UK: Health And Social Care Bill

Last Updated: 16 February 2011
Article by Nick Maltby

On 19 January 2011, the Government introduced the Health and Social Care Bill to the House of Commons. The Bill received its second reading on 31 January. The Bill is intended to give effect to the policies requiring primary legislation that were set out in the July 2010 White Paper "Equity and Excellence: Liberating the NHS".

Whether the Bill is the most significant piece of legislation concerning the National Health Service since the National Health Service Act 1946 or simply another in a long line of NHS reforms punctuated by the National Health Service and Community Care Act 1990 (NHS Trusts and GP fund holding), the Health Act 1999 (PCTs and an end to GP fund holding) and the Health and Social Care (Community Health and Standards) Act 2003 (Foundation Trusts) remains to be determined.

Overview

The main elements of the Bill are as follows:

  • The creation of an NHS Commissioning Board (clause 5), the creation of Commissioning Consortia (clause 6) and the abolition of Strategic Health Authorities and Primary Care Trusts (clauses 28 and 29)
  • New provisions on the regulation of health services including new powers for Monitor (clause 51ff), a new licensing regime (clause 74ff), provisions on pricing (clause 103ff) and a new freedom for Foundation Trusts (clause 136ff)
  • The creation of Healthwatch England (clause 166) and the establishment of Health and Wellbeing Boards (clause 178ff)
  • The abolition of the General Social Care Council and the taking over by the renamed Health and Care Professions Council of its functions (clause 196ff)

Commissioning

At the heart of the Bill is the shift of responsibility for commissioning from Primary Care Trusts to an NHS Commissioning Board overseeing Commissioning Consortia regulated by it. The NHS Commissioning Board will oversee the Consortia. At the start of each financial year the Secretary of State will publish the "mandate" setting out the objectives of the Board for that financial year, which the Board must then seek to achieve, and the amount of money allotted to the Board, which the Board is expected to work within. The Board has a number of general duties including to improve the quality of health services and to innovate. The Board will publish a Business Plan at the start of each year and an annual report at the end. The Secretary of State may direct the Board if he considers it has failed to discharge any of its functions.

Commissioning Consortia will be bodies corporate with the power to enter into agreements and to acquire and dispose of property. They will have a constitution, which may be prescribed by regulation. All general practitioners will be obliged to be members of at least one Consortium. They will have an accountable officer and may have trustees and will be subject to duties enforceable by the Board, including to improve quality and to reduce inequalities. The Bill provides for Consortia to exercise their functions on behalf of other Consortia and with Local Health Boards. It is envisaged that the Board will issue guidance on such matters as payment and the discharge of Consortia' commissioning functions that the Consortia will have to have regard to. At the start of each year each Consortium must issue a plan setting out how it proposes to exercise its functions and at the end of each year it must produce a report showing how it has discharged its functions. The Board will conduct a performance assessment of each Consortium in respect of each financial year, which may lead to intervention.

The Bill contains provisions for the transfer of staff and property in connection with the establishment or abolition of a body. While both the Board and the Consortia will have power to acquire and dispose of property and employ people, given the lack of contiguity between the Consortia and the PCTs they replace, the application of TUPE will be interesting and there will be difficult issues to resolve.

At first glance, these are weighty provisions rather than ones that cut GPs free. Consortia are heavily regulated health care bodies with powers and duties similar to those of the organisations they replace. The work of the NHS Commissioning Board will be arduous especially if funds are short. One is reminded of the aftermath of the Health Act 1999 when a large number of PCTs were created, which were later slimmed down through merger. There is little overt recognition in the new provision of the value of the experience of clinicians within Foundation Trusts in commissioning services. Whether a similar effect might have been achieved by a re-organisation of the board membership of PCTs to include a majority of GPs and clinicians must be asked.

There is also the question as to how Consortia might go about procuring services. While contracts between Consortia and Foundation Trusts are deemed to be "NHS Contracts", the implications of the new regulated market for health care services is that any licensed provider will be given the opportunity to bid to provide a service. While the procurement rules have been pushing in this direction for some while, this has always been resisted. However, the practical need to let other bodies in is likely to lead to a shake up. On the other hand, with some of the larger FTs providing more than 1000 services, it is far from clear how this can work.

