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2 October 2020updated 05 Aug 2021 5:44am

The short, disruptive life of the most controversial reforms in NHS history

How the health service survived the first wave of coronavirus by ignoring Andrew Lansley’s Health and Social Care Act. 

By Jonny Ball

In 2010, David Cameron promised “no more top-down reorganisations” of the NHS. Two years later, in government with the Liberal Democrats, his health secretary Andrew Lansley introduced what many describe as the most sweeping reforms in the NHS’s history. 

The Health and Social Care Act, passed in 2012, ceded power away from the Department of Health in an attempt to decentralise decision-making, increase competition between local NHS bodies, and extend the so-called “internal market” in the provision of services. Purchasers and providers were to be kept strictly separate, and GPs were to be given autonomy over commissioning from either public or private entities. 

But less than a decade after its implementation, the act has been abandoned, in a process precipitated by the coronavirus pandemic. Many of the key organisations it created have received fierce criticism for their purported mishandling of the crisis. 

And even before Covid-19 struck, the results of the huge restructure were decidedly mixed. In 2015, The King’s Fund described the act as a major distraction for the NHS that caused huge, unnecessary upheaval. The think tank said the act had created “an unwieldy structure”, with “leadership fractured” between competing national bodies and “a bewilderingly complex regulatory system”.

A 2013 report by the Centre for Health and the Public Interest said the coalition government’s reforms had impeded the NHS’s ability to deal with a pandemic flu, in part because of the “inevitable consequence[s] of the disruption caused by such a major re-organisation”. It also highlighted “fragmentation and a lack of clarity within the newly created organisational structures”. The act’s “market-driven system” had led to a prioritisation of “efficiency savings” while “minimising spare capacity in hospitals”, the report concluded.

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The Health and Social Care Act was immediately controversial. Before it was passed, opposition from trade unions, healthcare professionals and the public led to the government announcing a nationwide “listening exercise” to “pause, listen and reflect” on the proposed reforms. 

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Its critics derided the act as backdoor privatisation. Their concerns were accentuated when an adviser to then prime minister David Cameron told a conference of private healthcare executives in 2011 that the coalition’s reforms would speed up the transformation of the NHS into “a state insurance provider, not a state deliverer” of care. The NHS would be shown “no mercy”, he said, and the reforms offered a “big opportunity” for the private sector. A group of doctors working in the NHS formed the National Health Action Party to oppose the legislation.

The act established an alphabet soup of arms-length and semi-autonomous non-departmental bodies. These included the NHS Commissioning Board (otherwise known as NHS England); Public Health England (PHE); clinical commissioning groups (CCGs), controlled by local GPs; the NHS Trust Development Authority; Monitor, a new regulatory body; and dozens of competing, financially independent but state-funded new foundation trusts – a process that had already begun under the New Labour government.

“A key part of the act… was the idea of independent competing foundation trusts whose job really was to look after themselves,” Dr Richard Murray, chief executive of the King’s Fund, told Spotlight. “In terms of the patients that cross the threshold, it wasn’t up to the service down the road to protect them. It was all based on this idea of a market of competition between trusts.”

The legislation was tortuous and convoluted. In 2014, the British Medical Journal quoted a former No 10 adviser who described the act as “unintelligible gobbledygook”, and its passage as the biggest mistake the Conservatives under Cameron had made in government. “No one apart from Lansley had a clue what he was really embarking on,” said the Downing Street insider, “certainly not the prime minister.”

Shirley Williams, who led Liberal Democrat opposition to the bill from the House of Lords, claimed that in her long political career she had never seen a bill that was “so incomprehensible, so detailed, so long, [and] so impossible to understand”. The junior coalition partners eventually acquiesced in the act’s passage through parliament. 

In August, in the midst of the biggest health crisis the UK has suffered in decades, the Health Secretary Matt Hancock announced the abolition of Public Health England (PHE), one of the bodies that the 2012 reforms established. 

