open space: CHAI will be a regulator with a very wide brief and more power than the bodies it replaces. How can it remain accountable to Parliament and the NHS, asks Kieran Walshe

Published: 07/06/2002, Volume II2, No. 5808 Page 25

Just when we thought the NHS was safe from any more structural reform, the Department of Health surprises us with a hefty new policy document - The NHS Plan: next steps for investment, next steps for reform - packed with a raft of freshly minted ideas.

Released in the shadow of chancellor Gordon Brown's Budget, Next steps contains some radical proposals for further change in an already changeweary NHS.

In particular, it heralds a major re-organisation - some might even say a revolution - in healthcare regulation. Under the proposals, a new, more independent regulator called the Commission for Healthcare Audit and Inspection will take over the job of scrutinising the NHS from the Commission for Health Improvement and the Audit Commission, as well as taking on regulation of the private sector from the National Care Standards Commission.

At the same time, a new Commission for Social Care Inspection will be fashioned out of the Social Services Inspectorate, the remains of NCSC, and some parts of the Audit Commission.

While the shake-up looks a little like premature re-organisation - CHI is only two years old, and NCSC only started operating last month - the logic of bringing healthcare regulation under one roof is pretty strong. But this is more than just a re-organisation - it also signals three major changes in the way the NHS will be regulated in future.

First, CHI has tried hard to build a collaborative relationship with NHS organisations - 'We are here to help' has been the mantra. And while it may not have seemed so for those on the receiving end of a CHI review, the commission has largely lived up to its improvement ideals. That seems likely to change.

CHAI is being badged by politicians as an inspectorate - tough, demanding and sceptical.

It may be pushed into adopting a more punitive, sanctions-based approach than CHI has done.

But to use an adversarial, inspection-focused approach across all organisations, regardless of how they perform, would be a disaster for CHAI's relationship with the NHS, and would limit its ability to bring about meaningful improvement.

Also, CHAI is going to regulate both the NHS and the private sector - which will immediately prompt calls for a level playing field and common standards and methods across both areas. That presents problems, because CHI and NCSC have taken different approaches to regulation.

CHI focuses on systems and processes for clinical governance, while NCSC standards are more about facilities and structures. CHI was moving towards directly inspecting the quality of clinical care but it seems unlikely that CHAI will want to adopt wholesale the NCSC standards and use them in the NHS. Plus it will be difficult to write good standards that cover everything from a small private clinic to a major acute hospital.

Another difference is that CHI has few formal powers - it relies on the DoH to enforce its recommendations. In contrast, NCSC can fine or even close down private healthcare providers.

CHAI will need to have a similar approach to standard-setting and enforcement across both sectors, or it will be accused of double standards.

Third, we are being told that CHAI will be more independent of both the DoH and the NHS than its predecessor bodies, because its board will not be appointed by the health secretary but by the NHS Appointments Commission.That may be true, but the acid test of independence will be in CHAI's powers to act. If it is going to be independent, CHAI should be funded independently, either through government allocation, which is not controlled by the DoH, or through fees charged to the bodies it regulates.

The latter approach is probably the best way to give CHAI autonomy.

CHAI should also have enforcement powers that do not depend on the health secretary or the DoH, and that it can exercise.But that means CHAI being able to require poorly performing trusts to make changes, fine them if they do not comply, and even take away their licence to provide some health services, if need be.

CHAI will be a powerful regulator, and it could be argued that the new chief inspector of healthcare may end up wielding more power and influence in the NHS than the permanent secretary at the DoH.

That makes CHAI's accountability to Parliament and the NHS a crucial concern.Rather than its board simply being appointed, perhaps a stakeholder model should be adopted in which different key groups - patients, professionals, NHS organisations, and managers - are formally represented.

All in all, the regulation proposals in Next steps seem to signal a real transfer of power from the DoH to CHAI, and a step towards the DoH disengaging from the day-to-day management of the NHS. But it will take political courage to make that happen, and to resist the fatal temptation to intervene in the health service in a crisis.

Kieran Walshe is reader in public management and director of research, Manchester centre for healthcare management, Manchester University.