Examination of Witnesses

Health and Care Bill – in a Public Bill Committee on 9th September 2021.

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Richard Murray, Nick Timmins and Nigel Edwards gave evidence.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak 2:01 pm, 9th September 2021

We are going to hear from Richard Murray, chief executive of the King’s Fund, Nick Timmins, senior fellow, policy, at the King’s Fund, and Nigel Edwards, chief executive of the Nuffield Trust. Thank you very much for coming. Could I ask each of you in turn to introduce yourself for the record?

Nigel Edwards:

I am Nigel Edwards. As previously stated, I am the chief executive of the Nuffield Trust.

Nick Timmins:

I am Nick Timmins, a senior fellow at the King’s Fund.

Richard Murray:

I am Richard Murray, chief executive of the King’s Fund.

Photo of Edward Timpson Edward Timpson Conservative, Eddisbury

Good afternoon, Mr McCabe, and good afternoon to each of our witnesses. I am Edward Timpson, the MP for Eddisbury, in Cheshire. I want to start by contextualising the discussion about the Bill, particularly off the back of the pandemic and with regard to the timing of the Bill and the issues that it is trying to resolve, which perhaps have been highlighted even more by the demands and pressures that have come through over the last 18 months. Do you think that this is the right time to be taking forward the principal measures in the Bill, particularly around moving from competition to a more collaborative approach and the integration that it is looking to achieve through many of the measures that we have seen with the integrated care system, board, partnership and so on? I will start with you, Richard, and then we will move alongQ155 the panel.

Richard Murray:

There is obviously a risk with any large-scale transformations, and particularly ones in the NHS, that they will cause too much disruption, and they distract people from the day job. I think that is the clear case against. If I may, I will just say a few words, though, on the case for. The existing system already causes disruption, so there are complicated workarounds; there are procurements being done that do not really need to be done. I would not underestimate the fact that there is a headwind in the system from trying to apply the 2012 legislation. There was a real head of steam, coming through covid, of people working together, trying to make this system work, still having to deal with some of those workarounds and still having to deal, sometimes, with doing things in an emergency that you probably would not be able to do in peacetime, so to speak.

The key thing is to try to keep the disruption to a minimum—wherever possible, and particularly for staff, to keep that degree of unnecessary churn down. I have to say, unfortunately, the NHS is quite good at doing large-scale churn without too much benefit. But I think on balance that as these changes are already under way and there are problems with the previous system, stopping now would be more disruptive than simply carrying on.

Nick Timmins:

I do not want to take up a lot of time. I particularly agree with that last remark: stopping now would be worse than carrying on. A lot of this is already happening. We have been merging clinical commissioning groups ever since the new system came in in 2012. It is sort of completing a journey. You may not be entirely happy about all the arrangements around the different sorts of board and what have you, but to stop now, I think, would be not sensible.

Photo of Edward Timpson Edward Timpson Conservative, Eddisbury

Q So it is a natural progression from what is happening practically.

Nick Timmins:

In large measure.

Nigel Edwards:

I do not have anything to add, given the time. I agree with everything that has been said.

Photo of Mary Robinson Mary Robinson Conservative, Cheadle

Do you have any thoughts on the new HSSIB and its powers, which are set out in the Bill? I know that you are likely to be probed further on this later, but do you have any thoughts on how it will be implemented, the investigatory powers it will have and the safe spaces and protections it can give? Do you have a view on how it will sit with existing legislation on the protection of whistleblowersQ ?

Richard Murray:

I am afraid that is not an area we have focused on—sorry.

Nigel Edwards:

Likewise.

Photo of Mary Robinson Mary Robinson Conservative, Cheadle

Nice and easy—thank you.

