Can the government’s proposals for NHS reform be made to work?

BMJ 2011; 342 doi: (Published 31 March 2011) Cite this as: BMJ 2011;342:d2038
  1. Kieran Walshe, professor of health policy and management, 1,
  2. Chris Ham, chief executive2
  1. 1Manchester Business School, Manchester, M15 6PB, UK
  2. 2King’s Fund, London W1G 0AN, UK
  1. Correspondence to: K Walshe Kieran.walshe{at}

The new health bill is contentious, and growing professional opposition to some aspects could undermine the reforms. Kieran Walshe and Chris Ham suggest some changes that may help the government to make its reforms work

Since the publication of the coalition government’s white paper in July 2010,1 the political, professional, media, and public response to the proposed National Health Service reforms has shifted from incomprehension, through scepticism, towards increasing opposition.2 Many important stakeholders whose support will be essential, such as general practitioners, NHS managers, patient groups, and local authorities, do not accept the need for these reforms3 and fear their potential risks and costs for the NHS at a time of huge financial challenge.4 But preparations for their implementation have proceeded apace, in advance of legislation, and their reversal would now be very difficult.

The two main stated aims of the reforms—improving quality and outcomes for patients, and making health services more patient centred—unsurprisingly command universal support. So do some of the mechanisms for achieving those aims, such as greater localism—creating an NHS that is effectively managed and organised by and for the communities it serves, is responsive to the needs and concerns of patients both individually and collectively, and in which there is both less cause and less opportunity for the Department of Health to micromanage the NHS from a distance and to intervene with central directives. The emphasis on creating an NHS in which clinical professionals work collaboratively to provide consistently high quality, effective and efficient healthcare, and where clinicians take the lead in designing care pathways and take responsibility for the use of resources is also widely endorsed.

The main area of contention concerns the development of competition among providers, the increased role of the private sector, and the wider use of other market mechanisms.5 We suggest some changes to the bill that would secure greater support from stakeholders and reduce the risks associated with its implementation, focusing on three main areas: general practice commissioning consortiums and primary care, competition and choice, and system governance and accountability.

Commissioning consortiums and primary care

At the heart of the proposals is the intention to create general practice consortiums that will commission health services for the populations they serve. The government is determined that these consortiums will be different from the primary care trusts they replace—more autonomous and clinically led, and more effective at commissioning from powerful secondary care providers. The experience of commissioning in the NHS and elsewhere suggests important modifications to the reforms would make them more likely to succeed.6

Firstly, although some consortiums may be able to take on a full set of responsibilities in 2013, many will need much more time to evolve and mature.7 A graduated approach to authorising consortiums should be adopted in which they take on functions of increasing complexity as they are able to show that they are capable of doing so. This would not be dissimilar to the process for authorising NHS foundation trusts, where it has taken several years (and often more than one attempt) for NHS trusts to satisfy the regulatory agency Monitor that they are capable of holding foundation status.8

Secondly, the consortiums must be able to take responsibility for the quality and nature of primary care provision if they are to be effective in commissioning secondary care because the two are so interdependent. The government envisages that the NHS Commissioning Board will be responsible for commissioning primary care, but it should do so in partnership with commissioning consortiums. Consortiums will have the knowledge of primary care provision in their areas and credibility with general practitioners that are essential to improve standards of provision.

Thirdly, consortiums have to be able to take sensible “make or buy” decisions—whether to provide services through their constituent practices or commission them from elsewhere—but this must be done in a way that is completely transparent and accountable and ensures that potential or actual conflicts of interest for general practitioners in particular are dealt with robustly.

Fourthly, the commissioning function should be essentially a public responsibility that cannot be devolved or fully outsourced. Consortiums might seek support and advice on commissioning from private entities,9 but they must remain publicly accountable for all commissioning decisions and resources, and information about commissioning and provision must be in the public domain. Finally, consortiums need effective governance arrangements that embrace relevant patient, professional, and population interests. The bill says little about consortiums’ constitutions and governance. It should do more to ensure that primary care clinicians other than GPs, secondary care clinicians, patients, users, and local authorities are properly represented and involved, that consortiums’ business is open to public scrutiny, and that formal safeguards of financial probity such as having an audit committee, a qualified financial director, and independent external audit are all in place. The new health and wellbeing boards led by local government should be given a bigger role in governance of consortiums, including the opportunity not just to comment on but to influence their commissioning priorities and plans.

