liberating the NHS: report of the arm's – length bodies review
– a summary
Following a review of 18 of the Department of Health's (DH)
arm's-length bodies (ALBs), and wider system reforms outlined in
the White Paper – Equity and excellence: Liberating the
NHS, on 26 July 2010, the DH published its report of the
review, setting out the future configuration of the ALB sector. The
purpose of this document is to provide a summary of some of the key
points referred to within that report.
In 2009/2010 ALBs spent approximately £1.6 billion on business
operations, including baseline revenue funding from the DH of
approximately £800 million. The previous review of ALBs, which took
place in 2003/2004, resulted in a reduction in the number of ALBs
from 38 to 18.
The DH considered it necessary to conduct a further review of
ALBs with the overall aim of simplifying the national landscape,
removing duplication and better aligning the ALBs sector with the
rest of the health and social care system. One of the ways in
which the DH intends to achieve this aim, is through the creation
of a more coherent and resilient regulatory system which will
provide clarity of responsibilities and reduced bureaucracy around
licensing and inspection.
The DH vision for the future is summarized as:
- Functions will only be carried out at national level where it
makes sense to do so.
- The number of ALBs will be kept to a necessary minimum and the
scope of each ALB will be clearly defined to avoid mission
creep.
- ALBs will be expected to collaborate and co-operate to avoid
duplication of activities and minimise unnecessary burdens and
costs to health and social care organizations.
- ALBs will have less freedom to determine how they spend their
money on pay, expenses, travel, consultancy, communications and IT,
and they will be expected to publish information and benchmarking
data online.
- Where appropriate, ALBs will be expected to exploit commercial
opportunities and maximise commercial discipline across the
sector.
To this end the DH proposes to have:
- One medicines and devices regulator
In conducting the review, the DH considered the roles of ALBs
which includes any Executive Agency of the DH, the Executive
Non-Departmental Public Bodies (set up in primary legislation with
their own powers) and Special Health Authorities. The review
involved an assessment as to whether in the future health and
social care system, the functions of the ALBs are essential and
whether they:
- Are sufficiently technical that there is a scarcity of
capability and expertise for the function to be provided by other
means.
- Need to be performed independently of Ministers to ensure
political impartiality.
- Provide accountability and assurance to patients, service users
and taxpayers by independently establishing facts.
The review demonstrated that:
- Some national functions are vital to safeguard the health and
welfare of the public.
- Some functions overlap and could be integrated to build on
synergies and reduce overheads.
- Some functions no longer need to be provided at a national
level by the state.
- Change is required to achieve greater alignment with the wider
system changes and to deliver a more responsive service.
- Real efficiencies have yet to be delivered across business
support functions, including cost efficient estate
utilization.
- Commercial opportunities have not been fully exploited.
As a result of the issues identified by the review, and subject
to Parliamentary approval:
- Monitor, the Care Quality Commission, the National Institute
for Health and Clinical Excellence, the Medicines and Healthcare
products Regulatory Agency, the Health and Social Care Information
Centre and the NHS Blood and Transplant ALBs have a clear
future.
- The functions of the Human Fertilization and Embryology
Authority and the Human Tissue Authority will be transferred to
other bodies.
- The Health Protection Agency and the National Treatment Agency
will be abolished as statutory organizations and their functions
transferred to the Secretary of State as part of the new Public
Health Service.
- The Alcohol Education Research Council, the Appointments
Commissions, the National Patient Safety Agency and NHS institute
for Innovation and Improvement will be abolished.
- The Council for Healthcare Regulatory Excellence will be moved
out of the sector to operate on a full-cost recovery basis.
- The General Social Care Council will be abolished and its
functions transferred to the Health Professions Council.
- The Litigation Authority and NHS Business Services Authority
will be subject to a commercial review by industry experts.
Turning then to consider the position of the ALBs referred to
above:
Care Quality Commission (CQC)
The DH is satisfied that the functions of the CQC satisfy the
criteria for ALB status. Furthermore, it has demonstrated cost
effectiveness, delivering the registration of NHS organizations
economically as a result of the bringing together of the Mental
Health Act Commission, the Health Care Commission, and the
Commission for Social Care Inspection.
As a result, the DH has proposed only limited changes to the CQC
whereby the NHS Commissioning Board will take over the CQC's
current responsibility of assessing NHS commissioners (although the
CQC will continue to conduct period reviews of adult social care
and retain its responsibilities under the Mental Health Act). The
CQC will operate a joint licensing regime with Monitor, and
Healthwatch England, a new independent consumer champion concerned
with patient's rights and concerns, will be located with a distinct
identity within the CQC.
Monitor
Subject to legislation, Monitor will be transformed into a new
economic regulator (the detail of which is set out in a separate DH
document).
