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NHS bill set to create new layers of bureaucracy

The new structure has more organisations and layers than before, writes Richard Blogger.

In the Conservative 2008 policy document Andrew Lansley said: "Primary Care Trusts will remain local commissioning bodies... PCTs will also remain, as now, the areas to which NHS resources are allocated". In addition he said: "As part of our commitment to avoid organisational upheaval, we will retain England’s ten Strategic Health Authorities."

However, at the 2009 Conservative Party conference Lansley announced that NHS administration would be cut by one third. This was the Conservatives "austerity conference" when it appeared that every policy spokesperson had to announce some austerity measure. Lansley's measure was to remove targets which he implied would make huge savings in administration costs.

But the problem for Lansley was that the "administration" he identified – targets – affects hospitals, and since (at that time) half of hospitals were Foundation Trusts and independent of the government, he could not cut their staff. The only staff that Lansley employed were in the Department of Health, SHAs, PCTs and various "arms length bodies" (like the Health Protection Agency and Care Quality Commission). Consequently, he had to overturn his original policy of retaining PCTs and SHAs and, as he predicted in his own 2008 policy document, this has lead to "organisational upheaval".

There is some truth that PCTs and SHAs had too many managers. In 1999 there were eight regional offices of the NHS executive and this was reorganised into 28 SHAs in 2002. Each SHA had its own management (chief executive, finance director, HR director etc) and when SHAs were reduced to ten in 2006, the management was absorbed into the new organisations. Similarly, in 1999 there were 100 Health Authorities and 481 Primary Care Groups, these were reorganised to 303 Primary Care Trusts in 2002 and the re-organised again to 152 PCTs in 2006. Again, as organisations were consolidated, the number of managers remained. The following chart shows the structure in 2010.

NHS structure 2010

Recently I spoke with the chair of my local PCT and he explained that he had been the chair of the local Health Authority until it was abolished in 2002 and then he became the chair of the PCT when the 152 larger PCTs were created in 2006. Although the Health Authority and the new PCT did roughly the same work and covered the same population, he had almost twice as many managers in 2006 than in 2002. However, before last year’s election some PCTs were in the process of "clustering" (sharing management). If this had continued it would have lead to perhaps 40 or 50 leaner PCT clusters.

Instead, as a result of the government’s "listening exercise" some organisations have been spared, and new ones created. The new structure is shown here:

NHS structure proposed

The ten SHAs will be merged into four and it is likely that these will remain in future as the regional offices of the Department of Health. The 152 PCTs are being clustered into about 40 organisations and these will remain for a few years longer (their lifetime is uncertain). The Co-operation and Competition Panel will shift sideways to Monitor, and in spite of the Prime Minister's assurances on competition, this organisation will continue to promote competition in the NHS.

The government will create a new super quango, the National Commissioning Board (which, in part, will recruit staff from the Department of Health), and is creating Clinical Senates which will be roughly based upon existing Clinical Networks, but with a new duty to advise GP commissioners. Instead of 152 PCTs we will now have about 300 GP-based Clinical Commissioning Groups, each of which will have a board and management.

The new structure has more organisations and layers than before. The worry, at a time of flat real terms funding for the NHS, is that funds for patient care will be channelled into the new bureaucracies.

Richard Blogger writes about the NHS and social policy at NHS Vault.

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