Photo of Karin Smyth Karin Smyth Labour, Bristol South

I have three obsessions with the Bill, some of which I have shared with you. First, on local governance and accountability, I have tabled an amendment to follow the logic of the Bill and make accountability local rather than going via some obscure route to the Secretary of State.Q

Secondly, there is the treatment of capital in the system and how local communities, healthcare systems and trusts will be able to develop estates and capital planning. The third obsession has completely eluded me for the moment. It is generally about the tariff—that may be your subject, Mr Edwards—and how the vague nod to a new tariff framework in the Bill is working out. You may be more privy than the Committee to the details on how that might work out; it is about the flow of money within the system. Would you like to start, Mr Edwards, on governance, tariff and capital?

Nigel Edwards:

Richard may be able to give a more up-to-date account on capital. You will be aware that the mechanisms for the allocation of capital in the NHS are a little arcane and somewhat out of date. There have been various attempts to update the mechanisms. Richard has been looking at this and can perhaps tell us more, but my impression is that it will flow following the allocation formula for revenue. There will still need to be a tariff. Despite the fact that there is integration, a tariff allows you do to a number of useful things. Certainly, patients will flow between different ICSs, so there will need to be a mechanism to account for that. It is also quite a useful budgetary tool, so in terms of financial control, it is probably quite important that the tariff is maintained.

We have been promised guidance on the flow of funds more locally, but we have not yet seen it. My presumption is that there will be a negotiated process rather than just a straight use of the tariff in the way that we have seen up until now, with variations on block contracts, maybe using the tariff—or, more likely, the historical budgets—as the starting point. The business-as-usual capital, as opposed to major capital projects, remains as it always has been. Although it is subject to some review, at the moment I do not think a major change is proposed for it, but Richard probably knows better.

Nick Timmins:

I have nothing particular to say about capital. I do think you need to retain a tariff—not for everything, because in some areas of healthcare it just does not work, but for electives and those sorts of procedures. That has two advantages: it means you need to understand your costs to construct the tariff in the first place so it is a driver of efficiency, and, equally importantly, it gives you a benchmark price with which to negotiate with the private sector whenever you do outsource some operations and procedures. You are able to say, “This is what is costs us, so this is what we’ll pay you.” If you do not have that, you are subject to a seller’s market and can be charged what you like because you do not know what your own costs are.

Richard Murray:

On the flow of money, we are expecting revenue allocation to ICSs based on the current formula, trying to reflect need, inequalities, deprivation and age. The uncertainty is then how much those ICBs will allocate down to place level on a local government footprint. The expectation is that quite a large proportion of that funding—general practice, community services, quite a lot of mental health, and some acute services, too—will go down to that level, but none of that is in the Bill. The allocation to ICSs stops at that point, and as has been said, you need a payment mechanism to get the money off what are, effectively, commissioners and over into providers.

The changes to tariff are mostly about flexibility, so it should still be transparent; you should still be able to work out what people are being paid, which I think is important, and you should be able to benchmark between different providers, but instead of paying for each operation and each widget bit by bit, you can have formulas that try to reflect fixed costs. You can do it in a different way that adds some flexibility into the system, which I think is important when you are trying to bring providers and commissioners into common alignment over where the money is going. Tariffs had the problem of setting them at each other’s throats sometimes, because every time someone was admitted to a hospital you would get another payment, so commissioners wanted to keep it down and providers wanted to keep it up. There is the chance to try to align some of those incentives, but there is still a lot of gap around what actually will go down to place and what will determine it; of course, again, the budgets need to be equitable.

Nigel Edwards:

Richard, if I may, I think a very important point that ought to be made here is that because the allocations will now shift from 100-plus clinical commissioning groups to 42 ICSs, the variations between them will be evened out. There will need to be some way of recognising the fact that within an ICS, you have very different patterns of need, which at the moment are recognised by the allocation formula, but in the future will not be. The money will be received by the ICS, so I think there is a question there. I know that local authorities—and, indeed, GPs and primary care networks—will want to say, “If we are in a particularly deprived area and we have historically had higher funding to recognise that, we would expect that to continue.” There ought to be a line of sight from the national allocation formula based on need to the money that is received by our locality.

Sorry, Richard. I thought you made a really good point.

