A guide to devolution in healthcare - DAC Beachcroft

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A guide to devolution in healthcare

Published 3 November 2016

Devolution: at a glance

  • Devolution legislation works in one way only – passing powers to local government
  • Successful devolution requires a geographically defined area in which local/combined authority boundaries are broadly coterminous with the health economy
  • Wider delegation powers for health bodies and the focus on place-based commissioning and local efficiencies will influence more organic development of integration arrangements for health and social care
  • In practice, any devolution of health and social care functions will need to be consistent with the NHS Sustainability and Transformation Plan (STP) footprint and plan for the devolved area

Why this area is important

The Cities and Local Government Devolution Act allows the transfer of statutory functions, like health commissioning, to local and combined authorities from other public bodies. It also allows for the powers of other public bodies to be shared and exercised jointly with local and combined authorities.

The Act could be applied widely to any public functions, and could be a powerful tool to achieve integration of health and social care services. It reflects the increasing focus on place-based approaches to public service delivery, which allow services to be shaped to the needs of the local population and to harness the resources offered by the local economy.

However, the Act works only in one direction, transferring or sharing functions from other organisations and giving them to local government – it does not permit transfers in the other direction. So the Act could allow local or combined authorities to drive the development of fully integrated health and social care services, because they would be able to exercise all the relevant commissioning functions. But a wholesale, one-way shift of control of this kind would be very different to what many people envisage when they talk about integration of health and social care, i.e. all parties sharing functions and working together in a flexible way.

Key issues

We are seeing almost parallel developments at present; within the health sector you have the NHS Five Year Forward View (5YFV) and the push to create new models for delivering healthcare, including Multispecialty Community Providers (MCPs) and Accountable Care Organisations (ACOs). From a local authority perspective, the Act could shift commissioning and management of health and social care to local authorities on a place-based basis. It is difficult to see how these two developments would come together in one place: whether a local authority which has just been given new powers over health services would want to cede control to an MCP or ACO is a moot point.

In addition, the requirement within the health service to develop and implement Sustainability and Transformation Plans (STPs) means development of a health-specific concept of place, or local health economy. That may not always match up with the area served by a single local authority which would be the focus of any devolution of health powers under the Act. For any health and social care devolution proposal to win NHS England’s support (which is in practical terms a must), the parties must be able to show how it fits in with the area’s STP.

Use of the core transfer powers in the Act requires a statutory instrument (secondary legislation), and is likely to be used only in a small number of cases where a very clear and powerful case for devolution has been made.

On the ground, progress towards true devolution of health powers has been slow. Manchester has been the flagship of devolution, and its plans include health and social care functions. But at present, it is not planning to use the Act’s main powers to formally transfer or share NHS powers with local government: rather it has established a governance structure for integrating planning and commissioning of health and social care under existing legal frameworks.

Aside from Manchester and London, which are doing things slightly differently, there are no indications at this stage that other areas are going to be progressing ambitious health and social care devolution plans which go beyond the use of existing legal powers to integrate – particularly under s75 and s13Z of the NHS Act 2006.

However, the Act did also make some important changes to the NHS Act 2006, increasing the scope for NHS England and CCGs to delegate or share functions with each other and with local authorities and establish pooled budgets. These are powers which do not require secondary legislation and can be used on an individual basis. We expect to see much wider take up of these powers as CCGs and local authorities increasingly look to integrate their commissioning functions.

‘Devolution’ is not essential to make integration happen, and in some senses could be a distraction from progress towards integration on the ground. What we are more likely to see is a series of incremental changes that may well be tagged as ‘devolution’ but might as easily be termed ‘integration’, and which use some of the increased delegation powers that the Act has brought to CCGs and NHS England, alongside the powers in s75 of the NHS Act 2006.

Potential solutions

Devolution of health and social care may work in geographically defined areas: where the local authority’s area is coterminous with the health economy, so that there is one local or combined authority and a limited number of health providers and
CCGs which all identify themselves as serving the same population.

The Act creates an opportunity for a truly transformational change in the way in which health and social care is commissioned in an area; Greater Manchester has come closest, but so far decided against using those fundamental legal powers. It remains to be seen whether any other area will seek to do so for health and social care.

The devolution agenda has helped to promote a common understanding of the need to develop health and social care services to meet the needs of an identified local population. Even where formal devolution does not take place in the form of transfer of powers to local government, this may influence and encourage new developments in integration, as long as these can be made to fit with budgetary pressures and other NHS initiatives.

More information

For advice on public consultation issues, contact Alistair Robertson on +44 (0)20 7894 6020, or at arobertson@dacbeachcroft.com.



Alistair Robertson

Alistair Robertson

London - Walbrook

+44 (0)20 7894 6020

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