Thinking about the response to the White Paper consultation and the 2011-12 Operating Framework, I've come to two conclusions.

The first is that either the people who wrote this lot are very confused indeed, or I am. Perhaps both.

The second is that it all means the NHS is going to be Safe As Milk. I'm just not clear what kind of milk we are talking: farm-fresh; UHT-insipid; or sour, rank and turning mouldy.

We have already explored how the response to the NHS White Paper Consultation and the NHS Operating Framework 2011-12 could have left the policy on the negotiated tariff open to the threat of judicial review by Monitor.

Important and widely-recognised things include:
- No debt legacy for consortia at birth (as hinted by Jim Easton and Earl Howe) – which of course means that emerging consortia in debtor PCT areas will have to help achieve financial recovery between now and April 2013.

- PCTs won’t die; they’ll just be merged, and then under direct control by Sir David Nicholson - “In the final year of the transition (2012/13), the new PCT clustering arrangements will be accountable to NHS Commissioning Board for ensuring robust financial control. PCT clusters will begin to oversee delivery in 2011 & continue to act as transition vehicles until at least April 2013. Beyond that date, it will be for the NHS Commissioning Board to determine how it organises itself”.

Houdini has nothing on the intermediate tier of NHS management. With no process or post advertised, the announcement by SoS Lansley of Sir David’s appointment as acting chief executive of the shadow NHS Commissioning Board is in itself clear proof that The Liberator’s stated intention to give away power is disingenouous, specious rhetoric.

Yes, I am trying quite hard not to swear.

So. Sir David is to head up something that doesn’t even exist. It’s an interesting symbol, no?

A big, big hint on the future for clustered PCTs crops up in the Operating Framework statement that “they will provide the new NHS Commissioning Board (NHSCB) with an initial local structure to enable it to work with GP consortia”.

- There is going to be real money for commissioning - a £2 per head of registered population allowance for pathfinder consortia from April 2011, and the running costs will be between £25 and £35 per head of registered population once consortia are fully launched in April 2013. Nicholson was not joking when he said people would be surprised how generous it would be.

- PCTs are again top-sliced by 2% for system financial balance, which money is to be held by SHAs (again) - this is across the board, even for areas that have exhibited good financial control. Now that’s what I call decentralisation.

- There is an overall tariff reduction between 2010/11 and 2011/12 of 1.5 per cent, which is the same as the CQUIN payment: “In 2011/12 we shall extend the CQUIN framework to the new NHS standard contract for care homes. For all standard contracts, the amount that providers can earn will be 1.5 per cent on top of Actual Outturn Value”/

- Full economic regulation by Monitor is deferred until April 2014, and its role in the private patient income cap and prudential borrowing limit are abolished

Important and under-recognised things include:
Monitor’s originally-proposed superpowers have been highly constrained – It will no longer able to set the tariff alone (must be in concert with NHS Commissioning Board - NCB. And governance changes make FTs’ own boards more responsible for FT performance,

The Bill promises to:
- make explicit the duty of governors to hold the board of directors to account, through the chair and non-executive directors (whom they have power to appoint and remove);
- give governors power to require some or all of the trust’s directors to attend a meeting. For transparency, the FT’s annual report would have to list any occasions when this power was used;
- extend to FT directors the duties imposed on directors under company law, such as the requirement to promote the success of the organisation;
- require FTs to hold an annual general meeting for its membership, at which members would be able to discuss the trust’s annual report and accounts. We envisage requiring FTs to report on directors’ pay and the expenses of directors and governors and the work of their remuneration committees.
- remove the need for Monitor’s consent (to FTs changing their constitution without Monitor’s permission), but retain the essential elements governing the requirements for a constitution
- strengthen the power of the governors by requiring their agreement to any changes to an FT’s constitution
- allow FT’s members to overturn any constitutional change concerning the governors’ own role within the organisation, if a significant majority of the members voting at an annual meeting opposed it
- put FTs will be under a new statutory obligation to inform the regulator about amendments to their constitution, but it will be the responsibility of trusts rather than Monitor to assure themselves that changes are compatible with legislation
- give foundation trusts the flexibility to merge, acquire another FT or NHS trust, or de-merge without the approval of Monitor
- give the Secretary of State power to define accounting and reporting requirements for FTs.
- make a related financial change on the provision of information by FTs. As public sector organisations, FTs’ spending already has to be managed within the Department’s budget for the NHS. For effective financial planning, the Department needs regular information about FTs’ forecast spending. Currently Monitor collects this from FTs as a by-product of its other functions, and shares it with the Department on a voluntary basis. In future, since Monitor will not be gathering routine information from FTs in the same way, the Bill will provide power for the Department to collect it directly.
- place a duty on Monitor to manage conflicts between its functions (authorising FTs and regulating / intervening in FTs) – for example, by setting up a ring-fenced committee to manage its FT functions separately
- set a duty for Monitor and the Commissioning Board to consult on the pricing methodology at the same time as the prices are published. GP commissioners and providers will be able to object to it; and, as with objections to licence modifications, if the number of objections is above a threshold, Monitor will have to respond to the objections or make a reference to the Competition Commission
- explicitly require Monitor and CQC to co-operate in operating their regimes, over and beyond the new duty of partnership for non-departmental bodies and special health authorities. In particular, the two regulators will be under a duty to work together to minimise bureaucracy and create a single integrated process of licensing and registration for providers

