Clause 23 - Financial responsibilities of integrated care boards and their partners

Health and Care Bill – in a Public Bill Committee at 4:45 pm on 16 September 2021.

Alert me about debates like this

Photo of Justin Madders Justin Madders Shadow Minister (Health and Social Care) 4:45, 16 September 2021

I beg to move amendment 53, in clause 23, page 35, line 14, at end insert—

“(5) NHS England must publish guidance on the means by which an integrated care board, NHS trust or NHS foundation trust which believes its capital resource limit or revenue resource limit risks compromising patient safety may object to the limit set.”

This amendment would introduce an objection mechanism when an Integrated Care Board, Trust or Foundation Trust believes its capital resource limit or revenue resource limit risks compromising patient safety.

Photo of Julie Elliott Julie Elliott Labour, Sunderland Central

With this it will be convenient to discuss the following:

Clause stand part.

Clause 24 stand part.

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

With this amendment, we are probably having another bash at the debate we have just had to some extent, but we are also making an important point about patient safety.

The amendment will insert a new line in clause 23 to require NHS England to publish guidance on how an ICB, trust or a foundation trust may object to any revenue or capital limits that are set if they believe such a limit risks compromising patient safety. I hope Members will see why we have tabled the amendment. The previous Secretary of State made patient safety one of his biggest priorities and we all know the history and the various scandals that were the origins of that. Patient safety remains a huge challenge in the NHS. It is an ongoing battle. We are still seeing about 30 never events every month, according to the most recent data. Of course, many of those will be attributable to individual human error, but even that can overlook systemic challenges that can contribute to mistakes of that nature being made: workload brought about by staffing challenges, be it vacancy levels or high turnover; or actual physical challenges with equipment or buildings. They can all play their part in undermining patient safety.

The amendment aims to ensure that patient safety is central to all considerations, not an afterthought after the finances have been dealt with. It also plays into the mystery about where exactly the buck stops, which, I am afraid, despite the Minister’s best efforts, we are still no nearer to solving. We still think, from what we have heard, that ICBs will be passporting down to trusts their allocation from NHS England, as has previously been performed by CCGs. If that is not the case, however, what happens if they rob Peter to pay Paul, taking cash away from one trust to bail out another? What if they both end up saying that patient safety is at risk? We will then have three different bodies in disagreement and patient safety possibly being compromised. Who decides then? Who is the arbiter? Who makes the probably invidious decision of deciding where resources go? It may be that the answer is the Government would ensure that NHS England found enough resources to avoid that, but that is not in the Bill.

I am sure the Minister will say that such a scenario is very unlikely, but I refer him to the Health Service Journal article this morning, headlined “Everything up for grabs”. Now, that sounds like a furniture store’s bank holiday sales promotion, but it is in fact an article on the current financial position of the NHS. It quotes senior sources, including directors of NHS England, who say that its officials will now need to review budgets and service priorities to decide which could be met. The article goes on to say that several senior officials and close partners of the sector told the Health Service Journal that they thought that key long-term plans were now unlikely to be met given the lost time, additional demand after covid and other pressures from the pandemic.

NHS England officials will now consider whether they can bid for more Government funding, where they can find savings and what efficiencies they can expect from local NHS providers, whether to try to meet targets despite the circumstances, or whether to set out to Government publicly which objectives they cannot meet. One NHS England director said—this is where the headline comes from—that they were concerned their budgets would be cut and that, “Everything is up for grabs.” A different director said it was doubtful, for example, that the long-term plan target and Government manifesto promise to increase the number of GPs by 5,000 could now be met.

The article also says that trusts are expected to be asked to plan to make unrealistic efficiency savings of 1.5% in the second half of 2021-22, which is likely to be confirmed in imminent NHS England guidance. A substantial efficiency ask is also now likely to be set for 2022-23. I do not know if the Minister will be able to comment too much on that, but it does draw attention to NHS England effectively bypassing ICBs and telling trusts what their budgets are. That does not seem to sit very well with the rhetoric or indeed the wording in the Bill. If the requirement to find 1.5% of efficiency savings is accurate, it would be a tall order given that funding settlements have consistently lagged behind cost pressures for over a decade now. It is all very good saying that efficiency savings have to be made, but, as the article says and with the context I have just set out, they are possibly unrealistic.