Medicines and Healthcare products Regulatory Agency
(MHRA)
The DH is satisfied that the functions of the MHRA are essential
and that it satisfies the criteria for ALB status
New research regulator
The DH has requested the Academy of Medical Sciences to conduct
an independent review of the regulation and governance of medical
research, which is expected to report in autumn 2010.
Human Tissue Authority (HTA)
Whilst the DH is of the view that many of the functions of the
HTA remain essential, it does not consider there to be a compelling
case for the HTA to remain a separate entity.
The licensing activities regarding the removal, storage and use
of tissue, will be transferred to the CQC. Regulatory function
regarding research could be transferred to a new research
regulator.
The timings and detail of the proposals in respect of the HTA is
dependant on the outcome of the review to be carried out by the
Academy of Medical Sciences review. Given the complexity of the
legislative framework regarding the HTA, and the sensitive nature
of the subject area, the DH does not intend to legislate for these
changes in the Health Bill in autumn.
The DH will engage with the HTA and other key stakeholders to
develop detailed proposals, including options for handling those
functions already carried out by the HTA that may not sit well with
the work to be carried out by the CQC and/or the new medical
research body.
Human Fertilization and Embryology Authority (HFEA)
Whilst satisfied that the HFEA functions satisfy the ALB
criteria, the DH is of the view that there are clear synergies
between some of the functions performed by the HFEA, the HTA, and
the CQC.
The HFEA's research function will be reviewed as part of the
Academy of Medical Sciences review. A move of such functions to a
new research regulator will make it possible for the remaining
functions of the HFEA relating to the regulation of fertility
clinics to be transferred to the CQC. There may be potential for
the HFEA's information collection and retention functions to pass
to the Health and Social Care Information Centre.
Given the complexity of the legislative framework regarding the
HFEA, and the sensitive nature of the subject area, the DH does not
intend to legislate for these changes in the Health Bill in autumn,
but aims to introduce the necessary legislation within
Parliament.
The DH proposes that the HFEA should remain as a separate ALB in
the short term with the aim that its functions will be transferred
by the end of the current Parliament. During this period the DH
will examine the practicalities of how to divide the HFEA functions
between the new research regulator and the CQC.
Council for Healthcare Regulatory Excellence (CHRE)
The DH is satisfied that CHRE fulfils an ongoing need to quality
assure professional regulation, however, it proposes to make CHRE a
self-funding body through a levy on those it regulates. The DH also
proposes to extend CHRE's remit to set standards for and to quality
assure, voluntary registers held by existing statutory health and
care professions regulators, and other professional bodies.
The DH intends to include provisions for these and other
associated changes, within the Health Bill.
General Social Care Council (GSCC)
The GSCC is the only professional regulator answerable to
the Secretary of State. The DH sees no compelling reason why the
GSCC should remain as an ALB. Rather the DH proposes to abolish the
GSCC and transfer the regulation of social workers out of the ALB
sector, and to the Health Professions Council (HPC) so as to make
it financially independent of the government.
The DH considers the HPC to be a well established and efficient
regulatory body, with a comprehensive and cohesive system of
professional regulation.
In respect of the GSCC's responsibility for the payment of
Education Support Grants, the DH considers that if that function is
to remain, it would need to be transferred to another body.
The abolition of the GSCC and the transfer of its functions to
the HPC will require primary legislation. The timing of such
changes is dependant on discussion with the HPC and the GSCC.
Public Health Service
The Health Protection Agency and the National Treatment Agency
for Substance Misuse are to be abolished and their functions are to
be transferred to the Secretary of State as part of the Public
Health Service. This would include the functions which
support the local delivery of drug treatment services.
The DH will set out its programme for public health later this
year providing further detail as to the impact that such
arrangements will have on the Health Protection Agency and National
Treatment Agency for Substance Misuse.
Alcohol Education and Research Council (AERC)
The AERC has charitable status and administers a fund of
approximately £8 million to support research into the prevention of
alcohol related harm. The DH does not provide funding for
this body. The DH does not consider that this organisation
satisfies the criteria for the ALB sector and therefore intends to
remove the organisation.
NHS Blood and Transplant (NHS BT)
The DH considers there to be strong arguments for the retention
of the majority of the NHS BT functions within a single national
system. It is of the view that the transfer of the NHS BT out
of the ALBs sector and moving such functions to a different
delivery model would risk destabilising the current national donor
system. However the DH considers that the Bio Products
Laboratory will benefit from greater commercial freedom and closer
integration with its Plasma Supply Chain and it will therefore be
transferred into a DH owned limited company. With the
exception of Bio Products Laboratory, the organisation will remain
within the ALB sector and the DH intends on commissioning an in
depth review into opportunities to make the NHS BT more
commercially effective.
