Local government should be given NHS England’s £168.8bn budget as part of a wider restructuring of the English health and care system, according to think tank Reform.
In a paper titled ‘Close enough to care’, the think tank recommended that as devolution deals mature, the government should commit to devolving “all but a few specialist NHS services to an appropriate tier of local government”.
This would be achieved via a block grant lasting a minimum of five years, under Reform’s proposals for restructure.
“Local government should be free to decide their service model and how they wish to spend the grant, based on local needs, providing they meet a minimum service level set by the Department for Health and Social Care,” the Reform paper stated.
The wider proposed restructure of the health system includes phasing out NHS England “as quickly as possible”, with the Department of Health and Social Care taking on NHS England’s remaining specialised commissioning functions, “as well as responsibilities for setting core service entitlements, monitoring high level outcomes, determining resource allocation, and providing high level strategic support”.
Reform’s paper stated that “the future of healthcare relies on health creating services and evidence indicates these are best situated at a local level”.
The think tank noted that despite “numerous reforms in recent years to devolve and localise healthcare, it remains unusually centralised”. Reform found that this is because the reforms have resulted in “a system of delegation not devolution”.
“So long as the centre is accountable for health outcomes, local systems are driven by meeting extensive centrally driven targets,” the paper stated. “These policies are not only divorced from health creation but also the distinct needs of demographically diverse communities.”
The paper added that devolution has the “potential to improve outcomes in our health system at a reduced cost”. It said: “In the first instance, devolution allows policymakers to plan services which are better tailored to the needs of their local population. Local decision makers have significant ‘informational advantages’ over more distant central policy makers – they are closer to service users and can use local institutional and community knowledge to build more responsive approaches to health and care provision.
“Secondly, strong accountability at a local level (particularly where some revenue is generated locally) provides incentives to improve quality and contain cost.”
The paper offered two possible models for its proposed restructuring – one would see combined authorities act as accountable care organisations (ACOs), with the other a split devolution model with a co-financing mechanism.
Barriers to devolution
Reform’s paper noted that moving towards a devolved model of health and care is “made difficult by the complicated and often confusing” administrative landscape of local government in England.
Therefore, if health devolution is to “become the norm” across England, “either a higher degree of standardisation in models of local governance must emerge, or policymakers will need to be comfortable with devolution taking different forms in different parts of the country”, the think tank suggested.
Limited fiscal devolution is another barrier, although “not a precondition for health devolution”. However, an ability to raise revenue to meet local priorities “can be a core enabler of system transformation, and reduce the requirements for financial oversight required in centralised states,” Reform said.
Although local authorities already possess the capacity to commission and deliver essential care and public health services, the paper notes, “capability and capacity building will be required to ensure that the local state is equipped to take on a much broader set of responsibilities”.
Despite this and other challenges, Reform’s paper concludes that exploring a more devolved settlement is “vital”, and that “without fundamental change, our centralised health system will prove unable to withstand the challenges of the future”.
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