In addition, “the Government has decided only to allow objections (to FT licence modifications) by providers themselves. Under the Bill, therefore, if Monitor wishes to modify providers’ licence conditions, it will need to consult with providers, who will have an opportunity to agree or object to the change. If the number of objections is above a threshold (to be defined in regulations, and weighted according to the market share of those complaining), Monitor would be required to respond to the objections or make a reference to the Competition Commission, which would have the power to make a binding decision”.

Finally, there is a big shot across the competition-obsessed’s bows: “Monitor will be required to take account of the need to support commissioners in ensuring access to services to meet the needs of their patients and populations, where necessary, by maintaining continuity of supply”.

I’ll do Monitor, competition and failure separately, or this will go on forever.

(What do you mean, you gave up thirteen paragraphs ago?)

New independent banking function to control taxpayers’ stake in and lending to FTs - “In future, the management of the Department of Health’s investment stake in FTs will be undertaken through an operationally independent banking function. This will align the risk to the investment with the management of that risk, and ensure that investment management and lending decisions are made in line with commercial principles and informed by specialist knowledge and expertise.

“In future, the new banking function will also be responsible for managing new public lending to FTs … the Bill will repeal the Secretary of State’s power to give grants or subsidies to FTs”.

This could be very big indeed. Almost Qinetiq.

Much more power for local councils – the proposals to “extend councils’ formal scrutiny powers to cover all NHS-funded services, and will give local authorities greater freedom in how these are exercised” are very significant indeed. Local health and wellbeing boards’ rights to scrutinise the consortia commissioning plans and ensure they fit with strategic needs assessment potentially removes freedom of movement from commissioners.

What will happen in a conflict between a consortia and a health and wellbeing board? Especially over a service reconfiguration?

Although the document states, “the health and wellbeing board will not be a commissioning body. The commissioning authorities will be the local GP consortia and the local authority. The Government is also clear that it cannot grant authority without responsibility: it would contravene the principles of financial accountability to give local authorities the ability to make NHS commissioning decisions that could commit additional expenditure from GP consortia, without local authorities having to take responsibility for that expenditure”, it also says, “our aspirations for health and wellbeing boards range some distance beyond mere analysis of common problems. We intend for them to become deep and productive partnerships that develop solutions to commissioning challenges rather than just commentating”.

(The ‘commentating’ line is pure Nicholson; he used it in his June Confed conference speech, saying, “The first thing is we need to avoid turning into commentators. We need to avoid that - I can perfectly understand it. I've been there. Sat in the terraces telling people what they think of what's happening. There will always be a bit of that and I understand that's part of being an organisation but we need to be there actually making things happen and the faster we do that the more likely we are to get the results that we need”).

It is spectacularly missing the point of liberation, devolution or whatever cobblers they are calling this today for the DH to “intend” relationships to be any way – that is responsibility without authority, as it were.

In any conflict, the document states, “the local authority will be able to refer decisions about significant changes to any designated services to the Secretary of State. In this way we will retain the “right to refer”, the importance of which was emphasised by a number of NHS, local government and third sector organisations … there should be a principle of referring to the NHS Commissioning Board and then, by exception, to the Secretary of State for Health”.

And look! Who should get the right of arbitration but the Secretary Of State! In event of a local authority referral, “the Bill will include a regulation making power that can enable the Secretary of State to direct NHS commissioners (either directly in the case of the NHS Commissioning Board, directly or via the NHS Commissioning Board in the case of GP consortia) to stop reconfigurations of those services subject to additional regulation, when they are referred to him. This is one of the few occasions, other than in an emergency, or possibly in complying with EU law, when we envisage the Secretary of State will have any ability to interfere with an individual commissioner or provider. In making decisions, the Secretary of State will, as now, be guided by the Independent Reconfiguration Panel, and additionally be required to take account of the safety, effectiveness and patient experience of services and the need for services to be financially sustainable.”

