The importance of a proportionate regulatory system

We are starting to see early signs of how the regulatory system will evolve to align with local collaboration through sustainability and transformation partnerships and integrated care systems. In the absence of any legislative change, the challenge is in making sure that accountability mechanisms underpinning system-level partnerships complement the regulatory obligations of the organisations that make up these local partnerships.

NHS trusts are already concerned about the level of regulatory burden they experience and there is a risk that the intentions for local systems to take on oversight roles simply adds an extra layer into the assurance system.

STPs and ICSs are seen nationally as the mechanism to deliver the aspirations of the Five Year Forward View. NHS trusts support the principle of collaboration at the heart of STPs and ICSs, with many driving this collaboration at a local level and spending considerable time developing relationships and plans.

Unclear policy

However, in response to NHS Providers’ latest survey on their experiences of the regulatory system, only one in five (20 per cent) trusts said that they feel the national policy direction for the overall system architecture is clear.

Not only will STPs and ICSs be a vehicle for leading transformation and supporting the long term sustainability of local health economies, they will also be involved in the oversight of the performance of organisations within their footprint

It is vital that local plans are driven by local leaders and decisions should be taken by the organisations that make up a local health economy. But having a clear and consistent direction of travel nationally is also needed to develop a regulatory and oversight model that supports this new way of working and doesn’t duplicate existing oversight arrangements.

The refresh to the planning guidance published last month offered an early indication of how the regulatory system will start to evolve to align with system collaboration. NHS England and NHS Improvement described their intention to focus on the assurance of system plans, rather than organisation-level plans, for those ICSs judged mature enough to become operational.

The refreshed guidance set out the intention that “ICSs fully adopting a systems approach will operate under a more autonomous regulatory relationship with NHS England and NHS Improvement, who will exercise their intervention powers alongside the system leadership.”

This provides a helpful indication of how system regulation and oversight is developing and what model may be adopted in the future. Not only will STPs and ICSs be a vehicle for leading transformation and supporting the long term sustainability of local health economies, they will also be involved in the oversight of the performance of organisations within their footprint.

Need for flexibility

The majority (61 per cent) of trusts responding to NHS Providers’ survey said they agreed that STPs and ICSs should have the flexibility to develop local assurance frameworks to hold organisations to account at a local level and more than half agreed that system oversight could be aligned with regulatory requirements at an organisational level. However, they were also clear that there are challenges with STPs and ICSs taking on a performance management role.

If ICSs take on a key role in agreeing what remedial action needs to be taken if a trust has financial problems or issues of quality – as set out in the planning guidance refresh – this could test local relationships to their limits

The most obvious challenge is that there have been no legal changes to the accountabilities and statutory duties of trusts or the regulators, and STPs and ICSs have no legal status and derive their decision making powers from the statutory bodies which comprise them. This means that NHS Improvement is still required to hold individual trusts to account for their performance and if performance is at risk, it is still NHS Improvement that will be required to intervene.

You can, therefore, see a model emerging in which trusts are held to account by their clinical commissioning groups, NHS Improvement, Care Quality Commission and also their STP or ICS.

There is a danger that any new oversight responsibilities for STPs and ICSs will add further complexity to, or potentially duplicate, the existing institutionally-focussed regulatory framework. These complexities are not insurmountable, but we need an honest conversation about how to develop accountability mechanisms which support system-level partnerships and complement the statutory obligations of their component organisations, rather than add an additional and duplicative layer of bureaucracy.

Trusts already feel that the regulatory system is hugely burdensome and tell us that there is significant room for improvement in how the regulators and national bodies coordinate their approaches and requests. At a time when trusts are seeking to meet rising demand and incredibly stretching operational and financial targets, a risk-based and proportionate regulatory system is more important than ever and additional regulatory intervention risks overloading providers.

We are wholly supportive of the national emphasis on local leadership, relationships and trust between system leaders as central to the success to collaborative working. But trusts responding to our survey were doubtful that local systems currently have the infrastructure or leadership to be able to take on an additional oversight role.

Unless proper leadership, control and direction are designed into new ways of working, the danger is we risk overloading leaders and putting considerable strain on local relationships.

There is an interesting dynamic where STPs/ICSs, which derive their decision making powers from the statutory organisations which comprise them, could be holding those organisations to account. If ICSs take on a key role in agreeing what remedial action needs to be taken if a trust has financial problems or issues of quality – as set out in the planning guidance refresh – this could test local relationships to their limits.

The consequence of the changing NHS system architecture is that trusts are juggling a growing number of roles and expectations, and the regulatory framework should recognise and respond to this. There is an opportunity for the regulators and the provider sector to co-produce a proportionate approach to oversight that balances the regulation of organisations and oversight of systems, and balances appropriate regulatory intervention with support to providers as they work to transform services.