partnerships and systems Contents

10Governance and legislation

270.The current legislation does not prohibit collaborative working or integrated care, but neither was it designed to enable it.250 Rather, the legislation was intended for a different purpose: to facilitate choice and competition within the NHS. As described in Chapter 2, reforms by successive governments from the 1990s through to the Health and Social Care Act 2012 extended the role of market forces in the NHS. These reforms, and structural divides imposed since the NHS’s creation, in some instances present obstacles to collaborative working.

271.Procurement regulations covering the tendering of NHS contracts and criteria for mergers between NHS organisations, as well as the autonomy and flexibilities provided to foundation trusts (e.g. their ability to generate income from private work) were designed to facilitate choice and competition. Chapter 8 describes how the legal duties and powers of national bodies in many instances were set up to oversee, protect and incentivise diverse local health and care economies in which autonomous organisations compete.

272.Sustainability and transformation partnerships, integrated care systems, integrated care partnerships and an Accountable Care Contract, if and when it is introduced, are all pragmatic responses to constraints imposed by the current legal framework in which health and social care services operate.

273.Some witnesses told us that introducing STPs, integrated care systems and accountable care organisations into legislation would be a significant undertaking. However, there are trade-offs to make. As we describe in this chapter, working within the existing legislation means health and social care services are operating with significant governance risks, and this has potential implications for patients and local communities.

274.This chapter sets out the main problems and challenges posed by the current legislation and views on legislative reform, particularly the timing of primary legislation and the Government’s approach to legislative reform.

Governance and accountability arrangements

275.Remaining within the existing legislation carries significant risks for local bodies. Sustainability and transformation partnerships and integrated care systems bring together clinical commissioning groups, NHS trusts and foundation trusts and local councils. The governance arrangements of these organisations are complex for the following reasons:

a)The legal decision-making powers rest with the organisations involved rather than the STPs or ICSs. These constituent NHS and local government bodies have different legal duties and powers. For example, local councils are democratic institutions in their own right, and are unable to run a deficit, unlike NHS bodies.

b)STPs and ICSs often have a large number of bodies. The smallest partnership is made up of six organisations, whereas the largest has 42.

c)The size of the population covered by these partnerships also varies considerably, from 312,000 to 2.8million patients.

d)All partnerships were formed in a short space of time and the boundaries of some areas were imposed. These boundaries do not always align with organisational boundaries or patient flows.

e)For many local leaders, the relationships in these partnerships are still relatively new. Many do not have the same history of collaborative working, which is evident in the leading integrated care systems.

276.In the Next Steps on the NHS Five Year Forward View, NHS England and NHS Improvement announced a basic governance structure to support sustainability and transformation partnerships. The document prescribed that from April 2017 each local sustainability and transformation partnerships must form an STP board from existing partners, including local government and primary care where possible, and establish “formal CCG Committees in Common or other appropriate decision-making mechanisms where needed for strategic decisions between NHS organisations.”251

277.Despite the fact that STPs and ICSs are not legal entities, national bodies in their oral evidence sought to assure us of the strength and clarity of the legal accountabilities of the local bodies. Ian Dalton, Chief Executive of NHS Improvement, stated:

Certainly when I was a hospital chief executive, before I came to NHSI, I was very interested in joining up care, but I also felt that both in law and in my own personal aspirations for patients that the quality of care was on my shoulders, as the person running the health services provided by those five hospitals. None of the arrangements that we have been talking about today in any way alters that.252

278.The concern that was expressed to us was that the local health and social care providers and commissioners are operating with significant risks to their governance and decision-making, as these arrangements increase the distance of decision-makers from the decisions they are taking.253 For example, Saffron Cordery, Deputy Chief Executive of NHS Providers, explained that STPs and ICSs “impact on the level of risk, and on governance, accountability and lines of sight over what we are doing.”254

279.Operating in this way is also time consuming. Proposals agreed at an STP level must be taken back and approved by the boards of the partner organisations.255 Local leaders we have heard from during this inquiry described the concerns they have about ensuring all the bodies continue to collaborate. As Rob Webster, Chair of the West Yorkshire STP, told us, “change proceeds at the speed of trust.”256

280.Julie Wood, Chief Executive of NHS Clinical Commissioners, explained that “what the systems are trying to do locally is make sure that their governance and accountability, where they are working across a bigger geography, is clear, so that there is clear accountability for the decisions they are taking.”257


