Old NHS, New Corporate Characteristics

The government’s Health and Care Bill has been praised for ditching parts of the 2012 Lansley Act – but it only deepens the trend towards privatisation and corporate management in our public health system.

The new bill looks set to end the arm's length status of NHS England and instead assign sweeping powers over it to the health secretary. Credit: Anadolu Agency / Getty Images

Announcing the new Health and Care Bill in early February, Matt Hancock’s White Paper said that ‘our legislative proposals capture the learning from the pandemic and are driven by the context of a post-Covid world, which is now in reach.’ Both parts of this claim are nonsense. The new Bill says nothing whatsoever about public health, which is where most of the lessons of the pandemic need to be learned, and if the Department of Health’s spin doctors have yet to grasp that there cannot be a post-Covid world, everyone else has.

The Bill that is now before Parliament is really about just two things, neither of them applying lessons from the pandemic. The first is ending the arms’ length status of NHS England and instead assigning sweeping powers over it to the health secretary. The second is replacing the market competition model of the 2012 Lansley reforms with a system of regional-level management not unlike the original Health Authorities, but adapted to a market-oriented ideology. The old NHS model of management with corporate sector characteristics, you might say.

Both purposes converge in the provisions for the new system of commissioning—or managing—health services on the ground. Using the demand for savings as a justification, health manager Simon Stevens invented a new unit of healthcare organisation. These were called, as innocuously as possible, ‘footprints’, and were designed to combine the benefits of localism—still represented by GP-run Clinical Commissioning Groups (CCGs)—with the advantages of scale, represented by the catchment areas of hospital and ambulance trusts.

The idea was that each of these units would produce a ‘Sustainability and Transformation Plan’ which could save money by enabling services to be shifted out of hospitals into local community-level settings. Here, they could be delivered more efficiently and more cheaply, while rationalising the division of work between the hospitals and other larger organisations in the footprint. The plans were to be drawn up by the CCGs comprised by each footprint, working in collaboration.

How they were to collaborate was left to local ‘leaders’ to work out, and gradually these arrangements crystallised into super-CCGs, with a single anointed ‘leader’. These took over the commissioning of care from hospitals and other providers on behalf of all the still existing CCGs in the footprint. None of this had a statutory basis. How the local leaders were picked remained officially opaque, and there was no way of holding them locally accountable for the decisions they made about what services were to be available on the NHS, who provided the services, or their quality.

The new Health and Care Bill is largely about giving a statutory basis to these arrangements. CCGs will finally be abolished and the super-CCGs, which have become known as Integrated Care Systems (ICSs), will be renamed Integrated Care Boards (ICBs) and inherit most of the CCGs’ functions. But anyone who thought that the opportunity would be taken to give the ICBs the legitimacy and accountability that their predecessors conspicuously lack will be seriously disillusioned.

The one thing that the Bill clearly specifies is that the health secretary must approve NHS England’s appointments of the ICB chairs, and the chairs’ choices of chief executives; and the chairs must approve the appointment of every other member of an ICB, including the three people ‘nominated’ (not elected) to represent hospital and other trusts, GPs, and local authorities respectively.

In other words, there will be tight political control from government of who runs ICBs. And as the Financial Times’ Robert Shrimsley noted, the Tories have recently become very interested in this process, seeking to install ideologically reliable people in a wider range of much less prominent offices than in the past. From the new NHS England chief executive downwards, Sajid Javid’s attitude to appointments will be crucial.

Apart from these provisions, the constitution of each ICB is to be worked out locally. There is no requirement that any members should be elected, or for any accountability downwards. In effect, the Bill turns what was an informal closed decision-making system into a legally closed system, subject to close political control.

Many critics of the Bill are concerned at the opportunities it may give to private health providers to influence ICB decisions. This is particularly the case if they are allowed to sit on the boards of ICBs, as the Bill envisages, and if they are able to secure the outsourcing of more and more NHS services, including GP services. It is certainly a serious risk, but an even greater risk may be that politically compliant ICBs, instead of pressing for better funding, accede to further cuts in services in order to stay within dwindling per capita budget allocations.

This opens up the longer-term risk that lack of access to routine NHS care will accelerate the turn to private healthcare on the part of the middle class. Patients needing cataract surgery and other treatments for which long waiting times have built up during the pandemic are routinely encouraged to ‘go private’ if they can afford it.

The private sector understands this and is actively investing to meet an expected steady increase of demand; witness the planned takeover of the Spire hospital chain by Ramsay, and the recent takeover of BMI by Circle. Will ICBs, as constituted under the new Bill, prove active defenders of a comprehensive NHS for all, or acquiesce in its further erosion towards a residual service for those who can’t afford private care?

A further danger is cronyism. ICBs will commission services from organisations—hospital trusts, GPs, and private providers (including private hospitals and private community health and other providers)—whose representatives are also board members. The Bill requires such conflicts of interest to be registered and ‘managed’, but this is a notoriously weak idea and no penalties are provided for wrongdoing.

Under the existing rules contracts worth more than £600,000 have to be advertised. Now, however, deciding whether or not a contract is good value will be left to the discretion of the ICB. How likely is it that any holder of a multi-million pound contract, sitting on the board of an ICB, will be told by his or her fellow board members that there is doubt about whether it is providing good value?

We need to remember, too, that one of the ‘corporate characteristics’ which will distinguish ICBs from the old Health Authorities is that ICB members will not necessarily or even typically be NHS employees, or share the public service ethos of the old NHS. The Tories’ preference is for people with commercial backgrounds, such as Penny Dash from McKinsey, now running North West London’s ICS.

In the end, what is most obvious in the Health and Care Bill is what is omitted: public health, mental health, staffing, money – all the things that the pandemic has shown to be fundamental. Above all, for a Bill advertised as being about integration, there is nothing about social care, which has yet again been kicked into the long grass. It is a long way from a vision that would safeguard the future of the NHS.

About the Author

Colin Leys is the co-chair of the Centre for Health and the Public Interest (CHPI), an independent think-tank on health and social care policy. He is also an emeritus professor of political studies at Queen's University, Canada.