Moreover, “the Bill will enable the Government to extend the powers of local authorities to enable effective scrutiny of any provider of any NHS-funded service, including, for example, primary medical dental or pharmacy services and independent sector treatment centres, as well as any NHS commissioner. The powers will also include scrutiny of local public health services. They will include the ability to require any NHS-funded providers or commissioners to attend scrutiny meetings, or to provide information. In this way local democratic scrutiny will be increased very substantially. The proposed powers for the local authority to scrutinise matters relating to GP consortia’s commissioning functions is a very important way of ensuring local public accountability”.

Consortia will be bendy, if the Commissioning Board lets them - really quite a good idea, this, to “provide for membership of consortia to flex rather than be fixed forever, with consortia able to expand, contract, dissolve or merge … for boundaries to flex rather than be fixed: allowing members to leave and join another consortium, and letting consortia merge or dissolve”.

However, you can see it being badly abused if ‘naughty’ consortia offend the NCB, which must be “satisfied that prospective consortia have made appropriate arrangements to ensure that they can discharge their functions and that they have an appropriate area”. Those are very broad criteria indeed: wide open to interpretation.

The NCB will be very much the new performance-managing centre - extending that last point, weren’t you liberated to read that the Bill will “promote close working between emerging GP consortia and PCTs to help ensure that, during the transitional period, consortia are able to draw on the expertise and experience of PCT staff and the repository of information about public views held at PCT or borough level”.

So who will do that? Abolished SHAs?

There is some token guff that “the headquarters of the NHS will be in the consulting room, not the NHS Commissioning Board. Innovation will come primarily from the leadership of liberated local commissioners and providers, supported by the NHS Commissioning Board, not the other way round”

Provided the NCB is satisfied with arrangements and area-aptness.

Of course it says that it won’t do this: “The Board will need to construct a very different relationship with GP consortia to that which currently exists between the Department and SHAs, and SHAs and PCTs … less of a hierarchical performance manager than a quasi-regulator of commissioners, operating on the basis of clear and transparent rules, within well-defined statutory powers”.

I wish I felt reassured by that. The statements that the NCB will not have “a general power of direction which implies general control. Nor … be able, as SHAs are, to use hierarchical power as a way of resolving disputes between commissioners and providers” sounds fine, until you read that “the Government is exploring how it can enshrine the principle of the autonomy of individual commissioners and providers as a duty both for the Secretary of State and for the NHS Commissioning Board”.

My, that’s reassuring! But it gets even better – “The Bill will also include a duty for the Board to promote collaboration between GP consortia and local authorities, to reinforce the importance of health and wellbeing boards”. That’s what SHAs and the DH do now.

In risk-sharing, there is to be a “supporting role for the NHS Commissioning Board, including potentially some form of weighted ‘insurance’ premium to ensure appropriate incentives for good financial management”. That’s what SHAs do now.

Talking about “the importance of demonstrating that the NHS Commissioning Board is responsive to the needs of consortia and ensuring that it holds the confidence of healthcare professionals” is one thing. Knowing how you do that is another.

For all that it describes “new duties on the Secretary of State and the NHS Commissioning Board to maximise the autonomy of individual commissioners and providers by limiting their general powers of direction; an obligation on Monitor to regulate only where necessary; and the Health and Social Care Information Centre will be under an obligation to keep data burdens to the minimum that are necessary”, this document sets out a world in which the Secreatry Of State and NCB enjoy a lot more powers than previously outlined (and Monitor quite a few less).

PPI will be as unimportant in the Brave New World as it’s always been - It is baldly asserted that “requiring there to be a statutory management board for each consortium would be over-prescriptive; and that placing legislative requirements for there to be lay or patient participation in the governance of consortia is unlikely to work. A GP consortium is about a nexus of professional inter-relationships, the exercise of peer influence, and professionals taking on direct responsibility and public accountability for the decisions they collectively make. The Government does not see how this can be mediated through imposing upon consortia a small number of lay or patient appointees.”

The junior partner in the Coalition ought to consider whether that statement is startlingly illiberal and strikingly undemocratic. No adequate substitute is offered in the stated requirement on consortia “to make public their remuneration arrangements, to hold an annual general meeting that is open to anyone, make their commissioning plans available to the public, and publish an annual report which includes consideration of how well they have discharged their new joint arrangements with local authorities. The annual report will also be the place where GP consortia reflect the patient and public consultations that have taken place.”