281.The most limiting aspect of the existing framework are requirements covering clinical commissioning groups’ procurement of NHS services. Julie Wood explained that procurement regulations pose immediate obstacles to collaborative working:

It is where our current systems are running close to where the legislation ends. Our new system of working together in an integrated way depends much more on collaboration between organisations, and at one point that pushes up against the procurement and competition elements you talked about earlier.258

282.NHS commissioners through these arrangements are unable to discriminate between bidders based on the type of ownership (e.g. whether they are public, private or voluntary). Unless the scope of services contracted means there is only one credible bidder, NHS providers compete with each other, as well as non-statutory providers, for NHS contracts. As well as the consequent fragmentation of service delivery, this process is widely described as time-consuming and costly. For example, Paul Maubach from Dudley CCG explained:

It would be quite helpful if we were not legally required to go through a procurement process, because it is very time-consuming. If we have a system that is working well, to be able to switch from the current NHS standard contract to an ACO contract without the need for procurement would be extremely helpful because it would speed up the process significantly.259

Views on legislative reform

283.The legal requirements imposed by the Health and Social Care Act 2012, and its ethos around competition, are widely considered to be a barrier to integrating care. During our inquiry we heard that the law will need to change if we are to best realise the transition to more integrated, place-based care. However, demands on parliamentary time and civil services resources posed by Brexit create an extremely challenging background for introducing primary legislation. The arithmetic of a hung parliament may be a disincentive to bring forward health reforms, but also presents an opportunity if there is goodwill for cross-party collaboration.

284.This scenario has left national and local leaders with an imperative to move towards more collaborative working, but with little room for manoeuvre in which to do so. The current position of national bodies is that the changes that are being made are legal (although the legality of an ACO contract is subject to a judicial review) and that:

What we are not doing, as the NHS, is sitting back and projecting on to you guys as Parliament, and saying, “Until you do something, we are just going to sit here and let things fizzle on.” We are getting on with doing what we can to improve care for patients.260

285.We heard that repeated top-down reorganisations of the health service, including the changes made by the Health and Social Care Act 2012, mean there is little appetite from local leaders of health and social care services for major legislative reform, even if it would make the changes local leaders are making easier.

286.The existing legal context does not necessarily enable the collaborative relationships local leaders are building, and in places adds significant complexities for them to grapple with. However, the absence of prescriptive legislative proposals has meant local leaders can focus on developing their relationships and how local bodies work together. Imposing legislative reforms while local systems are still evolving was regarded as a potential distraction from transforming care.261

287.This argument is echoed by national leaders. Noting that the history of the NHS “has not been short of reorganisations”, Sir Chris Wormald, Permanent Secretary at the Department of Health and Social Care, told the Committee of Public Accounts that the Department and national bodies had taken the decision not to spend “another several years redrawing the map of the NHS,” but instead to focus on relationships between professionals. According to Sir Chris:

Most of the things we are describing as transformation come down to how clinicians and others relate to each other, not the organisations that they sit within.262

288.Proponents of introducing more immediate changes to primary legislation made the case that working around the existing legal framework bypasses the important role Parliament plays in providing public accountability and scrutiny. Dr Graham Winyard, former National Medical Director for the NHS and an advocate of integrated care, expressed grave concerns about the way integrated care is being implemented. The crux of Dr Winyard’s argument is that:

In normal times, there would be absolutely no doubt that changes of this magnitude would be brought about by primary legislation following public consultation and proper Parliamentary scrutiny. Instead Parliament is perceived as paralysed, not least by Brexit, and incapable of addressing serious NHS issues. The resultant work-arounds being adopted by NHS England, with commercial contracts introduced to enable ACOs to function, themselves introduce a whole range of real dangers to the NHS.263

289.Professor Allyson Pollock and Dr Graham Winyard argued that it is possible to introduce primary legislation that allows changes to be worked out from the bottom up and without any need to impose these changes on local bodies until they are ready, but with the advantage of providing clear public accountability when they do. According to Professor Pollock:

I think this is a false binary. It is perfectly possible to have legislation that allows for proposals to be worked out on the ground, and indeed Scotland did it over health and social care. They passed an Act of Parliament and it was worked out bottom up from the ground.264

290.There are strong arguments for wider changes to primary legislation. In the meantime, we support the current evolutionary approach to the development of STPs, integrated care systems, integrated care partnerships and accountable care organisations. However, lines of accountability for changes to local services must be clear and robust and decisions must be taken in a transparent way.

