Mike Farrar: the politics of decentralisation

Looking back on the last decade or so of policy-making in healthcare – in the NHS or wider afield – a constant issue governments have faced has been balance between centralisation and localism. Advocates of centralism stress and place value on “the need to standardise” and emphasise “equitable access”. Meanwhile, advocates of localism prize the importance of “clinical freedom” and “encouraging innovation”. Behind such ideas lies this recurrent, fundamental, and often unhelpfully polemical debate about the best way to ensure that equitable high quality health care is available to all of a country’s citizens, rather than an elite few, or with a wide gulf in the citizen’s experience of the quality of care.

So it is well worth reflecting on the way policymakers and senior leaders in the UK have addressed the question over the last 15 years to see what that tells us about the future.

To begin, it is important to recognise the ideological factors in play here; for example, people in the UK fundamentally believe in the idea that access to healthcare is a universal right, and have strongly supported this principle since the inception of the NHS. But in recent years the policy development of using choice and competition to move away from a universally available average system to a higher quality more personalised individually tailored system has begun to challenge these fundamental assumptions. In light of this, the issue of centralist versus localist has often and misleadingly been equated with the view that centralism reflects the predominant desire for equity, whilst the non-centralist view has been equated to a less managed, deregulated world, in which a market philosophy sits more comfortably.

In this respect, it has led to the decentralisation policy question becoming a political question. Unhelpfully, this has turned what should have been an evidence-based debate about policy into a hotly-contested political debate. In 1997, the incoming Labour government did not hesitate to declare its preference on the spectrum, moving immediately to centralise and standardise the offer for patients. It abolished the previous Conservative government’s flagship GP fundholding programme, which was perceived to be highly partial, and, after eight rounds of applications, had only just managed to cover more than 50 per cent of the nation. It put in place: Primary Care Trusts to commission services with universal coverage; the National Institute of Health and Clinical Excellence to standardise decision-making on treatment; and performance-managed national targets.

Interestingly, there was an opportunity to decentralise in 2000 when the Government set out the NHS plan, a “national framework within which they could have encouraged local freedom”, and backed this with a huge increase in resources. But the desire of Ministers to account for how these resources would be used to improve waiting times led to a centralised performance management regime, not empowerment of frontline organisations. In their defence, policymakers of that time might point to the creation of Foundation Trusts, arguing that the decentralisation of power was focused on provider side policy, rather than commissioning. But many – including some former Ministers – would say that the aspirations to liberate Foundation Trusts to act as real local agents was frustrated, first by political concessions and then by an overzealous regulatory regime. To this day, many Foundation Trusts question the notion of having thousands of members as part of their governance arrangements.

A second big opportunity for decentralisation came three or four years later. The NHS was performing well against central targets, with dramatic waiting time reductions across the country; new money was coming on stream, and there was better understanding of how patients moved through the healthcare system. The modernisation agency helped managers to drive change at local level. But then the NHS overspent its vastly improved resources by over half a billion pounds, a hugely disappointing performance. Cue a change in regime to tighten, rather than loosen, central grip. Twenty-eight Strategic Health Authorities became ten. The new regime had to recover the financial position and deliver further improvement against nationally-defined standards.

But, whilst the centralist culture of this regime was felt strongly across the NHS, a new rhetoric of decentralisation emerged. So Ara Darzi’s desire to promote quality as a priority in the NHS was accompanied by encouraging local flexibility to approach and define the standards locally. But this happened just at the stage when all the worldwide evidence pointed to standardising and codifying best practice in a series of mandated care bundles or standard interventions. Ironically, even when Ministers were committed to decentralise, they may have got the balance wrong.

And so on to more recent times. It may well have been the last phase of “NHS-experienced centralism” and misplaced localism that shaped the current Secretary of State’s desire to trigger major change and genuinely facilitate local decision-making. The Coalition Government’s policy on the NHS in 2010 was a major surprise to the NHS. It did not see such a move coming because it was widely thought to be performing well, and NHS satisfaction levels were high. And there lies the rub. Given the context of time, it is indisputable that the centralising measures, alongside huge financial growth, proved their worth and clearly had a major impact on driving down waiting times and infection rates. But there is a great deal of doubt as to whether they are the right approach for the future. There were also clear downsides to the predominant centralist approach that have now created a legacy problem for the future. For some in the NHS, the last decade disempowered local managers and clinicians, and gave rise to the absence of local innovation.

So the question must be asked: is this going to come back and haunt us? My view would be yes. The big issues we now face, such as chronic disease and the need for better lifestyle management, make it essential that the NHS engages with public and patients differently, so as to connect better to the communities it serves.

This requires much more local sensitivity in policy and decision-making than we have previously seen. This time localism needs to be real if we are to succeed. And securing this paradigm shift in the balance between centralist and localist policy is, therefore, essential. Yes, standardisation has a part to play if we are to reduce local variations in quality and experience. But only where the evidence says this is the best thing for our patients. It must not get in the way of genuine local engagement and leadership. History shows us, however, that the popular rhetoric of decentralisation has rarely been delivered.

In a tax-funded, state-controlled system, the pressure will always be on Ministers and managers to account for the NHS, based on the lowest and poorest performance. Centralisation typically reduces variability, keeps Ministers better-informed and allows them to appear more accountable to their constituents. In the NHS, perhaps more so than in other healthcare systems around the world, the taxpayers and the service-users value fairness and equity above all else. Decentralisation in this environment will always be challenging. So what does all this mean for current policy? Once again, we have a political commitment to decentralise, empower the frontline and allow local priority-setting. But I worry that it will face the same problems that previous attempts to decentralise ran into.

Political courage is a rare commodity. The complexity in the implementation of these reforms may well undermine their localist aspirations. If the shackles of tight centralised performance management do come off, then the depth of the “j-shaped” curve will likely as not be steep. Defensibility of this performance dip will be tricky for Ministers facing an oncoming general election. But only time will tell. And commentators a decade from now will no doubt reflect on the age old healthcare conundrum: to just talk the talk or to really walk the walk of decentralisation.

This essay appears in The next ten years published by Reform.

www.reform.co.uk