Richard Murray:

That is absolutely all right. On capital, the Bill does not really change the way that capital works in this system. The only difference is the ability of the Department, through NHS England, to cap the spending of foundation trusts, which they have not been able to do in the past. There are some limits around them being able to do that, but it gives an additional lever at national level. Having said that, the way that capital is working in the system has changed fundamentally already: some capital goes through an allocation system, a bit like the revenue funding, and I am leading a review for NHS England now on how that money flows.

The bit that I think is really uncertain is how the big hospital schemes get picked. That is the bit that looks very different. Obviously, there is a manifesto commitment. There used to be a process by which it was determined whether providers could afford to repay—if they could do it through loans, or if there was a need system. That is now going off in a completely different place, and I think that is the bit that is not quite clear. How does that work within this system? Who gets to choose how those projects get picked, so to speak? That is the big change but, again, it is not actually in the Bill; it is being done under the existing rules.

Photo of Karin Smyth Karin Smyth Labour, Bristol South

But it all has to be in place by April.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

I am really sorry, Karin, but I think we have to move on, because we have about seven minutes left for Back Benchers, and three indicating. Jo Gideon.

Photo of Jo Gideon Jo Gideon Conservative, Stoke-on-Trent Central

WeQ have had a pretty large consensus across a large number of organisations that the Bill is welcome as an enabler. Also, earlier this morning, we had a comment that no Bill has ever changed people’s behaviour. To what extent do you think the Bill will enable people’s behaviour to change, in terms of how partners work together at a local level?

Richard Murray:

It will certainly make it easier. You remove some of the unnecessary impediments that have got in people’s way and pushed them into complex workarounds. It creates a structure through ICBs and integrated care providers to bring people together, so in that sense, it enables these things and makes them easier. However, if I am honest, you could still have NHS England and the Department deciding to run everything through ICBs and making them behave an awful lot like NHS bodies of the past. It enables those things, but the legislation by itself cannot prevent some of the older behaviours from living on. That is why implementation and what happens afterwards is critical, to try to ensure that it delivers on the things that I genuinely think it is trying to do. There is a heavy weight from the past of very centralised control that focuses very much on the independent republic of the NHS. That is the cultural issue that the people who will have to implement this will have to work against.

Photo of Jo Gideon Jo Gideon Conservative, Stoke-on-Trent Central

Q How might we implement the changes that you suggest?

Richard Murray:

I would really ensure that local government is part of this. It is an independent voice, and has already been a useful counterweight to some of those centralising forces, as local government comes closer to the NHS. Ensure that people from the voluntary sector are there. They do not follow the orders that come out of NHS England, so you are putting people directly into the system who carry some of that independence and are looking out fundamentally to their local communities. That really is the strength of some of the ICP structures—that you have those people round the table and, indeed, some of them on the ICB itself. Really invest in that place-level work. That is where a lot of the excitement will come from working with local government, and again with the voluntary sector and primary care. Do not get too focused on the ICS as this interim middle step, because it is quite distant from where a lot of the action goes on.

Nigel Edwards:

It is not just upper tier local authorities that have an important voice in this. I think that Richard is right: a lot of the most interesting and bigger changes are likely to happen at the place level. It is probably the case that quite a lot of legislation has not really affected how patients are cared for or how professionals work. In some senses, that is not a bad thing. I think this does remove some of the behavioural oddities of the hybrid market and other systems that we had.

It will introduce some other hazards, in particular—Richard sort of referred to this—the slight danger of ICSs becoming inward looking, and some organisations, and the independent and voluntary sector, being excluded and not feeling that they have a voice. The challenge that local authorities can bring to that will be important, as will behavioural change from NHS England and some of the regulatory machinery, but you cannot legislate for that. That is a cultural change that is probably beyond the scope even of legislators.

Nick Timmins:

Yes, and you can see that in evidence that you have already heard about the construction of the board and the partnership. It seems clear to me—you have heard from the Local Government Association—that some local authorities were happy to join a single board and others felt that that was too much of a loss of sovereignty, which is why we have ended up with this slightly complicated system of an NHS board and a partnership board. Probably, in an ideal world, it would have been better if it was one, but you have to live with what people are prepared to do.