Health and Social Care Information Centre (IC)
The DH considers there to be a duplication of roles and
responsibility around collection, analysis and dissemination of
information. This is considered to be unacceptable due to the
significant burden and costs incurred on the front line. The
DH intends to make aggregate data widely available to patients, the
public, researchers and other organisations in a standard
format. With this in mind the DH proposes that the IC will
become the national repository for data across healthcare, public
health and adult social care with lead responsibility for data
collection and assuring the quality of those returns. The IC
will need to meet the needs of a multiplicity of customers.
This proposal would result in other ALBs relinquishing their data
collection roles to the IC. The DH also recognises that the
relationship between the NHS Commissioning Board and the IC will be
critical to ensure the NHS Commissioning Board can exercise its
management function.
The Health Bill will contain provisions to put the IC on a
firmer statutory footing with clearer powers across organisations
in the health and care system.
Appointments Commission (AC)
The DH recognises the important role that the AC has
played. However the government's intention for the future of
PCTs, as set out in the Wide Paper, and the ending of PCT public
appointments, means that the Commission's NHS work would come to an
end. The future model across government involves what is
described as "a sizeable reduction" in the number of national
public appointments. Accountability for these appointments
would rest with ministers and the process will remain subject to
scrutiny by the Commissioner for Public Appointments. The
Government has also signalled that key appointments may also be
subject to Select Committee scrutiny.
Given the changing landscape in respect of NHS and public
appointments, the DH is of the view that there will be no need for
an ongoing central public body to carry out the functions that the
commission currently provides beyond 2012. Therefore it
proposes the abolition of the AC during 2012 and intends to engage
with the Commission on managing the transition period to
abolition.
Quality and Safety Improvement
The NHS Commissioning Board will provide national leadership on
commissioning for quality improvement. The DH proposes that
some essential functions supporting this role from the National
Patient Safety Agency and the NHS Institute for Innovation and
Improvement should be brought together within the main stream work
of the NHS Commissioning Board.
National Patient Safety Agency (NPSA)
Whilst the DH recognises that the functions of the organisation
are necessary within a system supporting wider quality and safety
improvement, it is not satisfied that it is necessary for such
functions to be performed at ALBs of the Department.
Therefore the DH proposes to abolish the NPSA with some functions
becoming part of the remit of the NHS Board. The work of the
patient safety division relating to reporting and learning from
serious patient safety incidents should move to the NHS
Commissioning Board, as a patient safety sub-committee of the
Board.
The National Clinical Assessment Service should continue in the
short term but the DH proposes that over the next few years the
National Clinical Assessment Service will become a self funded
service and the Department intends to agree a date with the Service
for achieving self sufficiency. The DH proposes that the
future of the National Research Ethics Service is considered as
part of the wider Academy of Medical Science of research
regulation.
NHS Institute for Innovation and Improvement (NHS III)
The NHS III is currently funded largely through grant in aid
from the DH. The NHS Commissioning Board will assume a
leadership role in commissioning for quality improvement and the
responsibility for improving outcome that will occur at every level
of the NHS. In assessing the NHS III the DH is not satisfied
that it meets the criteria for the ALB sector and therefore the NHS
III will be abolished as an ALB, transferring to the NHS
Commissioning Board those functions that will support the Board in
leading on quality, improvement and building capacity within the
wider system.
The future of the Scheme's and their administration will be
considered in the wider context of the recent White Paper.
NHS Litigation Authority (NHS LA)
The DH intends to commission a review of the NHS Litigation
Authority to identify potential opportunities for greater
commercial involvement, recognising the impact on future
organisational form. This will be done with a view to the
likely removal of the NHS LA from the ALB sector as soon as is
practicably possible.
NHS Business Services Authority (NHS BSA)
The DH intends to commission a commercial review of the NHS BSA
to identify potential opportunities for greater private sector
involvement, including the possibility of removing activities from
the ALB sector. The DH will also explore opportunities to
remove from the NHS BSA their non core activities and where
necessary finding an alternative approach to delivering the
functions.
concluding comments
Even in relation to ALBs which have remained relatively
unchanged, there is an expectation that the ALBs will all
contribute significant efficiency savings. The DH will identify
opportunities to raise capital and improve the commercial
performance of trading activities within the ALBs sector and the
DH. The ALBs will be expected to work towards integrating their
business support functions to achieve greater efficiencies and
economies of scale. The DH will also introduce tighter governance
and accountability of the management of the ALB sector. The burden
of ALB on providers and any other organization will have to be
understood and justifiable, and ALBs will have to embed the
principles of good regulation within their organizations.
The DH will engage with the ALBs and key stakeholders in order
to consider the detail of each recommendation and it expects the
proposals to be completed by 2012/13. The DH will prioritize those
proposals aimed at reducing the cost of the business support
functions of ALBs.