291.There are also immediate legal obstacles that the Government and national bodies should seek to address to enable local areas to progress before primary legislation can be introduced. One example of an immediate obstacle was presented to us by Ian Williamson, Chief Accounting Officer for Manchester Health and Care Commissioning, who described how differences in VAT exemptions covering NHS and local government pose significant financial implications for the local area’s plans to introduce accountable care.265

292.Simon Stevens did not suggest any aspects of the current legal framework that need to change imminently, although he committed to keeping us informed of any frictions that arise as the NHS proceeds towards more integrated care. We welcome NHS England’s commitment to keep us informed and we will be following this matter closely.

293.Niall Dickson, Chief Executive of the NHS Confederation, presented a view which was echoed by many stakeholders, in saying:

There will come a time when Parliament will have to intervene and set out a new form of legislation. I hope it is approached in a very different and much more consultative way, which allows for greater flexibility at local level, but nevertheless gives ordinary users of the service guarantees about what they can find in their local area, because it is still a national service and still needs to be. It needs visible governance and accountability.266

294.There is widespread support for a bottom-up and evolutionary approach to change, but we also heard calls, often from the same organisations, for more clarity about what the future health and social care landscape will look like, including the roles and functions of bodies within it.267 For example, clarity is needed on the role of commissioners within the system and which of the new structures are likely to be a permanent fixture and which are temporary solutions.

Conclusions and recommendations

295.Positive progress has been made within the constraints of the current legislative framework but sometimes requiring cumbersome workarounds. Our view is that national and local leaders have had little room for manoeuvre in which to transform care. We are concerned that many local areas are operating with significant risks in terms of their governance and decision-making.

296.The law will need to change to fully realise the move to more integrated, collaborative, place-based care. There is an opportunity for the Government and the NHS to rebuild the trust previous reforms have eroded by developing legislative proposals. These proposals should be led by the health and care community to shape the future health and social care landscape. In the meantime, Government and national bodies should do more to provide clarity and guidance on what is possible within the current legal framework.

297.The law will need to change. We recommend that Parliamentarians across the political spectrum work together to support the legislative changes to facilitate evolutionary change in the best interests of those who rely on services.

298.The Department and national bodies should adopt an evolutionary, transparent and consultative approach to determining the future shape of health and care. The Department and NHS England should establish an advisory group, or groups, comprised of local leaders from across the country, including areas that are more advanced and those further behind, and representatives from the health and care community, to lead on and formulate legislative proposals to remove barriers to integrated care. The proposals should be laid before the House in draft and presented to us to carry-out pre-legislative scrutiny.

299.The purpose of legislative change should be to address problems which have been identified at a local level which act as barriers to integration in the best interest of patients. We wish to stress again that proposals should be led by the health and care community.

300.Evidence we have heard from representatives from NHS and local government has identified the following legislative areas that may need to be considered:

a)A statutory basis for system-wide partnerships between local organisations;

b)Potential to designate ACOs as NHS bodies, if they are introduced more widely;

c)Changes to legislation covering procurement and competition;

d)Merger of NHS England and NHS Improvement; and

e)CQC’s regulatory powers.

Where barriers are identified and can be removed with secondary legislation, this may represent a less complex way forward.

301.Until legislation is introduced, national bodies should support local areas to develop transparent and effective governance arrangements that allow them to make progress within the current framework. National bodies should also provide greater clarity over what is permissible within current procurement law and develop support for local areas in working through these issues. National bodies should set out the steps they plan to take to provide clarity, guidance and support to local areas on these matters in response to this report.

250 Q209 Saffron Cordery

251 NHS England, Next Steps on the NHS Five Year Forward View, March 2017, page 33

252 Q351 [Ian Dalton]

253 Q209 Saffron Cordery

254 Q209 Saffron Cordery

255 Q222 Julie Wood

256 See Annex 1

257 Q223 Julie Wood

258 Q209 [Julie Wood]

259 Q197 [Paul Maubach]

260 Q319 [Simon Stevens]

261 SY&B note

262 Oral evidence to the Committee of Public Accounts on 5 March 2018 Session 2017–19 HC793 Q113 [Sir Chris Wormald]

263 Dr Graham Winyard (STP0069)

264 Q48 [Professor Pollock]

265 Q161 [Ian Williamson]

266 Q209 [Niall Dickson]

267 See Chapter 6.

Published: 11 June 2018