Photo of James Davies James Davies Conservative, Vale of Clwyd

Nigel Edwards, you mentioned the word “reconfiguration” earlier. In an ideal situation, from your point of view, Q how would you see a reconfiguration decision being reached, and how do you balance that with the need and expectation for ministerial accountability?

Nigel Edwards:

The current system dates back to Andrew Lansley, who set up four tests. Do not ask me what they are. I can look them up, but I cannot remember them. However, they were good. They involved local people and clinical support. You had to make an evidence-based case. Then there was a process that involves local stakeholders, and then there was the opportunity for review by the Secretary of State and referral by local authorities and the independent reconfiguration panel, which has been a remarkably longstanding innovation, given the way that NHS organisations are formed and then abolished. It has done, I think, a very good job.

The current system seems to me to work quite well. The Secretary of State still has a say, particularly around controversial decisions, but they do not get sucked into every small reconfiguration and change. You also do not have a point where there is an opportunity for local participants to say, “I’m not going to contribute to this conversation any more. I’m going straight to the top,” and undermine people working together locally. I am of the view that the current system works quite well. I think we said to the previous Secretary of State, “You need to be really careful what you wish for. You may think that your intervention is going to help to move things along and improve innovation. It’s quite likely, from both previous experience and experience in other similar types of systems, to have the opposite effect.”

Richard Murray:

I would not disagree with anything that Nigel said. Also, the clauses in the Bill as they stand at the moment are really, really unhelpful. There may be things you could do to make reconfiguration easier, but I think they would be working around the margins of what Nigel said. It would not be wholescale intervention without limit by Ministers in local decisions—that would mean any change, of any service, could go up to the Secretary of State. Also, if you need to make an emergency move for an operational reason, you would need to write to the Secretary of State in advance—you kind of think the clue is in the fact that it is an operational crisis. I think that the legislation as drafted would not give Ministers what they want, so I really think it is not helpful at all.

Nick Timmins:

Can I just add to that? I think it is really dangerous for both Ministers and the NHS. Not many people know about the Independent Reconfiguration Panel. It has worked very well. It has dealt with about 80 controversial cases. It quite often suggests some amendment, and the Secretary of State does not have to take its advice, but the Secretary of State almost invariably does take its advice. I think that if we end up with lots and lots of reconfigurations hitting Ministers’ desks, Ministers will come to regret that. If you listen to the views of previous Secretaries of State, they almost always say, “It’s ludicrous we ended up having to make a decision about what was going to happen”—in Nether Wallop or wherever—which was the case before the Independent Reconfiguration Panel was around.

Photo of Chris Skidmore Chris Skidmore Conservative, Kingswood

I want to touch on the King’s Fund’s comments in its own white paper in which it welcomed the Bill’s removal of the “cumbersome competition rules” that were introduced in the 2012 Act; and to discuss some of the consequences Q of competition and why it is welcome that we remove that; and to ask this question. Are there are any unintended consequences from also introducing the duty on the triple aim in commissioning decisions?

Richard Murray:

There are a couple of things around competition. Probably the most obvious one is that it never really worked. A lot of care, particularly urgent or emergency care, is not an area for choice in the first place, so you are already dealing with a fairly specific part of the health service and drawing an awful lot of attention into that one element of the service when a lot of the interest is in care for people with long-term conditions and how you stop overuse of A&E and emergency services. There are lots of examples of things, particularly uncertainty around competitive procurement. Commissioners were anxious about where they stood in law so they used, and probably overused, competitive procurement.

I know from speaking to some commissioners that they sometimes felt slightly powerless to influence the provider side so they would put it out to procurement instead. There was very little sign that all the effort and bureaucracy that went into that really did any good at all. Let us step away from that and enable more co-operative working, to try to get the kind of change that we need for long-term conditions, for the real health conditions that this country faces. I should say that a lot of the academic evidence has found no benefits of competition, so not only was it not a helpful thing, it just did not seem to work—probably reflecting the fact that we have such shortages in this country. Competition works only when there is a meaningful choice.

