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Solace blog

27th February 2015

Local Authorities Controlling NHS Budgets – Whatever Next?

The news that the NHS’s £6 billion Health and Social Care budget for Greater Manchester will be taken over by the Greater Manchester local authorities will no doubt have sent shockwaves through many involved in delivering NHS services. The plan, which will come into effect from April 2016, will link to the election of a new Greater Manchester directly elected Mayor who (it is said) will control how budgets are allocated. This is a big step forward for placebased delivery of integrated public service provision.

In addition to having control of £2 billion transferred to the Greater Manchester Combined Authority last year for skills training, transport, and planning, the transfer of £6 billion NHS funds means that local politicians will decide on how more than a quarter of government money is spent in the area.

Concerns are being expressed as to what this ultimately localist move means for the principle of a single, national health service which provides a consistent standard of care to everyone in the country. But many local people will support the approach in principle as it will help deliver the person centred care envisaged by the Care Act 2014 and promoted by the wider NHS integration push, and (perhaps even more importantly) help to focus on preventative services that should significantly reduce the numbers clogging up A & E provision. Perhaps the Greater Manchester
proposals are simply bringing us face to face with the reality that integration and person-centred care cannot be achieved through a uniform solution that will look the same in every part of the country, despite the very different nature of the populations, markets and existing infrastructure in different locations.

However leaving aside the wider policy or philosophical issues, it’s important to consider how the Greater Manchester approach will work in practice and who will actually be taking the decisions on use of the pooled budget.

Part of the plan is for a Greater Manchester Health and Wellbeing Board to be established that would work closely with existing Clinical Commissioning Groups (CCGs) in order to prioritise how the funds would be spent. A shadow board is being created this April, before control of the budget is handed over in 2016.

There is, however, one fly in the ointment at present. The legal backbone underpinning the role of Health and Wellbeing Boards does not properly confer the powers that The Board would need to determine how the £6 billion would be spent. As the law stands at present, local authorities are unable to delegate executive functions to Health and Wellbeing Boards, nor can CCGs delegate any functions directly to Health and Wellbeing Boards (as opposed to delegating certain functions to the local authority generally under section 75 of the NHS Act 2006).

Initially the inability to delegate local authority functions to a Health and Wellbeing Board (such as adults, public health, housing and other executive functions) was not seen as a critical issue, because most Health and Wellbeing Boards were concentrating on the preparation of the Health and Wellbeing Strategy, (which should guide the delivery of all local authority/CCG functions). However, they have now been in existence for almost two years and are, in many places, ready to step up to the plate to take on more responsibility through the decision-making process, particularly for joint commissioning of integrated services with Health Bodies.

Whilst DCLG and DOH may have recognised that there is an issue, so far, their attempts to address the legislative deficit have fallen far short of what is required.

Health and Wellbeing Boards were created by the Health and Social Care Act 2012 to bring together local authorities, CCGs, Local Healthwatch and such other persons or representatives as the authority or the board considered appropriate. They are a new and different creation having Councillors, Officers, GPs, health representatives and others on the same Board with parity of involvement.

The role of the Health and Wellbeing Board includes advancing the health and wellbeing of the people in its area; encouraging persons who arrange for the provision of any health and social care services in the area to work in an integrated fashion; and providing advice, assistance or other support for the purpose of encouraging Section 75 NHS Act 2006 arrangements. More recently, guidance around the Better Care Fund issued by the HFMA and CIPFA has also encouraged decision making through Health and Wellbeing Boards to approve plans to deliver the £3.8+ billion
integration funding.

CCGs are required to co-operate with the Health and Wellbeing Board in the exercise of its functions under Section 194(10) Health and Social Care Act 2012.

Constitutionally, however, the Health and Wellbeing Board is stated to be “a committee of the local authority which established it and, for the purposes of any enactment, is to be treated as if it were a committee appointed by that authority under Section 102 of the Local Government Act 1972”. This means that it is a non-executive committee and is unable to exercise executive functions.

