Risk & Economy » Public Sector » Restructuring the NHS

Thousands of managers and administrative staff within the National Health Service (NHS) face redundancy or redeployment under changes that aim to put family doctors in charge of purchasing care on behalf of patients. Under plans outlined in a government whitepaper published in July, England’s 10 strategic health authorities will be abolished by 2012 and the country’s 152 primary care trusts (PCT) will be abolished the following year. Their commissioning functions will be replaced by GP consortia, to be overseen by an independent commissioning board and economic regulator.

Health secretary Andrew Lansley has refused to put a figure on the number of GP consortia to be created, though 500 is the figure many expect to see realised. And the country’s 35,000 GPs have no option but to join one of the new consortia that will between them share an annual budget of about £80bn, four-fifths of the current NHS annual budget, to commission the healthcare they need for their area.

The aim is to reduce management costs by 45 percent over the next fours years, on top of making efficiency savings of £20bn, freeing up cash for frontline services. But many of the big consultancies are already smacking their lips at the prospect of all those GPs that need help to establish themselves as middle managers.

NHS finance directors, though – despite potentially being caught in the redundancy crosshairs – find Lansley’s proposals something of a relief and think the much-discussed financial targets achievable.
Giving local authorities control of public health is a step in the right direction and one that is welcomed by NHS FDs, accord-ing to Hardev Virdee, director of finance at The London Borough of Hounslow PCT.

“The view is that there is some slack in the system,” he says. “We have to demon-strate that we are making the most out of each pound invested.” But Virdee admits that making sure savings are achieved without compromising services “is going to be a huge challenge”.

Jaki Meekings Davis, president of The Chartered Institute of Public Finance and Accountancy (Cipfa) and a former NHS finance director, is also broadly supportive of the proposed changes. “Any move which leads to better commissioning is the right direction of travel,” she says. “But there will be huge risks before we reach equilibrium.”

Meekings Davis believes shared manage-ment teams are the likely way forward; FDs could work on behalf of several GP consortia. “The earlier they can transfer staff into joint posts, the better, as this would reduce redundancy costs,” she adds.

The growing trend towards quality private healthcare has brought into focus the potentially lucrative opportunities in the NHS restructure for private companies. The NHS may no longer be paying them, but private owners may yet sink millions into employing contractors and consultants to facilitate the new structure – which then begs the question of whether that still simplifies and improves the cost of delivering the NHS.

Meekings Davis sees no problem with healthcare being provided by a mixed market of private and public sector providers. “The solutions to many of our problems are not going to be found by the NHS being insular,” she says. “It almost doesn’t matter whether a provider comes from the public or private sector, so long as you have a strong commissioning function and an effective monitoring regime.”

As always, points out David Stout, director of the primary care trust network at the NHS Confederation – which represents more than 95 percent of NHS organisations – the government’s proposals lack the necessary fine detail to judge the real chances of the restructure succeeding.

“We are supportive of the main thrust of policy as clinical and financial management belong together. But I don’t think we can say for certain that this is going to work,” Stout says. “When you reorganise, things often get worse before they get better.”