On the triple aim, you would not want the system to get tied up in a new round of bureaucracy, form filling and ticking boxes, to show that it has duly considered the triple aim. I think it is also important to make sure you do not lose the issue of inequalities from the triple aim. I would not want to exaggerate: does legislating a grand vision make people do things differently on the ground? I think it is helpful to remind NHS providers and others that absolutely they should be thinking about the quality of care; absolutely they should be thinking about value for money and making sure they are efficient. But they also have a duty to the health of the wider population. You can then, through that triple aim, bring the different parties in this system closer together, and I think that for some non-executive directors and for governors, it is quite helpful to know that they are all working in the same direction. So I would not exaggerate the kind of change it would bring, but I think it is a move in the right direction.

Nigel Edwards:

Can we just nuance the competition point? Actually, there were two elements to the competition regime. One was the very formal going out to tender and big, bureaucratic procurements—often resulting in the reappointment of the previous provider at significant expense. But the other component was patient choice—for diagnostics, for maternity and for elective surgery. I think that dynamic has benefits. One of the slightly worrying things in some of the plans produced by the ICSs’ predecessors—the STPs or strategic transformation partnerships—was a wish to “repatriate” work, as they called it, which meant to bring work back from providers outside their patch into their own. That was not necessarily a good thing; patients should have the opportunity to have a choice of provider and, particularly in the case of specialised services, one would be concerned about people saying, “Let’s grow our own services locally,” rather than, “Let’s use centres of excellence.”

The maintenance of patient choice, and ensuring that ICSs do not act to limit patient choice, particularly for those patients living on their margins, is quite an important dynamic; almost all ICSs have borders with someone else, and patients naturally flow across them. People want to be able to make choices, because they have an existing relationship with a provider or because they have a relative who lives nearby and could care for them while they are there. There is international evidence that that dynamic has a beneficial effect on providers’ behaviour.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

I think we had better move on. Dr Whitford?

Photo of Philippa Whitford Philippa Whitford Shadow SNP Spokesperson (Health and Social Care), Shadow SNP Spokesperson (Europe)

I will start with you, Richard, on tariffs. I have a background in the NHS. I and colleagues south of the border know of people doing outreach work from a hospital trust into a community. They developed services that were successful in reducing admissions, but sometimes the service was shut down precisely because the hospital’s income disappeared. I will come to your colleagues, but are you comfortable that the funding going into the ICB will give that integrated vision of how money is spent, to ensure that people who can be supported or treated by a community project do not end up in hospital just because that is the way the ICB generates moneyQ ?

Richard Murray:

That is a very fair point; it did create that tension within the system, because more activity was what made you successful and gave you your bank balance. The flexibilities that the Bill gives to step away from those more mechanistic tariffs that pay for activity should enable that, with two caveats. First, much of this will come in guidance from NHS England about exactly how this will work; there is clearly not enough detail in the Bill to do that, and why would there be? That still needs to be worked through.

Secondly, it is quite complicated to get right; this is a very difficult thing to do, and one of the pointers we see in some other countries, such as New Zealand, is a focus on everybody working together and not getting too caught up in trying to divide up the pie between competing parties. Again, that is where things such as the triple aim may help to keep people’s minds focused on the purpose, which is good quality care, value for money and a healthy population. There are more flexibilities in this system to do that, so that we do not get the kind of perverse incentives we have seen in the past.

Photo of Philippa Whitford Philippa Whitford Shadow SNP Spokesperson (Health and Social Care), Shadow SNP Spokesperson (Europe)

Q Do you think there will be a friction where, say, a foundation trust has had good financial management and a budget that is not too bad is asked to work with one that has been struggling—particularly in social care, where we are looking for integration?

Richard Murray:

I think there will need to be a change in culture here; it is almost inevitable that if you look within different ICSs, you will find extremely financially successful institutions next door to some that are deeply troubled and that are facing problems in community services, general practices and other services. There will be a need for a culture change, but one that does not lose sight of the fact that you want organisations to be well run. You do not want to end up with some of the weaker organisations thinking, “I shall now pass this problem on to my big brother down the road who has very deep pockets.”

