25 Feb 2015

Councils gain new powers over NHS – the key questions

Councils in Greater Manchester are to be given a key role in how the NHS budget is spent in the region as English devolution gathers pace. Why is this happening and what will it mean?

Councils in Greater Manchester are to be given a key role in how the NHS budget is spent in the region as English devolution gathers pace (Getty)

(David Cameron visits a hospital in Salford, Greater Manchester, in 2012)

What is planned?

It is not official yet, but the Manchester Evening News has obtained a draft “memorandum of understanding” between the region’s councils and the Treasury, which envisages the devolution of £6bn of health and social care spending. This is about a quarter of total public spending in Greater Manchester and will be confirmed on Friday.

What will change?

Councils are currently responsible for social care. From April 2016, they – along with clinical commissioning groups of GPs and NHS trusts – will also take over the health service budget from NHS England.

Greater Manchester will get a new directly-elected mayor who will have a key role in how this money is spent.

Manchester City Council says “it is about creating joint decision making on an integrated care approach, which recognises the link between physical, mental and social wellbeing”.

Will we still have a national health service?

National standards of free care will continue to apply to the NHS in Greater Manchester, but the hope is that by having greater control over the purse strings, councils, GPs and NHS managers will be able to allocate money in a way that is more responsive to local needs.

Lord Peter Smith, chair of Greater Manchester Combined Authority, said: “By ensuring that decisions about health for Greater Manchester are taken in Greater Manchester, we can ensure we have a system specifically tailored to the needs of people in our area.”

Councils in Greater Manchester are to be given a key role in how the NHS budget is spent in the region as English devolution gathers pace (Getty)

(Manchester city centre)

Why Greater Manchester?

Greater Manchester, with a population of 2.7 million, is seen as a trailblazer for the rest of England as the government devolves power to the regions following Scotland’s independence referendum.

With more powers devolved to Scotland, there is pressure for the English regions to have a greater say in how money is spent locally – and Greater Manchester is the first to benefit.

It was the first region to form a combined authority, made up of 10 councils, and would like to have control over all £22bn of public spending in Greater Manchester.

What has already been agreed?

In November, Chancellor George Osborne, who represents a seat in north-west England, agreed a £1bn devolution deal with Greater Manchester’s political leaders that will give the region control over transport, skills and house building.

They accepted Mr Osborne’s plan for an elected “metro mayor”, despite some leaders’ misgivings. But they rejected calls for a referendum on whether this new position should be created.

To the chancellor, it is all about “giving Greater Manchester more control over things run in Greater Manchester, which is what our vision of a northern powerhouse is all about”.

What are the concerns?

Richard Humphries, assistant director of the King’s Fund think tank, told Channel 4 News: “I think if the idea is that Manchester local authorities get round the table with their NHS colleagues and agree how the total NHS care budget is used, that is the right way forward, but the devil is in the detail.

“Who is accountable for the money? What happens when councils and their NHS partners can’t agree? To what extent is NHS England really letting go of the purse strings? Does it imply any organisational change, given the NHS has been convulsed by the last lot of reforms?”

Mr Humphries said the “bigger problem” was “the massive financial dark cloud hanging over the whole system”, with spending on social care down by 12 per cent in real terms over the last four years.

With the NHS being asked to save money too, some fear the government could be handing a poisoned chalice to the councils involved.

Could this happen in other parts of England?

In theory, yes, but the devolution model followed in one part of England may not be appropriate somewhere else.

Richard Humphries said: “I think everywhere has got to bite the bullet, but models will vary from place to place. What works for Greater Manchester may not work elsewhere.”