Farewell PCTs

Posted on October 2, 2011 · Posted in Health Service Review

Handing over health commissioning to GPs in place of PCTs is a big step, which cannot be achieved in one ‘big bang’, the Department of Health has recognised. Rather, the transfer requires managed stages – which, ironically, initially involve greater centralization, before eventually becoming a more localized commissioning process.

In December, DoH announced that PCTs would move into ‘clusters’, to improve management and administrative efficiency and start achieving cost savings. Single executive teams will be formed for the new clusters by June this year – though this should be brought forward to April, the House of Commons Health Committee has argued. The MPs also suggested that the clusters be responsible for the development of commissioning in their area. The committee is particularly concerned at the potential conflict between the tough efficiency targets of 4% annually for four years in a row, with the process of a major change management programme.

Addressing the health committee, NHS chief executive Sir David Nicholson explained the purpose of the clustering. Firstly, clusters will oversee delivery during the transition and the close down of the old system,” he said. In so doing, they will ensure PCT statutory functions are delivered up to April 2013. Secondly, clusters will support emerging consortia, the development of commissioning support providers and the emergence of the new system. In so doing, they will provide the new NHS Commissioning Board with an initial local structure to enable it to work with consortia. In creating clusters, our aim is to maintain the strength of the commissioning system in light of the significant financial challenges ahead.

The Nuffield Trust endorsed the Health Committee’s concerns about the running-down of existing PCTs while forming the clusters. Its director, Dr Jennifer Dixon, says: “PCT clusters will be, amongst other things, helping to shape the development of GP Commissioning Consortia, commission services that maintain or improve quality and manage down PCT legacy debt. The clusters are to be operational by June 2011, but given the turmoil in primary care trusts, should form as soon as possible.

“It is critical that these clusters attract and retain the best quality talent and so they should be given more definite assurance of their longer term role and existence. There may be a long-term role for them, for example to help manage financial risk, provide commissioning support, or even to help manage the contracts for local primary care providers on behalf of the NHS Commissioning Board.

Anxieties are also expressed by foundation trusts. Paul Assinder FCCA is director of finance and information of Dudley Group of Hospitals NHS Foundation Trust and immediate past president of HFMA, the Healthcare Financial Management Association. Assinder says: “Providers recognise the logic and rationale behind clustering PCTs for a number of reasons. Firstly there is now an understandable flight of senior staff from local PCTs.  This is manifest in the conurbations in particular, with many of the most able staff securing positions with foundation trusts, or linking themselves to community provider arms and being transferred into foundations under the ‘transforming community services’ – TCS – initiative.  In such a climate, fuelled by significant management cost savings in PCTs, sharing the back office is inevitable.  Clustering the remaining PCTs at least provides some depth and continuity of commissioning effort through the transition.

“Secondly, change always brings heightened financial risk and the development of a wider commissioning brief provides improved opportunities for risk pooling arrangements. This brings some interesting tensions between the likely interests of local PCTs, which carry statutory financial duties in 2011-12, and clusters which operate under a flag of convenience only.

“Third, much commissioning is in fact already undertaken at regional and sub regional level – eg learning difficulties, renal services etc – and with the planned demise of SHAs – which host many of these specialist commissioning hubs – aligning these responsibilities with clusters makes good sense.  Moreover, even after GP commissioning is fully established, pooling commissioning resources for specialist services will still make good sense.

“And finally, most FDs of provider trusts recognise that delivering productivity gains of the magnitude required in future years will require co-operation across wider geographical and organisational boundaries than hitherto contemplated.  A wider commissioning focus can only assist collaboration between groups of providers to rationalise service provision.


“For providers, however, this clustering approach does cause confusion and de-stabilisation, particularly as it comes at a time when local GP pathfinders and embryo GP commissioners are finding their feet.  FTs are effectively being pulled in two opposite directions by competing centrifugal forces.    We are trying to respond to the new centralised commissioning bulk of PCT clusters at the same time as opening a dialogue on a micro level with our future customers.

“For my own trust, whilst in the West Midlands the SHA has made it clear that it will hold the Black Country Cluster of PCTs responsible for the delivery of contracts for 2011-12, these are currently being negotiated by the local Dudley PCT, who in turn are required to obtain the explicit ‘sign-off’ of putative GP consortia. In some instances the three agencies are giving us very different commissioning signals about the range and volume of services we should plan for going forward.”

Julia Rudrum FCCA, assistant director of assurance at Brighton & Hove NHS (a PCT), stresses that each area has its own issues about the process of setting-up clusters. While in some regions PCTs are losing senior management staff, in Sussex three chief executives were still in place – with each applying for the new CEO role at the PCT cluster.

One of the issues identified by Rudrum is the governance arrangements for the clusters. “I haven’t seen any guidance relating to the non-executive element,” she says. Rudrum is also unpersuaded about the legal basis for the operation of the clusters. “Those governance issues will need to be worked through and quickly,” she says. “The feeling here is that the arrangements will have to be sorted out sooner, rather than later.”

Rudrum continues: “Each cluster will have to create new governance structures, which takes time to put in place.” However, she accepts that bringing together administrative operations of PCTs should be able to deliver significant savings – provided the new structures can be pulled together quickly and efficiently.

But she also shares the anxieties of the Health Committee. “Our concern is that all PCTs are going through restructuring, at the same time as identifying savings. You need strong leadership going through that process. By putting that leadership into doubt, I don’t think that helps. I can understand the logic nationally, given that there are a lot of interim chief executives [in place]. But in Sussex we have three substantive chief executives who have to compete for that post. It is complicated.” She adds: “This level of revolution is always risky.”

And the risks of revolutionary change in commissioning will not lesson once the clusters are established, Rudrum warns. “There is a huge learning curve for the majority of clinicians.” With all this uncertainty and the simultaneous planning for short-term and medium-term reform, the mood within PCTs is not good. “It’s difficult to be positive sitting in a PCT at the moment, but people are trying to be as positive as possible,” Rudrum explains. “It’s not a comfortable place to be.”