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Lansley’s Plans Could Set the NHS Back Three Years

Moves to transfer commissioning responsibility to GPs could cost the NHS its £20 billion efficiency savings target, and worse

The coalition government’s White Paper on the NHS is due to be published next week. It is widely expected to outline plans to hand control of as much as £80 billion of resources in the NHS from Primary Care Trusts (PCTs) to consortia of GPs.

Analysis by the independent think tank Civitas suggests such moves are likely to:

  • Lead to at least a one year dip in performance in the NHS in absolute terms.
  • Set the NHS back at least three years relative to what could be achieved without any structural change.

James Gubb, director of the health unit at Civitas, said, ‘The NHS is facing the most difficult financial times in its history. Now is not the time for ripping up internal structures yet again on scant evidence base, but for focusing minds on the task ahead and really getting behind the difficult decisions PCTs, as commissioners, will have to make.’


To predict what might happen with the restructuring of commissioning proposed by the Secretary of State for Health, researchers at Civitas analysed the impact of the last reconfiguration of commissioning on performance.

This occurred in 2006 when the number of PCTs was reduced in size from 302 to 152, through merging 222 PCTs and leaving 80 PCTs unchanged – a comparatively minor change compared with that now on the table.

Looking at the health watchdog, the Healthcare Commission’s, Annual Health Check ratings of PCTs on ‘quality of services’ and ‘use of resources’ pre-and post-mergers, the following effects were observed:

  • An absolute drop in performance on ‘quality of service’ and ‘use of resources’ lasting at least one year in PCTs that were merged.
  • Where PCTs were merged in 2006 ‘quality of services’ dropped sharply the year after, with the percentage of merged PCTs rated ‘good’ or ‘excellent’ falling from 34% in 2005/06 to 12% in 2006/07. The percentage of merged PCTs rated ‘good’ or ‘excellent’ on ‘use of resources’ also fell, from 5% to 4%.
  • This compares with significantly improved performance in the 80 PCTs that were not merged. In terms of ‘use of resources’, the number of PCTs that were not merged rated ‘good’ or ‘excellent’ jumped from 15% to 34% between 2005/06 and 2006/07. In terms of ‘quality of services’, the number rated ‘good’ or ‘excellent’ improved from 35% to 39%.
  • A period of three years before the relative performance of PCTs that were merged reached pre-merger (i.e. 2005/06) levels against those that were not.
  • Ultimately, merged PCTs did subsequently catch-up with those that were not on ‘quality of services’, but it took three years to do so. As of 2008/09, merged PCTs remained further behind PCTs that were not merged on ‘use of resources’ than they were in 2005/06.

These timeframes are consistent with other evidence on central government restructuring and hospital mergers.


In 2006, South Staffordshire PCT was formed from the merger of five PCTs: Burntwood, Lichfield & Tamworth, Cannock Chase, East Staffordshire and South Western Staffordshire PCTs.

Of the failure of South Staffordshire PCT to provide proper oversight of quality of care at Mid Staffordshire NHS Foundation Trust, where up to 1,200 people died unnecessarily, the Francis Inquiry reported: ‘several comments criticise the national reorganisation of PCTs in 2006/07, along with the resultant lack of capacity and organisational memory’.

The written submission from Cure the NHS said the following:

‘…the first function of a newly reconfigured organisation should be to take stock of the services that it was providing: to understand what it was commissioning and how well this was being delivered. This does not seem to have happened at the PCT.’


The restructuring of commissioning currently proposed by government is widely seen by policy experts as a major and radical change. Kieran Walshe, professor of health policy at Manchester Business School, recently told the Financial Times:

“This has to be the biggest reorganisation of the NHS since 1974. Apart from the existing NHS foundation trusts, there is very little of the existing architecture that will be left unchanged. This is a massive structural upheaval, and it looks to be very expensive, and very risky to do it so quickly.”

At the same time the NHS is facing the most austere time in its history. King’s Fund/IFS have estimated that, with near-static real-term increases in funding, to do little more than maintain existing standards of care (in the face of inflation and rising demand) the NHS will have to get in the region of 4-6 per cent more for its money year-on-year over the next five years.

Andrew Lansley has reaffirmed the previous government’s commitment to driving £20 billion’s worth of efficiency savings in the NHS by 2014.

Yet, if the kind of performance drop seen with the merging of PCTs in 2006 – a comparatively minor change – is repeated with more fundamental changes proposed by government, the NHS’s efforts could be set back by at least three years. The bulk of proposed £20 billion NHS efficiency savings rely on efficiencies driven by commissioning: the evidence presented suggests that these will not be made.


The only possible justification for the restructuring is that GPs will be universally and significantly better at commissioning than PCTs. The evidence does not support this.

The bulk of evidence comes from GP fundholding in the 1990s. This suggests:

  • GP fundholding was associated with improvements in speed, access and responsiveness of secondary care, reductions in waiting times, slight reductions in referral rates and costs, and widening the range of available services.
  • A review by the King’s Fund think tank suggested GP fundholding was ‘the most promising’ of the 1990s market-based reforms.


  • GP fundholding failed to reduce costs as much as expected. Little effect on the rate of innovation was observed and fundholding was associated with lower patient satisfaction with services. Little research was carried out on the impact of fundholding on health outcomes.
  • GP fundholders were self-selected volunteers for the programme, tending to be well-organised practices in middle-class areas, enthusiastic about taking on commissioning budgets. There is no evidence to draw on to support GPs across the country taking on commissioning as consortia, as is proposed by the government.

The current incarnation of GP commissioning, practice-based commissioning, is proving less effective. In a recent survey of practice-based commissioners by the Department of Health, 41% of respondents indicated that practice-based commissioning has not influenced (i.e. neither ‘a great deal’ nor ‘a fair amount’) the clinical practice of the GP practices within their group.

James Gubb said: ‘Ruling out the fiscally implausible possibility of significant extra spending on the NHS, past evidence on restructuring in the NHS suggests any slight blip in Lansley’s plans will mean one thing for patients: a return to rationing, either by waiting or by reductions in services’.


For more information contact James Gubb on: 020 7799 6677 / 079 3024 3570

Notes for Editors

i. Civitas is an independent social policy think-tank. It receives no state funding either directly or indirectly and has no links to any political party. Civitas’s health policy research seeks to take an objective view of health care in Britain. It aims to offer an improved perspective on how best to deliver equitable and high standards of health care for all.

ii. The full study can be accessed below.

iii. The raw data can be accessed here.

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