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Burnham – hand control of health budget to local authorities

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The vast majority of NHS funding would be handed to councils under a radical proposal due to be outlined by the shadow health secretary today.

Health reporting HSJ and LGC logo

Andy Burnham has drawn up a blueprint for reforms under which councils would hold an integrated budget for most health and social care services, likely to amount to about £89bn, LGC’s sister title Health Service Journal has learned.

Crucially, Mr Burnham believes the funding should not be ringfenced - leaving councils free to spend NHS cash on housing or social care schemes they think would improve health and cut the need for hospital services.

The proposals offer a possible solution to the looming crisis in social care funding. Care of the elderly has become councillors’ main concern, according to research for the LGA.

Mr Burnham will set out his proposals in a speech at the King’s Fund, in which he will outline a vision of “one budget [and] one service providing for all of one person’s needs”.

They will be tested with the health service and local authorities over the next six months in a review led by shadow care and older people minister Liz Kendall.

HSJ understands Mr Burnham’s plans include:

  • Paying general hospital, community and mental health budgets, worth around £63bn, directly to local authorities.
  • NHS money would not be ‘ringfenced’. Local authorities would be free to spend it as they wish as long as they meet a set of national standards and entitlements set out by the Department of Health.
  • Health and wellbeing boards - currently co-commissioners with clinical commissioning groups (CCGs) - would become the ‘pre-eminent’ decision-making body for health and care. A study of 50 health and wellbeing boards by the King’s Fund last April found that 44 were chaired by local elected members.
  • CCGs would become advisory bodies to health and wellbeing boards.
  • Specialised services, and possibly primary care, would be commissioned nationally, probably by the DH.
  • In each area the NHS provider trust would be a “preferred provider” for hospital, community and social care services. They would be expected to move care from hospital settings to the community.
  • The providers would not normally be subject to competition, but commissioners would have to satisfy the government they could call on “alternative” providers in the event of sustained poor performance.
  • There would be a regulator of health and social care providers, but Monitor could lose its economic regulator role and possibly be merged with the Care Quality Commission.

“The 21st century is demanding the full integration of health and social care,” Mr Burham is expected to say, adding that his proposals would “take away the meaningless divides between different parts of the public sector”.

The radical change could be accompanied by a new social care funding regime, although Mr Burnham will stress his reform proposals would not rely on this.

Several options are being considered, including care that would be free at the point of delivery, probably paid for by a levy or inheritance tax. A cap on care costs, as proposed by the Dilnot commission, is also being considered.

Under Mr Burnham’s proposals, each area’s NHS trust would be a “preferred provider” for hospital, community and social care services.

His intention of promoting integration and prevention is likely to be welcomed by many health and social care sector leaders. Most agree the need to provide care, affordably, for the ballooning population of elderly people is the NHS’s key challenge.

The shadow health secretary is due to cite concerns from NHS chiefs, who argue that too many hospital beds are taken up by elderly patients who do not need to be in hospital but do not have access to appropriate community services, as evidence of the need for reform.

However, although Mr Burnham will insist that the proposals need not involve a wide-ranging, top-down reorganisation, many will challenge the idea of shaking up NHS services so soon after the passage of the 2012 Health and Social Care Act.

NHS and social care funding from April

£90bn - NHS Commissioning Board and clinical commissioning groups

£24bn - Local authorities
Social care spending and local public health

Funding under Burnham plan

£89bn - Local authorities
Social care, general hospital, community and mental health, and local public health

£25bn - National spending
Specialised services and primary care

£0 - Clinical commissioning groups
Advisory groups only

 

What would be the impact of Andy Burnham’s proposals?

Politics

Red rosette

Labour needs to develop a distinct health policy before the 2015 election. It is likely to seek a course between committing to repeal in some way the coalition’s Health Act, and avoiding another huge NHS reorganisation.

Andy Burnham’s intention to all but abolish the current 211 clinical commissioning groups does not appear to meet the latter requirement, so could cause problems.

It is possible the coming months and years of discussion on the proposals may see them refined and reworked to ease any disruption.

Social care funding is politically sensitive and Labour has sought to avoid making large spending commitments. But if social care was paid for and healthcare free, the complexity of two funding systems would weaken the arguments for passing NHS funds to councils.

Integration

Interlinking arrows

Mr Burnham’s aim to promote integration and prevention is likely to be welcomed by many leaders in health and social care.

The need to provide affordable and high quality care for the growing population of frail elderly and people with long-term conditions is accepted as the NHS’s central challenge.

However, some are likely to argue that a nationally mandated transfer is not necessary − or sufficient − to deliver seamless services.

The type of provider landscape Mr Burnham envisages is unclear but there could be a positive response to an apparent move towards accountable integrated providers.

That said, the prospect of leaving single NHS trusts entrenched and unchallenged will be unpopular with many, including within Labour.

Funding controversy

Pund sign

Outside of local government, the prospect of councillors making decisions about NHS services will be hugely controversial.

Whether a council decides to divert NHS funds to social care or housing, or conversely prop up its local district general hospital at all costs, the process would be divisive.

The changes may take national politics out of hospital reconfiguration, but would replace it with extra local politics. Power would move from GPs’ surgeries to councillors’ surgeries.

NHS commissioning

NHS logo

The proposals may cause rapid shifts in behaviour on the ground.

CCGs’ success depends on the confidence and participation of GPs. For some, the news they may become an advisory body to councils within three years will dampen enthusiasm.

Conversely, many CCG leaders have shown significant interest in integration, and may see Mr Burnham’s ideas as an opportunity.

The NHS national leadership and commissioning board staff may see the potential benefits of a focus on integration and community care, but will be wary of the idea of another major reorganisation just as they attempt to fill posts in time for April.

Local government

Buildings

Councils are likely to welcome the freedom to spend NHS money on services such as housing if they believe this will improve health and reduce demand for acute services. A focus on prevention, rather than treatment, could sit well alongside the public health responsibilities they take on in April.

They will welcome the prospect of relieving the pressure on social care budgets − the Local Government Association has reported this to be councils’ biggest area of concern.

However, where health and wellbeing boards are working well and there are good relationships with CCGs, councils may ask whether the major shift in funding is necessary. It could make more sense, they might suggest, to transfer their social care budget to their CCG.

A further concern is that dealing with the NHS could become a big reputational problem for councils. Key questions include whether troubled councils such as Doncaster and Tower Hamlets could be handed such significant responsibility, how councils might be accountable for NHS failings, and how many staff they would be expected to take on.

Additional reporting by Kaye Wiggins

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