Choice and competition

A large part of the health bill is concerned with establishing the mechanisms for competition between providers in the NHS—for example, the new economic regulator, the rules and regulations for competition, and the setting of service tariffs. It restates the freedom of patients to choose where they are treated and suggests that they will be able to turn for treatment to “any willing provider,” not just those with whom their general practice commissioning consortium may have agreed contracts.

Competition is not an end in itself but a means to achieve improved performance.10 11 But both international and NHS experience suggest that competitive markets in healthcare are often imperfect—the effects of information asymmetry, natural monopoly, vertical service integration, service co-dependencies, costs of market entry, and so on can make it difficult to realise the benefits of competition and can instead produce a range of adverse and unintended consequences such as patient selection by providers, overtreatment, and lower clinical quality.12 The introduction of greater competition needs to be phased and evaluated to ensure it is delivering improved performance.

The bill needs to create ways to allow commissioning consortiums to use competition and contestability to improve performance rather than stipulate competition in all circumstances regardless of the likely effects on performance and expose consortiums to legal challenges if they do not put services out to tender. Existing guidance13 on the principles and rules for cooperation and competition should be revised to set out more explicitly the circumstances in which competitive tendering is required—primarily where existing services are poorly performing, expensive, or do not meet patients’ needs, or where there are credible alternative providers that can offer better value for money. If consortiums do not use these opportunities to drive improvement, Monitor could use its powers to promote competition in areas where it is likely to improve performance.

The government should also be clearer about the intended scope and purpose of “any willing provider” arrangements in the bill. Currently it seems that once a provider is approved by the NHS Commissioning Board it would be able to offer services to patients of any commissioning consortium, and no consortium could refuse to use them without good cause. Similar arrangements have been in place in planned and elective care since 2006 (at least in theory, though uptake has been limited).14 The impact of these experiments should be evaluated before “any willing provider” is extended to other services.

The bill should also do more to enable commissioning consortiums to plan and deliver integrated systems of care, especially for patients whose healthcare needs are complex and intensive. That implies some restriction of patient choice of provider, since planned and integrated systems or pathways for care require a closely coordinated network of providers. This does not rule out contestability among providers for roles within that network; nor should it prohibit competition between organisations to be the lead providers within networks for a defined period. The way in which competition is implemented in the NHS needs to be sensitive to the requirements of different services and to allow for competition between clinically integrated systems when this will benefit patients.15 The bill needs explicitly to allow commissioning consortiums to balance their duty to the individual patient to offer free choice against their duties to the wider patient population to plan and provide effective and efficient health services through integrated networks that offer advantages for the community.

System governance and accountability

For many decades, the NHS in England has been managed through a hierarchy of organisations with the Department of Health at its apex. Legislation has given the secretary of state huge decision making discretion and extensive powers of direction over the whole system. The Health and Social Care Bill abolishes much of that hierarchy, explicitly reduces the powers and duties of the secretary of state in ways designed to prevent the Department of Health from continuing to manage the NHS, and creates two national quangos—the NHS Commissioning Board and Monitor—to take on many of the health department’s current powers.

But the bill retains extensive reserve powers of intervention for the secretary of state, and it is likely that the political dynamics nationally and locally will be so strong that the Department of Health will be drawn in to intervene—for example, at times of financial or clinical crisis. At a national level, it is difficult to see who, if anyone, will be in charge of the NHS. There will be five key national bodies: the Department of Health, the National Institute for Health and Clinical Excellence, the Care Quality Commission, the NHS Commissioning Board, and the economic regulator Monitor. Although the remit of each is set out in legislation, it is not clear how these national bodies will interact or how they will provide coordinated and consistent governance of the NHS. Experience suggests there is a substantial risk of conflict, and if this happens the Department of Health will be drawn in to direct and manage the NHS more extensively than envisaged.

The bill should therefore define more clearly the circumstances in which the reserve powers of the secretary of state might be used, and formal guidance should be developed to avoid inappropriate intervention. The governance relationships, ways of working, and accountabilities of the national bodies also need to be defined and described—for example, through a jointly developed and published agreement among those bodies.