You need to try to maintain the right incentives and support for institutions to run themselves well, to keep the value-for-money element of the triple aim, while also being able to move money around the system without getting caught in silos such that the acute trust has all the money and mental health does not. We need to be able to begin to move money across those different boundaries, which the old financial system did not help us to do.

Photo of Philippa Whitford Philippa Whitford Shadow SNP Spokesperson (Health and Social Care), Shadow SNP Spokesperson (Europe)

Q Obviously, the idea is that the ICBs would have that vision and power.

Richard Murray:

You would hope that the ICBs would have that power and the ICPs would try to set the direction. For many of the really tricky pieces between community services, general practice and social care, it is probably more at place; the ICBs are often so big that they are unlikely to get directly involved in those decisions. They can set the framework and try to ensure that in some sense it is working as a whole, but many of those decisions will come down at place level.

Nick Timmins:

I have little to add. This is really an issue of behaviour, culture and financial flows. It is not something that the Bill can lay down or dictate.

Nick Timmins:

The tariffs definitely caused some problems. Changing the way the tariff is used is very important, but that does not mean that you should get rid of it entirely.

Nigel Edwards:

I agree with all of that. This gives a vehicle that will allow many of those perverse incentives to be removed. People found ways of working round them previously, but this simplifies things. Richard made the point that it is definitely the case that some trusts, particularly acute trusts, have done very well out of the tariff. They will find it quite painful to make the adjustment, but that is not a reason for not making the change.

Photo of Philippa Whitford Philippa Whitford Shadow SNP Spokesperson (Health and Social Care), Shadow SNP Spokesperson (Europe)

Q Perhaps I can start with you on this question. We obviously hear about the ICB, which appears to be the power base, and the ICP, which is more flexible and will put forward an agenda and an idea. How do you think the power balance or imbalance between those two is going to work?

Nigel Edwards:

I have sat with a number of different geographies and tried to work that out, and it is probably going to be different in different places. Some of the ICSs are quite geographically coherent and have a lot to do with each other. For others, such as Cheshire and Merseyside or BOB—Buckinghamshire, Oxfordshire and Berkshire West—there is less in common at the strategic level. It will be quite different in different places, particularly where there are powerful upper-tier local authorities within ICSs. They will want to have a strong voice at the place level.

One of the virtues of the legislation as currently formulated is that it allows some flexibility, and it allows people to tailor some of those relationships to fit their local geographies. But I would see the partnership part of this having a very important role in shaping the overall strategy. For quite a lot of people, the risk is having too many meetings and too many partnerships. It is very important that the partnership board sets the agenda and then the places and the ICB get on with it.

Photo of Philippa Whitford Philippa Whitford Shadow SNP Spokesperson (Health and Social Care), Shadow SNP Spokesperson (Europe)

Q So the challenge you see is more about things like footprints and boundaries making it clunky in some areas. It is about trying to get that right.

Nigel Edwards:

Yes. The NHS has always had a bit of an obsession with neatness and uniformity. If there is one thing that I have learned from working with these different ICSs, it is that they are very different in terms of their physical, political and psychological geography. Trying to fit a standard model of governance to them would be a mistake. We need to hold them to account for how well they are implementing their plans and how far they are improving outcomes for their population. We need to know whether they are making the best of the money that we are giving them, rather than whether they are conforming to a centrally designed governance model that will work on average, and that will therefore work nowhere.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

I think we had better move on now. I call Justin Madders.