Regulation of health services

While the changes to commissioning organisation may be less radical in practice than trailed, the opening up of the NHS market to third parties means a thorough review of how health care is regulated. There are several elements to this:

  1. Monitor's role will be changed to one of economic regulator of the whole of health care and with a diminished role in respect of Foundation Trusts.
  2. Anyone who provides a health care service will in future need to be licensed by Monitor. NHS Foundation Trusts will be treated as being duly licensed. Monitor will publish the conditions that apply to each licence. Monitor's powers will include enforcement powers in relation to the new licensing regime.
  3. There will be a degree of price regulation: Monitor will be responsible for publishing a national tariff for health care services, which will set out how the price for each service is to be determined. It is unclear at this stage to what extent the prices will be maximum prices (so competition can take place below the ceiling) or fixed per unit prices.
  4. Foundation Trusts will be substantially freed from regulation by Monitor and will be given new freedoms including the abolition of the private patients cap allowing FTs to compete with the private sector. NHS Trusts will cease to exist from 1 April 2014 with all NHS Trusts becoming Foundation Trusts. One aspect of this, which may prove problematic for FTs pursuing PFIs is whether the Secretary of State will continue to provide a Deed of Safeguard: the Bill's direction of travel suggests he will not.
  5. Health care services will be subject to regulation under the Competition Act 1998 to reflect the new-found contestability of the market, raising concerns that assistance to Foundation Trusts may constitute state aid (hence the shift to loans).

One aspect of contestability is that providers may fail. Part 6 of the Bill provides for the introduction of an insolvency regime for Foundation Trusts based on the Insolvency Act 1986 and the Companies Act 2006. The health special administration regime is also introduced as a process to ensure the continuity of services.
The private sector has been waiting for the dawn of an independent market in health care provision for some time.

While much remains to be resolved, it does appear that we may have finally reached this point. What is likely to follow will be unsettling for some, such as Foundation Trusts, and be the source of opportunities for others. However, it should be noted this will remain a heavily regulated market where the scope for private equity to invest will remain limited. As was seen in Wyre Forest in 2001 with the election of Richard Taylor, Governments of any hue let local hospitals fail at their peril.

Localism

While the shift to Consortia provides some of the Bill's local credentials (albeit in a system which is strongly driven from the centre), the Bill provides for the establishment of a Healthwatch England committee of the Care Quality Commission and for Local Healthwatch organisations in the area of each local authority to enhance this theme.

The committee will exercise certain functions on behalf of the Commission including to provide the Secretary of State, the NHS Commissioning Board, Monitor and local authorities with the views of people who use health and social care services and the views of Local Healthwatch organisations on the standard of the provision of health and social care. The committee will produce an annual report, which will be laid before Parliament. At the same time, local authorities must establish a Health and Wellbeing Board for their areas, which will include representatives of the Local Healthwatch Organisation and the local Commissioning Consortia. One of the functions of the Boards will be to encourage persons who arrange the provision of health and social care to work together in an integrated manner. Given the changes envisaged by the Localism Bill, these changes go less far than might have been hoped as there might have been a role for local authorities as commissioners to commission health too (rather than simply have the Consortia turn up to their meetings). A democratic deficit in health therefore remains.

The regulation of social care

The Bill abolishes the General Social Care Council and makes the Health Professions Council responsible for the regulation of social workers in England with a corresponding name change to the Health and Care Professions Council.

Costs of implementation

The explanatory notes issued with the Bill give a total cost of the changes to be of the order of £1.4bn. Savings, however, are expected to be in the order of £1.7bn p.a from 2014/15 giving a cost saving of £13.6bn over the decade from 2010/11 to 2019/20 (although it is unclear how these numbers are derived).

Entry into force

No programme has yet been announced for the Bill but it seems unlikely to become law before November at the earliest. It is currently in the Committee Stage in the House of Commons following the Second Reading on 31 January. It has been announced that the membership of the Health and Social Care Bill Committee comprise as chairs, Jim Hood and Mike Hancock and as members, Debbie Abrahams, Kevin Barron, Tom Blenkinsop, Steve Brine, Simon Burns, Paul Burstow, Dan Byles, Stephen Crabb, Nick de Bois, Margot James, Liz Kendall, Jeremy Lefroy, Nicky Morgan, Grahame M. Morris, Dr Daniel Poulter, John Pugh, Jim Shannon, Owen Smith, Anna Soubry, Julian Sturdy, Emily Thornberry, Karl Turner, Derek Twigg and Phil Wilson.

The Public Bill Committee stage is due to end by 31 March. It seems likely from this that the Bill will go to the Lords in May. We will be issuing further Briefings on topics of interest as the Bill progresses.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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