The abolition of strategic health authorities may seem like a good way to reduce NHS management costs, but it will leave a substantial organisational distance between the NHS Commissioning Board and general practice commissioning consortiums. This creates a risk that strategic health authorities are simply reinvented as outposts or offices of the NHS Commissioning Board, and that could produce greater centralism not localism. Three modifications to the reforms are needed to deal with this. Firstly, the creation of strong systems for local governance for commissioning consortiums, which we discussed above, will ensure that they look locally, to the communities they serve, rather than upwards to the NHS Commissioning Board. Secondly, guidance is needed on the intended relationship between the NHS Commissioning Board and consortiums. This should give the consortiums meaningful autonomy and accountability and reserve the NHS Commissioning Board’s substantial powers of intervention for cases of serious financial or clinical concern. Thirdly, the primary care trust (PCT) clusters now being formed—groups of trusts that have been merged in all but name, partly to save on management costs—should not be seen as purely transitional arrangements but should have a longer term role.16 In the short to medium term these PCT clusters will need to support general practice consortiums and undertake some functions and responsibilities that consortiums are not yet capable of assuming full responsibility for. But in the longer term, we suggest that PCT clusters should become federations or collectives of commissioning consortiums, led and managed by the consortiums themselves, and existing to provide shared and specialist services that no individual consortium might provide for itself. One essential function would be to plan and coordinate redesign and reconfiguration of services across a health economy, which will often require a high level of collaboration and shared decision making across multiple consortiums.17 In time, much of the responsibility for specialised commissioning, which the bill proposes centralising in the NHS Commissioning Board, could be transferred to these federations.


The parliamentary arithmetic suggests that the Health and Social Care Bill will, perhaps in modified form, become legislation later this year. But making that legislation produce improved performance in the NHS, better value for money for the taxpayer, and better clinical outcomes for patients requires the support and engagement of many stakeholders.18 The current disengagement evident across key groups like healthcare professionals and managers represents a serious challenge to the reforms. It would be a mistake to assume that these groups will simply come to accept the reforms in time, and there is a real risk of the reforms failing at considerable political cost to the government. Modifications of the kind we have set out would be compatible with the core aims of the government’s policies, would minimise the risks involved in taking them forward, and would make the reforms more likely to command the support of those who are needed to make them work.

Proposed modifications to the NHS reforms in England

Commissioning consortiums and primary care
  • Create a graduated and phased approach to authorising consortiums, in which they take on increasing functions as they become capable of doing so

  • Enable consortiums to be directly involved in managing primary care and influencing clinical standards and processes, working with the NHS Commissioning Board

  • Allow consortiums to take sensible “make or buy” decisions without rules which require competition by default but with robust arrangements to deal with conflicts of interest

  • Ensure that commissioning remains a public responsibility that consortiums cannot wholly outsource, and ensure information remains in the public domain

  • Put in place strong governance arrangements for consortiums

Choice and competition
  • Allow consortiums to use competition and contestability only where it is likely to improve performance and define those circumstances more clearly

  • Assess the impact of “any willing provider” arrangements in areas where it is currently used (eg, elective care) before future expansion

  • Allow consortiums to plan and deliver integrated care through provider networks (that is, allow them to constrain individual choice in the interests of collective benefits for efficiency and quality of care)

System governance and accountability

  • Define more clearly the circumstances in which the secretary of state’s reserve powers over the NHS Commissioning Board and other bodies might be used to avoid inappropriate intervention

  • Define more clearly the governance arrangements and ways of working of five key national bodies – the NHS Commissioning Board, Care Quality Commission, Monitor, NICE and the Department of Health

  • Create strong governance arrangements for consortiums that ensure they look first to the communities they serve rather than upwards to the NHS Commissioning Board when setting priorities

  • Give consortiums meaningful autonomy and accountability and reserve the NHS Commissioning Board’s powers of intervention for cases of serious financial or clinical concern

  • Plan for primary care trusts clusters to become collectively owned federations of consortiums providing shared and specialist services such as commissioning and service reconfiguration


Cite this as: BMJ 2011;342:d2038


  • We thank Jennifer Dixon, Naomi Chambers, Nigel Edwards, and Martin McKee for their comments.

  • Contributors and sources: KW and CH have studied, reported, and advised on health reform and health policy in the UK and elsewhere. This paper is based on an analysis of publications on the current health reforms in England, and draws on our discussions with many people working in and with the NHS.

  • Competing interests: All authors have completed the unified competing interest form at (available on request from the corresponding author) and declare no support from any organisation for the submitted work; no financial relationships with any organisation that might have an interest in the submitted work in the previous three years; and no other relationships or activities that could appear to have influenced the submitted work.

  • Provenance and peer review: Commissioned; externally peer reviewed.