Photo of Justin Madders Justin Madders Shadow Minister (Health and Social Care)

Good afternoon, and thank you for coming today. You will have heard the Prime Minister’s statement on Tuesday. He referred to a White Paper on integration. As the Bill is primarily concerned with integration, perhaps you could save him some time by pointing out the deficiencies in the Bill—in terms of integration—that need to be included.Q

Nigel Edwards:

This took us all somewhat by surprise, I think it is fair to say. Richard may have had a different briefing from the Department of Health and Social Care on yesterday’s announcement. I picked it up on reading the document; it was not pointed out to me. I think I read it slightly differently. It seemed to me that the plan was likely to be a formalisation of all the activities that are currently going on, rather than a new direction of policy, but I am probably the wrong person to be asking about that. If it is not that, it would not be very helpful.

Richard Murray:

One of the things the documentation speaks about is the planning of the health and social care workforce. You asked where I think the Bill is deficient. One example is its inability to help with the very poor track record, over quite a long time, in planning the health and social care workforce—hence all the problems that we have with the workforce right now. There is a nod in the White Paper to that. It may only be that the crossover between those two workforces is not the fundamentals of the numbers that go through them.

Otherwise, I really hope that the White Paper is not about further legislative change. It might be about setting out, for example, the outcome measures that would really work for an ICS, meaning that it will cover both critical issues for the NHS and critical issues for health, public health and social care, to make sure that you have that rounded and meaningful measure so you know who is doing well. If it is another round of legislation, I must admit that I would pause before saying whether that is a good idea, with the exception of the workforce issue, which remains the critical factor here.

Nick Timmins:

The workforce does need to be tackled—it is just a glaring hole in all this. The NHS has plenty of policy at the moment; it has had an eight-year drive towards better integrated care—that is what the Bill is focused on—and a lot of that will not come through legislation, beyond what is in the Bill.

Photo of Justin Madders Justin Madders Shadow Minister (Health and Social Care)

Q Nigel, can I ask you a specific question about tracking where the money is distributed within an ICS, which you referred to earlier? You have already mentioned the Cheshire and Merseyside ICS, which my constituency falls within—what was 12 CCGs moved not so long ago into one massive beast, for want of a better description. If I wanted to hold someone to account on whether the money was distributed on a fair and equal basis consistent with historical distributions, who would I speak to and who would be responsible for that?

Nigel Edwards:

Each ICS is supposed to have a chief finance officer—a director of finance—and an accountable officer. That is the starting point. I think the question to ask them would be to what extent they are spending money in a way that reduces health inequalities and improves outcomes in an equitable fashion—I think they would want to do that. One of the things that has very much struck me in my conversations with ICSs—this is very much influenced by local government, which will be a powerful advocate for this, as will primary care networks—is that quite a lot of people will be scrutinising this. The person to ask who is clearly accountable for answering that question is the accountable officer of the ICS.

Of course, ICSs do not have a legal obligation to distribute money below place level. You might not want to do that, because there is a need to be flexible, and sometimes you might want to spend more in a particular area if there is a sudden strategic priority, but over the long term, the expectation is that those accountable officers should be able to demonstrate that they are spending money in ways that relate to the objectively assessed needs of their populations.

Photo of Justin Madders Justin Madders Shadow Minister (Health and Social Care)

Q Thank you. I have a question for all three of you. The Secretary of State is seeking some quite broad powers of direction. What problem do you think he is trying to fix by giving himself those powers?

Nick Timmins:

I think that is exactly the right question to ask. What have Ministers not been able to get the NHS to do without the powers of direction that he is seeking? When they were presented, it was as though the NHS was somehow unaccountable when, as I am sure you all know, Ministers can tell the NHS what to do through the mandate. The difference in the current system is that NHS England has to agree that what it is being asked to do is reasonable. If NHS England does not think it is reasonable, resourceful or doable, it can object, and the Minister then has to come to Parliament and explain why he is, in effect, instructing the NHS to do something. A measure comes before you and is subject to a negative resolution. If someone rejects it, it can be debated, so there is a perfectly good mechanism there right now. I think the really, really important question is: what are Ministers not able to get the NHS to do that means that they now feel the need for new powers of direction?

Nigel Edwards:

I have no answer to that question.