In his “Future of Healthcare” speech in July, he described national healthcare institutions as “too siloed… by law under the 2012 act”. For weeks, newspapers had reported on ministerial frustration at their lack of control over the running of the NHS, the disappointing performance of quasi-independent organisations like PHE, as well as on Downing Street’s plans to now restrict the service’s operational independence. Hancock, the Guardian reported, was “frustrated [by] how limited his powers [were] and [wanted] to get some of that back”.

As a young back-bench MP for West Suffolk, Hancock voted consistently in favour of Lansley’s legislation. Its original white paper, Liberating the NHS, had promised to run the healthcare service “from the bottom up”. The labyrinthine new structures it proposed would, the white paper said, “prevent political micromanagement” and “give the NHS greater freedoms”. In 2016, four years after the bill had been passed, Lansley defended his reforms in a speech to NHS providers. His intention, he said, was that “the NHS should stop being a political football and should become independent”.

But the vision of autonomous local practitioners emancipated from departmental bosses was not to be. Germany has won praise for its response to the coronavirus pandemic, in part due to the responsiveness of the country’s highly devolved health system. In contrast, bodies such as PHE have been criticised for their top-down approach, particularly on testing.

“Something went a bit wrong,” Dr Murray said. “Ministers of the Department of Health thought they would liberate the NHS by handing over power to NHS bodies. It turned out some of those NHS bodies, NHS England in particular, were also just as centralising as their predecessors. It may have been freeing from the position of the chief executive of the NHS, but it wasn’t particularly liberating if you were working down in a local service. 

“And what Covid is showing is that centralising the service in that way isn’t helpful. There are so many issues of local contexts that are absolutely critical. Tower Hamlets is not the same as Cornwall, and trying to run everything in the same way does not work.”

One of the major problems with the reforms was their implementation at a time of nationwide constraints on public budgets – the austerity drive that was at the heart of the Cameron-Osborne project. Liberating the NHS assured readers that while the country’s “massive deficit and growing debt” meant “difficult decisions” had to be made, the Health and Social Care Act would “deliver better value for money and create a healthier nation”. The Cameroonian Conservatives, unlike Boris Johnson’s, were fixated on balancing the books. 

But a decade of real-terms cuts coupled with increased patient demand created severe pressures on the health and social care service. Local authorities, which had responsibility for public health passed to them, have had their central government grants relentlessly squeezed. Spending on public health services by councils was 8 per cent lower in 2017/18 than in 2013/14.

Despite this, the NHS was remarkably resilient through the peak of the coronavirus pandemic. Hospitals were not overwhelmed, ventilators did not reach capacity, sick patients were not turned away as they were in parts of Italy and Spain, and the swiftly erected Nightingale hospitals were left unused. 

And yet the service’s successful performance in meeting the largest public health challenge it has ever faced was down to its early and wise abandonment of all the provisions, structures and recommendations detailed in the Health and Social Care Act.

“The United Kingdom has not done well, by any international comparisons,” said Dr Murray. “But it’s interesting that the bit that probably did work pretty well was actually the NHS.

“It really did ignore the 2012 act by coming together. Organisations were swapping staff, swapping resources and moving patients around. In many parts of the country, they effectively acted as one. What we saw through Covid was quite the opposite of competition. Organisations did turn to each other to help each other and provided a coordinated response across whole geographies, often working with the voluntary sector too. They didn’t compete – they cooperated.”

Nick Davies, programme director at think tank the Institute for Government, has noted that throughout the pandemic “health bodies have done their best to work around the 2012 act”.  But as this government embarks on what is billed as a sweeping legislative agenda post-Covid, supposedly with the aim of revolutionising Whitehall, streamlining the civil service, and bringing public services into the 21st century, it would do well to remember that the best laid plans for “more top-down reorganisation” can go awry. Market dogmas and the competition agenda do not necessarily translate into better outcomes.

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