Nine regions to take over £13bn specialised services spend

The commissioning groups will initially be set up as joint committees of NHS England and the relevant integrated care systems in each region (see map below and table at end).

During 2023-24, NHSE will retain control of the finances, liability, contracting, and staff, but it will make decisions jointly with the committees.

However, under plans confirmed at NHSE’s board meeting last week, the joint arrangement is due to be a stepping stone to “full delegation” of specialised services to ICSs from April 2024, “subject to further board consideration and decision”.

At that point, HSJ understands, the nine regional committees are likely to continue as “multi-ICS collaborations”. The nine patches are similar to the 10 groups which commissioned most specialised services before NHSE was created in 2013. They are based on patient flows. Only one ICS — the North East and North Cumbria — will commission specialised services without neighbours.

Yesterday’s decisions come after earlier plans for full delegation to ICSs in April this year were dropped amid concerns about readiness and financial stability. The NHSE board heard that only two ICSs — south east and south west London — told NHSE they were ready. The two will not get full delegation this year but will take part in “pathfinder” work to inform 2024-25.

Services set for delegation

The NHSE board also confirmed which specialised services would be jointly commissioned by the committees in 2023-24, and were due to be delegated to the “multi-ICS collaborations” beyond that.

Of its total list of 154 specialised services, it has deemed that 59 services (worth £13bn) “are suitable and ready for ICB leadership in April 2023”; while 29 services (£1.5bn) are “suitable but not yet ready for greater ICB leadership”, including all services in scope of mental health, learning disability and autism provider collaboratives. A further 89 services (worth £1.3bn) will remain nationally commissioned, including all 78 highly specialised services. The full split is published in NHSE’s board paper.

High-cost drugs, devices, and “other national programmes”, which account for the remainder of NHSE’s total £23bn specialised budget, will also “continue to be held centrally”.

Perverse incentives

Proposals to delegate specialised commissioning are controversial for several reasons. 

Some providers, professionals and user groups are concerned that ICSs, once they are in control, will defund regional specialised services providers, which will often be outside the ICS’s area, in favour of shifting spending to their local trusts. This could destabilise the services.

There is particular concern among providers about a move to population need based allocations for specialised services, allocated to each ICS patch, from April 2024. Since 2013, specialised spending has been paid directly from NHSE to providers based on their historic spending.

One of NHSE’s new non-executive directors, eminent medical scientist Sir Mark Wallport, raised significant concerns about the move at yesterday’s board meeting. There were “risks of perverse incentives”, he said, arguing there could be fragmentation of provision and dilution of quality.

NHSE director of specialised commissioning John Stewart, who presented the proposals, highlighted that NHSE would remain ultimately accountable for the services, and would retain control over “setting the national standards and the clinical access policies”, which was “absolutely critical”.

He said the proposed joint commissioning would achieve benefits of “population health focus on the appropriate services, at the same time as not losing the rigour of national standards and clinical policies”.

He also said NHSE would use 2023-24 to “really test the mechanics” of ICS specialised commissioning systems and processes “because we do need to make sure that we don’t lose control of a very large area of spend”.

Julian Kelly, NHSE chief finance officer, argued that the current system — where regional providers, often in big cities, receive budgets regardless of who uses them — means “there are people in the country who are not getting the services they should get because they are not near major cities”.

He said: “The thing I would say to major specialist centres is, their challenge is in the next two years they’ve got to work out how they improve their own referral networks in the bits of the country they haven’t so far reached.”