Richard Murray:

If the reason is not made clear, you end up starting to get worried and suspicious: “Are they trying to direct money towards one part of the country rather than another and overturning the allocation mechanism? Do they want powers to intervene in procurements?” Those are all the things that you would not want them to do which, to be honest, health Ministers generally have not done anyway. Even when they had the powers, they tried desperately not to get involved, because it is extremely poor governance and extremely poor value for money. However, without that explanation of why they want it, the temptation is to start worrying about what they want the power for.

Some of the behaviours could be governed through the framework agreement, or they should be able to be. You have the mandate that sets direction over the short to medium term, but the framework agreement also sets out the way NHS England should work with other parts of the system, so there are other things that you can use within this system. As it stands, and if it stays as it is now, to provide comfort to people, the temptation is to start listing the things that Secretaries of State should not direct—they should not direct allocations to individual parts of the country; they should not interfere in procurement decisions. You end up with quite a long negative list, but I would probably rather have a negative list than no list.

Nigel Edwards:

The problem with negative lists, of course, is that you will forget something.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

I had better move on at this stage. I am really sorry, Nigel. Minister?

Photo of Edward Argar Edward Argar Minister of State (Department of Health and Social Care)

Q Thank you, Mr McCabe. I will only ask the one question, because I am conscious of time and keen that Opposition Front Benchers have their time. My question goes to the heart of this, and I am afraid it is a subjective question, but with all your expertise in this space, your answers will be instructive. In framing this legislation, we sought for it to be both evolutionary in reflecting the changes that are already under way, and permissive rather than prescriptive. Do you feel we have struck the right balance in terms of permissive versus prescriptive? If not, where is that balance missing? Shall we start with Nigel, and then work along?

Nigel Edwards:

I think we have shared our anxieties about the reconfiguration and direction powers. In terms of what this does to the organisational architecture, it seems to me to strike the right balance between permissive and directive.

Nick Timmins:

I would echo that. I have major reservations about the new powers of direction and, I think, major reservations if you build in reconfiguration service changes. The good thing about this—it has been the good thing about the development of the integrated care system so far—is that it is quite flexible. That is unusual in the NHS’s history: we tend to come up with very prescriptive solutions for what the system should look like everywhere, when in practice the circumstances are different, so I think the balance is pretty good.

Richard Murray:

You could easily criticise the degree of permissiveness; you could criticise the degree of direction in there. The question should be, “Can anyone come up with a better one?” We have not been able to do so, so I think it is a balance well drawn. Of course, a lot will then rest on the behaviours that are shown after the Bill is through—whether people live up to that kind of core belief around that permissiveness and the freedoms that have been given.

Photo of Edward Argar Edward Argar Minister of State (Department of Health and Social Care)

Thank you all very much. No more questions, Mr McCabe.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

We have time to squeeze in one very quick one, if anyone has something else to ask.

Photo of Justin Madders Justin Madders Shadow Minister (Health and Social Care)

Q Thank you, Chair. Do you see any risks attached to the flexibility the Secretary of State has given himself with the mandates?

Richard Murray:

I think a longer-term mandate is a better thing. The idea that each year, sometime between December and March, you can set a different expectation on the NHS is operationally unreal for the system. They cannot do it, so I think we want to get back to something where you set out a clearer medium-term objective for the things you want the NHS to achieve, whether that is reduced waiting times or better health, and allow them to try and work towards it.

Budgets on that basis would also be incredibly helpful—if you are working in the service not knowing what capital you might have two years down the line and what revenue you might have. I think there is a real chance to do that in the spending review. That is a move in the right direction; we just have to make sure that if the budgets are still set on an annual basis, you do not get a diversion between what it is you have been asked and the budget then being suddenly moved on that annual basis. I would strongly encourage the Government to also try and set multi-year settlements for the NHS, as used to be done, so that people can plan at local level.

Nick Timmins:

If memory serves me right, the original idea of the mandate was a rolling three-year mandate. You set the objectives of the NHS and what you want it to achieve, and you can have a little review of it each year, but it is clear. I probably should have said that if the money was also planned on the same basis, that would help no end.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

That brings us to the end of our time. I thank our witnesses very much.