Local empowerment: How to achieve a sustainable health service

Author: Jack Airey   |   22/07/2016

This report makes the case for a devolution revolution in the National Health Service, arguing that a healthier balance between central and local control is possible and practical.

The publication, sponsored by KPMG, recommends that local areas should negotiate health devolution deals directly with the Government. These deals should give them new powers and freedoms to enable more integrated planning and delivery between health and social care. This will mean relaxing some regulation and performance targets, delegation of key commissioning decisions and greater local financial control.  As part of these deals, we recommend that:

• The local area’s departmental health budget should be 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 should be increasingly exempt from certain national directives such as the Better Care Fund, wider NHS planning and performance targets

Greater financial control would allow local areas to radically rethink how funding flows through their local health and care system. This would create a completely different set of incentives to integrate services and the flexibility to direct more investment into preventative measures and non hospital-based services. To drive this rebalancing process, we recommend that:

• CCGs should be given five-year fixed budgets and balance them over the medium-term rather than annually.
• Local commissioners should move away from the centrally-prescribed tariff and towards more outcome-focused models, such as capitation.
• Local authorities should offer business rates discounts to companies that demonstrably improve their workforce’s health and wellbeing.

Giving local areas more powers over revenues will help cement their control of the health and care services. This will give them the incentive to raise extra funding as needed and enable better use of existing resources. To support this, we recommend that:

• Local areas should be given the freedom to alter the social care precept level.
• Local leaders should be given the power to establish devolved health taxes.
• The Government should buy out NHS-brokered PFI loans from affected trusts in local areas, providing a more reasonable repayment rate.
• Local areas should rationalise all local NHS estates into one body.

Local areas should be able to mutualise their NHS staff structures. This would enable local leaders to develop a more multi-disciplinary workforce via place-based contracts which empower frontline staff while not changing employees’ wages or working conditions. To support local areas, we also recommend that:

• Health Education England (HEE) and other workforce bodies develop plans to support local areas with workforce challenges for integrated care.
• The Government and NHS England should run a national campaign to create a new integrated care workforce, looking beyond traditional job title boundaries.

Any deal would, like Greater Manchester’s, need total buy-in from all local partners: acute providers, Clinical Commissioning Groups, local authorities and other arms of the public sector. To drive this, we recommend that:

• Strong and appropriate local governance and accountability measures should be put in place before any deal begins to take effect.
• Deals should flow from the bottom up rather than being imposed from above, perhaps along Sustainability and Transformation planning footprints.

The report has attracted support from a range of cross party figures:

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, the report author and Research Fellow at Localis, said: “As our research makes clear the centralised nature of the health service is neither sustainable nor desirable in the 21^st 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.”

For more information on this publication, please contact jack.airey@localis.org.uk.