03 June 2016

When people visit their GP or hospital or when they use an old people’s home, they care about the quality of the service, rather than how they are organised. But organisation matters. It affects whether citizens get joined-up services – or whether people get passed from service to service, not getting what they need.

Earlier this year, new structures were announced to oversee health care in 44 areas of England. On 19 May, the NHS Chief Executive, Simon Stevens, said that these structures needed a firmer footing, implying that legislation would be needed. The new structures could create a more coherent approach to health in local areas, with decisions taken closer to the people who use the services. But austerity, the pace of change, and questions about the role of local authorities create risks that need to be addressed.

The NHS Five Year Forward View called for ‘decisive steps to break down the barriers in how care is provided.’ Services need to join up around citizens, but for this to happen, nationally organised services need to be able to plan and take decisions together in different areas of the country. The mechanisms for this integration, and for the restructuring of health services, are the bureaucratically named ‘Sustainability and Transformation Plans’ (STPs). The STPs will produce plans in 44 areas of England by the end of June – if everywhere meets this tight deadline. The idea is that the various NHS and local authority health and care services should be planned jointly. STPs are already taking on staff and becoming part of the institutional landscape, with Simon Stevens working directly with the STP leaders.

The first challenge to the STPs is the austerity and rising demand that is affecting services. We have recently explored the tough financial position in the NHS, highlighted by the announcement of deficits of £2.45bn across hospital trusts. The additional money that will be made available for STPs is conditional on progress on deficit reduction and transformation.

Local authority services are under even greater pressure. Social care saw some of the most significant cuts under the Coalition, with poorer parts of the country facing larger reductions. In the Spending Review in November, the Chancellor announced two big changes to funding for social care:

  • Local authorities were given scope to increase Council Tax by an additional 2% to fund social care
  • An additional £1.5 billion was allocated to the Better Care Fund, which is managed through the 130 Health and Wellbeing Boards.

However, the power to increase Council Tax will not be used by all local authorities, and increases will raise less money in the poorest areas, where the Council Tax base is smaller, and where the need is greatest and the cuts have been deepest. The Better Care Fund increase will come into effect in 2019-20, leaving several very lean years until then.

One of the impacts of the spending pressure on social care is that local authorities have reduced their fees to social care providers, and are purchasing fewer places.  This, combined with increased wage costs resulting from immigration controls and the higher minimum wage, has increased insolvencies among care home businesses by 34% over three years. The result is that supply (the number of care homes) is not meeting demand (people needing care), which means patients rely on hospital services by default. The National Audit Office (NAO) has found that the lack of availability of care places and the associated delays in discharge of elderly people costs the NHS £820m a year.

While spending cuts creates pressure to find new ways of working, it can also reinforce a silo mentality, as organisations focus on meeting their strict objectives and fulfilling their statutory duties, and lose sight of longer term issues like prevention, which often require a more holistic approach.

The second challenge for the STPs is the pace of change. The creation of the STPs comes just three years after the biggest ever reorganisation of the NHS in England. With the abolition of Strategic Health Authorities, there was no overall planning for health and care services in a particular part of the country, and the STPs look like a sensible way of filling that gap. However, proposals for change are more likely to produce rapid results if they go with the grain of existing institutions. Creating new institutions and planning mechanisms takes time, particularly if they are combined with other changes such as introducing new models of care. In 2015 the former Chief Executive of Marks & Spencer, Stuart Rose’s leadership review of the NHS found that ‘the level and pace of change in the NHS remains unsustainably high.’ The Government should heed his advice.

The third challenge is the way that STPs relate to local government. To date, health has not been a primary focus of the devolution of power to groups of local authorities, and while some of the STPs follow existing devolution boundaries, most do not. For example, Frimley STP follows the boundaries of a foundation trust, rather than those of a county, or local authority partnerships. As a result, most STPs are led by leaders of clinical commissioning groups or hospital chief executives. Greater Manchester is an exception, with the STP led by the Chief Executive of Manchester City Council, and the devolution deal having a large health component.

This then is the context for Simon Stevens’ suggestion that STPs should become ‘combined authorities’, bringing together commissioners and providers – on a comparable basis to the statutory partnerships of local authorities known as combined authorities. This is important for the NHS – representing a step away from the split between commissioners and providers – and also for the NHS’s relationship with local government. If the STPs did become statutory bodies, in many cases they would not align with existing county and devolution boundaries. Without this, it will be challenging to achieve closer integration with social care. It is no coincidence that Manchester is pressing ahead with the integration of health and social care, while other areas are finding it more difficult. It will also be harder for the Government to pass political accountability to local government for taking the difficult decisions required to create more specialised services, which involves closing popular facilities.

In addition, foundation trust boundaries are likely to be fluid if, as the Government wishes, more successful trusts continue to take over less successful ones. This would make it hard to organise NHS combined authorities around trust boundaries.

Of course, making STPs statutory bodies would require primary legislation. There will be reluctance to pursue further primary legislation on the NHS so soon after the Health and Social Care Act 2012, so Simon Stevens’ aspiration may remain just that for some time. This may be welcome; the STP model is as yet untested, and there are several issues to be resolved before cementing them into place – in particular, further thought needs to be given to how connections to local authorities can be reinforced.

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