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Give the NHS its devolution revolution, says think tank

Press release

A report published today by think tank Localis, supported and sponsored by KPMG, makes the case for a step-change in devolution within the NHS or risk its long-term sustainability.

The report argues that much more NHS funding should be raised and controlled locally with local NHS and local government leaders devolved total control of their entire local health budget. Correspondingly local areas should be increasingly free of central government control and direction, with greater local flexibilities.

To provide the framework for this ‘devolution revolution’, Localis recommends that areas across the country negotiate health devolution deals with Government that empower local leaders to drive integration, transformation and financial sustainability in their local health and care economies. Following in the footsteps of Greater Manchester and building on Sustainability and Transformation Plans, it is recommended that as part of these deals:

  • The local area’s departmental health budget is fully devolved with local leaders accountable for its control and distribution. Local areas should commit to full open book accounting between providers and commissioners.
  • Local areas are devolved a number of revenue raising measures including:
    • The power to increase the social care precept above 2%
    • The power to establish devolved health taxes
    • The opportunity to rationalise all local NHS estates into one body

The report includes a survey of over 100 key NHS and local government stakeholders which finds that:

  • 78% of respondents said devolving control of the total local health budget would make a positive difference to making their local health and care economy better, integrated and more sustainable over the course of this parliament (20% said a small positive difference, 29% said a medium positive difference and 29% a large positive difference)

The report has attracted cross-party support

The Mayor of London, Sadiq Khan, said: “This report is further evidence that devolution is crucial for London, and all our cities and neighbourhoods, to take back control of their own destinies. Providing NHS leaders with greater flexibility and ownership over their services will help them to better meet local demands and manage the health of their communities. London has become the main tax generator for the whole country, and putting this money back into the capital’s health services and giving them better powers will help create an integrated, sustainable NHS to be proud of.”

Norman Lamb, Liberal Democrat spokesperson for health and former Minister of State for Care and Support, said: “This report is a welcome contribution to the debate on devolution, setting out an ambitious liberal vision for the health and social care service. The centralised structure of the NHS has too often stifled innovation, efficiency, and local accountability.  Even though most people now agree that decisions should be made as close as possible to the people they affect, we haven’t done enough to apply this principle to our most treasured public service.  The Greater Manchester agreement was a landmark achievement, but genuine devolution would place greater trust in local areas to raise additional revenues rather than simply devolving the management of Whitehall block grants.

I am clear that in a National Health Service, patients must have the same right to access treatment on a timely basis wherever they live – and the absolute imperative of achieving genuine equality for those who suffer from mental ill health, through comprehensive maximum waiting time standards, cannot be compromised. They can be bettered but not undermined. However, given the growing demands on health and care services, there is a powerful case for giving local areas more control over service design, health and care integration, and revenue-raising powers. This report makes important suggestions as to how we might take this forward.”

Dr. Dan Poulter, MP for Central Suffolk and North Ipswich said “”Devolution presents great opportunities for the NHS to deliver services that better meet the needs of the local populations that it serves.  However, it will require longer term and more sustainable funding settlements and staffing structures.  Giving local areas greater control over health and care provision has great potential to help services evolve in step with patient needs.”

Stephen Dorrell, Chair of NHS Confederation said: “By taking the opportunity to embed the NHS more closely in the full range of local public services, and harnessing the natural impatience of voters, the report sets out an agenda which provides a key response to the health policy challenges we face. The report is also extremely timely. At a time when it seems that discussion about the implications of Brexit borders on an obsession, it argues that local leaders to step forward to fill the vacuum.  The message is clear. Civic leaders should not wait for permission; they should act now and seek forgiveness later – in the unlikely event that it proves necessary.”

Launching the report

Jack Airey, author of the report and Interim Chief Executive of Localis, said: “As our research makes clear the centralised nature of the health service is neither sustainable nor desirable in the 21st century. The NHS should therefore be front and centre of the next round of devolution deals, with local leaders empowered with the necessary financial flexibilities needed to drive sustainable transformation in their area. In practice this would catalyse the creation of what would in effect be radical local nanny states, keeping local populations fit, healthy and out of hospital; whilst also providing much greater local democratic influence in the health service.”

