In this article we look at the issues surrounding the Department of Health's decision to implement a national standards system prioritising local patient needs above legislature.
The Operating Framework for 2010/11 published at the end of 2009 says that the Department “will set demanding national standards for provider reform which leave PCTs to innovate locally to create a system that best meets local needs but that has sufficient challenge to ensure patients and taxpayers come before administrative convenience”
Accordingly, and without prescribing the outcome, the Department of Health has re-imposed a hard deadline of 31 March 2010 for PCTs to have agreed with SHAs their proposals for the future of their provider arms. It has now issued further guidance on the options confirming the range of options available and the approval assurance and engagement processes. It is now clear that Community Foundation Trusts are a very limited option (no more than 10 including the current pilots) and continued direct provision will only be permissible in exceptional circumstances. There is a clear emphasis on quality improvement, including integration of services, contributing to efficiency and sustainability in the assurance framework.
What, then, are the options?
Each PCT will need to decide whether it wishes to see the provider arm more as a single unit or broken up, and how it wishes to orchestrate a transfer: either by open competition for a community services contract with a business transfer annexed or by a more limited and informal selection process. In the case of a transfer to a social enterprise under the right to request or to a Community Foundation Trust, a competition or selection process would not normally be relevant.
Key issues which PCTs will need to consider in making their decision will be how these align with the assurance tests for proposals set out in the guidance. These are not narrowly prescriptive but identify areas where the SHA will be critically reviewing the proposals. It is clear from the current drive towards integration of services to deliver more personalised care that relationships with other parts of the relevant care pathways will be important, but all of this will have to be delivered against the requirement for significant savings to deliver the NHS efficiency target. The questions PCTs should be asking themselves are:
Procurement cannot be ignored as although the Department has indicated a green light for transfers to social enterprise, with an initial 5 year contract, the Commissioners will need to be able to justify any uncompetitive award of contracts both in terms of European law and their own commissioning policies.
It is also to be noted that the guidance contemplates streamlining rather than avoiding the referrals to the Cooperation and Competition Panel, which raises questions about the role and criteria to be adopted by the CCP in evaluating these proposals and the realtionship between the different reviewers.
Detailed issues at implementation will include the following:
One significant area which does not seem to have received the attention it deserves is the development of a new board where the transfer is to be to an FT or new social enterprise, and the abilities of the organisation to stand alone. We have considerable experience in supporting Trusts moving to FT status and the discipline of that regime will to a large degree need to be adopted by new independent enterprises.At BB we have a dedicated team who have been advising both PCTs and acquirers on the issues raised by the transfer of provider arms. For an early discussion of the options in the new landscape or the carrying out of your plans, see below.