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Devo bill amendment could halt most ambitious health proposals

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Some of local government’s more ambitious proposals for the devolution of responsibility over health could be blown off course by an amendment to the devolution bill passed in the Lords on Tuesday night.

The amendment, moved by former Labour health minister Lord Warner, said regulatory or supervisory functions could not be transferred from national NHS bodies, such as foundation trust regulator Monitor, the Care Quality Commission and NHS England.

Peers had already passed a government amendment to the Cities & Local Government Devolution Bill preventing other public bodies’ regulatory functions being transferred to a combined authority or council, but Lord Warner said this didn’t go far enough.

His amendment specified that where health functions are devolved the newly responsible body must adhere to national standards and information and accountability obligations.

His Labour colleague Lord Hunt said on Twitter this would “protect the national nature of the NHS”.

LGC understands the amendment was prompted by concerns raised by health professionals.

It was agreed on Tuesday night, the bill’s final session in the Lords before it goes to the Commons to be considered by MPs after the parliamentary recess.  

The amendment could be overturned in the Commons but if it stands it could derail some of the devolution proposals put forward in Greater Manchester and the ambitions agreed by London council leaders and the capital’s mayor.

Councils and the NHS in Greater Manchester had initially sought to lead the regulation of NHS providers in the area, with support from Monitor and the Care Quality Commission. The wording around this was watered down in the final version of the memorandum of understanding agreed with NHS England, however LGC understands they have continued to seek greater flexibility.

The concern is that an organisation’s requirement to satisfy its regulators could conflict with what is in the best interests of the wider health economy.

Authorities in London are seeking similar freedoms in their devolution demands, including the power to set tariff for NHS services which is currently controlled by Monitor and NHS England. Many local government figures believe the tariff system, which pays a fixed rate for hospital activity, is a barrier to reform and moving care closer to home.

Lord Warner told LGC he was a “strong supporter” of devolving health and social care budgets and functions and giving places a greater say in how services are designed and delivered.

“My amendment in no way stops that happening,” he said, and added he just wanted to make it clear where accountabilities lay.

Olwen Dutton, partner at Bevan Brittan, said while the amendment prevented regulatory or supervisory functions being devolved she thought that could change as relationships matured.

“You may have to produce some evidence but laws can always be amended,” she said.

Paul McDermott, partner in the public sector commercial department at legal firm Trowers & Hamlins, told LGC the amendment “raises a legal question” that could cause “uncertainty for health and social care reform” but added places should “not be scared” by it.

“It’s not an excuse to not reform and it’s not an excuse not to innovate,” he said.

Peers also passed an amendment enabling the creation of combined authorities to be “fast-tracked” where a devolution deal had already been agreed and governance arrangements considered as part of that.

Other amendments agreed during the debate would mean elected mayors could only be handed powers if all of the members on a combined authority with voting rights agree while combined authorities must have audit committees which will assess their performance and financial management.

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