What we are trying to do with the amendment is avoid any difficulties that such an edict might cause by ensuring there is transparency and an assurance that when those sorts of conversations are had, people at the sharp end are not forced to compromise on patient safety in order to meet unrealistic, centrally set savings targets. I hope that the Minister will understand the basis on which this amendment has been tabled and that he will be able to provide some clarity and assurance that patient safety will not be compromised as a result of efficiency savings that are required of NHS providers.

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

Clause 23 provides for NHS England to set overall system financial objectives for ICBs, NHS trusts and NHS foundation trusts, which must operate with a view to achieving these objectives. This includes the ability to set limits on local capital resource use and local revenue resource use for ICBs, NHS trusts and NHS foundation trusts.

Clause 23 removes the sections in the National Health Service Act 2006 relating to financial duties of CCGs and replaces them with new sections setting out the financial responsibilities of ICBs and their partners. Improving population health requires the breaking down of silos. Traditional financial control focused on individual providers and organisations artificially creates barriers and fragmentation that get in the way of high-quality care.

The new approach will help to break down those barriers by enabling NHS England to set joint system financial objectives for ICBs and partner NHS trusts and NHS foundation trusts, which must operate with a view to achieving these objectives. This includes the ability to set limits on local capital resource use and local revenue resource use for ICBs, and for partner NHS trusts and NHS foundation trusts. NHS England can also give directions to ICBs, NHS trusts and NHS foundation trusts on resource apportionment.

I turn to amendment 53, tabled by the hon. Member for Ellesmere Port and Neston. I am grateful to him for tabling it as it gives us an opportunity to air a number of issues. It would require NHS England to produce guidance to set out a process whereby ICBs, NHS trusts or NHS foundation trusts could object to their capital and revenue resource limits. Although I understand the motivation behind the amendment, which is about ensuring that the NHS has sufficient funds to deliver services safely, I do not believe that it is needed. The ability for NHS England to set system limits is important to enable systems to effectively plan their services and it enables NHS England to meet its obligation on delivering system balance and its broader obligation to taxpayers.

The decision to allocate revenue funding to systems is based on a weighted capitation formula, which produces a target allocation or “fair share” for each area, based on a complex assessment of factors such as demography, morbidity, deprivation and the unavoidable cost of providing services in different areas, meaning that systems will get funding linked to their individual needs. NHS trusts and foundation trusts will be represented on ICBs, so they will play a role in deciding how resources will be allocated within the system. They can raise concerns about proposals, including with regard to patient safety, as part of the decision-making process, although we do not consider that these clauses would put patient safety at risk. Capital allocations already include a funding element to address emergency or patient safety needs, based on planning information from systems. The funding element is intended to be used to address any issues that could arise, including in the context of patient safety.

Furthermore, clause 24 futureproofs the ICB financial duties provisions. It provides for some of the provisions in clause 23 to be replaced and is designed to be commenced at a later date. Once ICBs and their partner trusts are deemed ready to take on greater financial accountability, clause 24 can be used to replace clause 23 with a new joint expenditure limit duty on the ICB and its partner trusts. At a time when it is considered appropriate, the clause will require ICBs and their partner NHS trusts and foundation trusts to exercise their functions in a way that ensures their expenditure when taken together does not exceed their income. The intended effect is that each local area is mutually invested in achieving financial control at a system level, meaning that public funds can be spent in a more sustainable, joined-up and effective way. This should enable a nimbler approach to expenditure where needs across the system can be addressed more flexibly and holistically.

Should unexpected needs for funding arise, there is another safeguard in place to allow NHS services to continue operating safely, as the Department can issue cash to NHS trusts and foundation trusts. For example, if emergency support is needed to address patient safety issues, trusts can apply for additional cash funding to safeguard delivery of care. It is for those reasons that I invite the hon. Member for Ellesmere Port and Neston to withdraw his amendment. I commend clauses 23 and 24 to the Committee.

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

I do not know whether it is too late on a Thursday afternoon, but I did feel like I had wandered into an episode of “Yes Minister” there. I will not press the amendment to a vote, but I will read the transcript of what the Minister has said with some care over the next few days. I am not entirely clear that he has addressed the central points that were made, but we will no doubt return to this at some point anyway. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 ordered to stand part of the Bill.

Clause 24 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Jo Churchill.)

Adjourned till Tuesday 21 September at twenty-five minutes past Nine o'clock.

Written evidence reported to the House

HCB71 Care Quality Commission

HCB72 Dr John Holden, Chief Medical Officer at the Medical and Dental Defence Union of Scotland (MDDUS)

HCB73 Allied Health Professions Federation

HCB74 Nora Everitt