The Health and Social Care Act permitted regulations to disapply other legislation that might apply to a body that was constituted as a Section 102 Committee, or apply legislation with such modifications as maybe prescribed.

Regulations were therefore passed to deal with a number of issues, particularly around the ability of Officers to participate and vote at meetings; conflicts of interest; and political balance for example.

As the chain of authority to a Health and Wellbeing Board is non-executive, most local authorities with executive governance have sought to arrange a concurrent scheme of delegation of health and social care, public health and other relevant functions by authorising their representatives on the Health and Wellbeing Board to take decisions, or by taking any required executive decisions through the Cabinet, or Lead Member to ensure decisions are properly authorised.

The government has recently acknowledged the difficulties around decision making by Health and Wellbeing Boards, however, their proposed solution does not appear to achieve the intended outcomes. On 29 January 2015 DCLG issued a consultation paper on proposed changes to the Local Authorities (Functions And Responsibilities) (England) Regulations 2000, as amended. The proposed regulations would consolidate subsequent amending regulations and introduce a number of changes (arguably some of the “hobby horses” of the Secretary of State for Communities and
Local Government including frequency of domestic waste collections having to be agreed by full Council along with car parking charges). Whilst the consultation is labelled “technical” it has some wide-ranging implications (including, for example, the proposal that all disposals of land in excess of £500k should be determined by full Council!)

The consultation document states that the policy intention is for Health and Wellbeing Boards to be able to exercise any functions of their authorities, whether executive or non-executive (at paragraph 15). The proposed solution is to include in Schedule 2 of the regulations (which lists “local choice functions” i.e. functions which may be, but need not be, the responsibility of an authority’s executive), the following additional provision: “22.the function of arranging under Section 196(2) of the Health and Social Care Act 2012 for a Health and Wellbeing Board established under Section 194 of that Act to exercise any functions that are exercisable by the authority”.

We would suggest that this does not achieve the desired objective. “Authority” functions are not “executive” functions, by their very nature, and so the above provision should mention the “executive” rather than the authority. Even that would not seem to go far enough, because the whole idea is that Health and Wellbeing Boards could exercise all sorts of different functions on behalf of a local authority where it had an impact on health and well-being – from leisure to housing to youth justice.

The provision might be better drafted to authorise the Health and Wellbeing Board to take decisions on any function of the executive that may affect the health and wellbeing of any person, to the extent that may be determined by the executive from time to time. If the Cabinet chooses which functions it delegates within certain parameters then this will provide a local framework to facilitate delivery of place-based health and wellbeing functions. Any delegation by the executive would not be to the exclusion of the executive – it would be concurrent delegation and the officers and
members on the Health and Wellbeing Board would be able to ensure consistency and oversight of decisions corporately within the authority (and in accordance with local government law it would be able should it so wish to defer decision-making to the executive where it felt that would be more appropriate). The budget would still ultimately be controlled through full Council/ Greater Manchester Combined Authority.

The consultation on these regulations closes on 6 March 2015 and so we would encourage authorities to respond to the consultation and press for change to the draft regulations to facilitate the above.

At the same time, the Department of Health is consulting on amending the Partnership Regulations that govern Section 75 Arrangements to encourage more joined-up planning and commissioning across out of hospital care and to bring NHS England’s Primary Medical Care functions within the permitted scope of partnership arrangements between local authorities and health bodies. This consultation closes on 8 March 2015.

As is often said, we live in interesting times, with increasing diversity in the way functions are exercised between different areas of the country. Whilst this will be a big change in the transfer of NHS functions, it is to be hoped that the concentration on place as the determinant of future arrangements must be a step in the right direction of better, more integrated, more efficient and effective service provision. However, the Greater Manchester approach is very significant, both for those living in that area in terms of the impact on them and for the whole country as a test of a
game-changing new approach to funding and delivering services. It is therefore essential that it is based on strong legal foundations, and that local authorities and health bodies engage with the current consultations which will determine the future legal basis of integration.

Judith Barnes, Partner, and Head of Local Government, DAC Beachcroft & Ros Ashcroft, Associate, DAC Beachcroft