Nor is the democratic deficit remedied by the need for consortia to have a publicly available constitution. Indeed the statement that “The Bill will provide for the NHS Commissioning Board to issue guidance to consortia on the form and content of their proposed constitution. To reinforce the requirement that governance arrangements must be robust, the Board will also have the power to issue guidance to consortia on the form and content of their proposed constitution, drawing for example on the principles of good governance in public life”. merely recasts the NCB as the new DH.

Oh, who’s going to be in charge of the NCB?

Sir David Nicholson? You don’t say.

The ‘duty to involve’ has no teeth, either. The NHS has been faking public and patient involvement for decades.

The proposal that “each year the Secretary of State will be obliged to undertake a formal public consultation on the priorities contained within the mandate before issuing the final version” is similarly dentally-challenged. Likewise the references to how very important a fig-leaf the NHS Constitution is.

You’re stuck with your Darzi Centres and ISTCs - The “residual contractual liabilities associated with the current PCT commissioning arrangements” are your problem, chaps.

And just for fun, “PCTs will be expected to involve emerging GP consortia in any decisions that result in liabilities (in respect of healthcare-related contracts) extending beyond the PCT’s operational life”. Oooh, involved in the decisions! Now we’re cooking on gas!

Consortia will be performance managers - No other conclusion can be reached from reading of “an explicit duty for all GP consortia to support the NHS Commissioning Board in continuously improving the quality of primary medical care services … consortia will play a systematic role in helping to monitor, benchmark and improve the quality of GP services, including through clinical governance and clinical audit”.

That is good. But it’s also management.

Disciplinary matters are very unclear - The document states that the NCB “should retain the formal responsibility for ensuring that a practice is meeting its core contractual duties”, but that “it will be able to delegate some responsibilities for managing the GP performers list to GP consortia, where it makes sense to do so”.

Wide open to interpretation once again. Much power for the NCB.

The Commmissioning Board’s many powers -
One significant power for the NCB will be its ability to control consortia which it deems unready for full liberation: “A minority of consortia might not be ready to take on full statutory responsibilities by April 2013 … we recognise that there may be a small minority of consortia for whom this is not possible. The Bill will enable the Board in these circumstances to establish the consortium but to specify conditions about how it discharges some of its functions, or (in what we consider would be rare circumstances) to arrange for the Board itself – or another consortium acting on behalf of the Board – to exercise certain functions for a limited period while the consortium develops the necessary capacity.”

That is A Lot Of Power.

The Bill will also provide “for the NHS Commissioning Board and consortia to be able to enter into pooled budgetary arrangements”. Deeply unspecified.

And also A Lot Of Power.

This looks like a Plan B option to me. Which the statement that the NCB “will have the power to hold a central contingency from within its allocated budget” rather reinforces.

There is wild ambiguity about staff transfer from PCTs - On the one hand, it states, “GP consortia … will have the power to decide what commissioning support they want, and from whom. Transitional support arrangements from PCT clusters need to be set up with that clearly in mind, with emerging consortia acting as customers”.

On the other, its section on transition plans “include identifying those posts within emerging consortia staffing structures that match existing posts within PCTs and therefore provide the basis for a transfer of staff from PCTs to consortia, with staff typically transferring from April 2012 onwards once consortia are statutorily established”.

There appears to be a hefty hint in the section reading “We want to strike a balance between retaining essential talents and capabilities of SHA and PCT staff and giving GP consortia the freedom to innovate and access the support they need through the transition to the new system. Whilst it will be for consortia to make these decisions, bearing in mind the associated costs, we anticipate that a number of PCT staff across all grades will be essential in providing consortia with the skills and knowledge required to take on their new commissioning role.”

The Operating Framework confirms that “staff will be increasingly assigned to emerging GP consortia to support their development”.

One final very good idea - the end to delayed discharge summaries and more – penalties for bad data: “The NHS should use the Secondary Uses Service (SUS) as the standard repository for performance, monitoring, reconciliation and payments by April 2012, operating in shadow form from October 2011. During 2011/12, progress on delivery of this will be performance managed and commissioners will be expected to use contract sanctions if they are not satisfied about the completeness and quality of a provider’s data”.

One final very bad idea – the Operating Framework suggests that clustered PCT support for emerging consortis will include “a qualified or accredited senior finance manager (this may be shared across consortia)”. Sharing a finance director is not going to work. That is one of the real reasons PCTs Mark 1 which tried this approach failed: lack of sufficient financial grip.