Andrew Webster, Director of Public Services and Health at KPMG, said: “The recommendations set out in this report could radically transform our NHS. We have seen the benefits devolution can bring to a local area in Greater Manchester and there is absolutely no reason why our health service can’t follow suit in other cities and regions. Our NHS needs to focus on the communities it works within and the people it serves, and empowering those who understand both can only be to the good. This report gives tangible and achievable ways for local leaders to assume responsibility and accountability, and it is now up to those leaders to go to Government and make much-needed change happen.”

ENDS

Press enquiries:

Kulvir Channa, Localis
020 7340 2660 (office) / kulvir.channa@localis.org.uk

Peter Lappin, Citypress (on behalf of KPMG)
0161 235 0328 / peter.lappin@citypress.co.uk

Alastair Henry, Citypress (on behalf of KPMG)
0161 235 0320 / alastair.henry@citypress.co.uk

 Notes to Editors:

  1. The report was kindly supported and sponsored by KPMG.
  2. A full copy of the report can be downloaded here.
  3. Other recommendations included the report include:
    • Over time and as power is shifted, devolution areas should be increasingly exempt from national directives such as the Better Care Fund, wider NHS planning and performance targets
    • Local authorities look to offer business rates discounts to companies that demonstrably improve their workforce’s health and wellbeing (in a similar way to those that pay the Living Wage)
    • Along the same principle of a ‘tourist tax’, local leaders are provided with the power to establish devolved health taxes
    • Enabling the development of place-based contracts and bringing no changes to any employee’s wages or working conditions, local areas are able to mutualise their NHS staff structures
    • CCGs should be given five year fixed budgets
    • Local commissioners should move away from the centrally-prescribed tariff and towards more outcomes-focused models such as capitation
    • Local authorities should facilitate the establishment of carer network cooperatives (for those paid by personal budgets or local authorities) in their areas
    • Local areas should commit to significant joint investment in out of hospital market development, and agree to develop a personalisation requirement as part of the development of joint market position statements
    • After contracts for the Work Programme and Work Choice expire in 2017, employment support should be devolved to local areas
    • Health Education England (HEE) and other workforce bodies rationalise resources and develop plans to support local areas with workforce challenges for integrated care
    • The Government and NHS England establish a national campaign to drive the creation of a new integrated care workforce, looking beyond traditional job title boundaries
  4. The report’s survey was answered by 110 stakeholders from the NHS and local government, including chairs and chief officers of CCGs; board members and staff members of foundation trusts; as well as leaders, health-related cabinet members, chief executives and health-related chief officers of local authorities. Survey results include:
    • 77% said that if it meant more effective leadership as a whole, they would be willing to relinquish powers, budgets and responsibilities to other local organisations and leaders that are better placed to deliver
    • 73% said to put their local health and care service on a sustainable footing in this parliament, disinvestment in acute services (i.e. hospital services) is needed
    • 67% of survey respondents agreed or strongly agreed that there needs to be more democratic oversight in their local health and care economy (just 18% disagreed or strongly disagreed)
  1. Greater Manchester was devolved the entire £6bn local health budget in April 2016 after a build-up year to prepare. This followed 2014’s Greater Manchester Agreement when it was announced that the city region would be devolved substantial powers (over housing, transport, skills etc.) in return for accepting a directly-elected mayor.
  2. As part of the NHS shared planning guidance between 2016/17 and 2020/21, every health and care system in England is obliged to produce a Sustainability and Transformation Plan (STP) outlining how they will transform in the next five years to “deliver a sustainable, transformed health service and improve the quality of care, wellbeing and NHS finances.” There will be 44 STP footprints each covering 300,000 to 3 million people.
  3. Localis is an independent think-tank dedicated to issues related to local government and localism. Since our formation we have produced influential research on a variety of issues including housing, local government finance and health and social care. We carry out innovative research, hold a calendar of events and facilitate an ever growing network of members to stimulate and challenge the current orthodoxy of the governance of the UK.
  4. KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.