The wrong time for a radical reduction in NHS management?

27 January 2012

New details of the design of the NHS Commissioning Board raise serious questions about whether the NHS will have sufficient managerial capacity during the turbulent period ahead. In papers released yesterday, the Board describes the potential loss of talent as one of the ‘key risks’ associated with the transition process.

The Board will have 3,500 employees in all – a reduction of many thousands compared to the numbers of people currently performing similar functions in primary care trusts, strategic health authorities and the Department of Health. The budget available by 2014/15 will be approximately half of what is currently spent on the functions it will take over.

Although the Board’s proposed organisational structure resembles, at first glance, the current SHA and PCT cluster arrangements, the reduction in the numbers of people working at the regional and local levels is striking. The 4 regional sectors and 50 local teams will each employ around 50 people – making them much smaller than SHAs and PCTs, and altogether very different entities. This is particularly the case at the regional level, which is set to almost vanish.

Comparing headcounts is not entirely straightforward, as the new teams are not intended to perform exactly the same functions as the organisations that precede them. However, with the majority of staff in local offices focusing on commissioning primary care and other directly commissioned services, there will only be around 10 people in each locality to oversee the development and assurance of clinical commissioning groups – a task that will be critical if the reforms are to succeed.

There is a particular concern that many of the most experienced managers will leave the system, as the number of senior posts in the local and regional levels of the Board will be limited. Some of these people will find jobs in the emerging commissioning support organisations and clinical commissioning groups, but there is a risk that many talented individuals will look for more certain and more stable work outside of the NHS.

Last year, our independent commission into the future of leadership and management in the NHS showed how important good management really is. It found no evidence to support the notion that the NHS is currently over-managed – if anything, it may be under-managed. While the current financial environment makes it essential that the NHS gets maximum value for money from resources invested in management and leadership, arbitrary spending reduction targets are unhelpful.

There are clear risks associated with replacing the existing managerial structures with new and untested ones at a time when the NHS needs to focus on maintaining financial control and identifying productivity improvements to the value of £20 billion. The danger is that NHS organisations will be left with little capacity to make progress on the issues that matter most – such as quality of care and financial performance. This is particularly true during the transition period, while leaders focus instead on the challenge of implementing the reforms.

SHAs in particular have played a critical role in efforts to reconfigure services and improve productivity, and there is a real concern that the dramatically reduced capacity for strategic thinking and planning at the regional level will create a barrier to further improvement (see, for example our recent report on the future of health care in London).

The next 12-18 months will be the most hazardous phase of the government’s reform process. The NHS faces major structural upheaval with reduced capacity for management and leadership, at a time when resources are under extreme pressure. If the government dismantles the current managerial apparatus before the new structures are sufficiently developed, it risks losing talent from the NHS at the very time when it is needed most.

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