In a move that took most people by surprise, the prime minister announced in March that the government would scrap NHS England and merge it into the Department of Health and Social Care.
The government has since ordered a review of all arm’s-length bodies. Given we might be about to feel the heat of a so-called bonfire of the quangos (or, to give them their less snappy name, quasi-autonomous non-governmental organisations), and given that NHS England – described by ministers as “the world’s largest quango” – represents the ambitious first item on this agenda, what can we learn from previous arm’s-length abolitions to ensure this, and any future quango closures (such as those outlined in today's NHS 10-year plan), are for the better?
Have a clear vision
Matthew Gill is the Institute for Government’s public bodies programme director and the co-author of the 2023 report How to abolish a public body: Ten lessons from previous restructures. He says the first step to a successful quango closure is to be clear about why you’re doing it. “It’s surprising how often abolitions can happen as a sort of kneejerk reaction to something without everybody sitting down and really articulating why we’re doing this. And: why is this a good enough idea to justify the disruption this is going to cause?” Gill says. “Really thinking that through is probably the most important single thing.”
Gill cites the abolition of the Jobcentre Plus executive agency as an example of where this was done well. There was “a really clear vision of how it should work, what efficiency should be achieved, how it was going to be led, and then taking staff along with the idea that Jobcentre Plus could be done better in this way… there was a real energy around a positive change process that was going to make things better.”
David Nicholson, who was chief executive of the NHS within the Department of Health from 2006 and remained as chief exec at NHS England for its first six months in 2014, believes the government has pulled the trigger on the announcement of the ALB’s abolition before thinking it through properly.
“Normally you’d go: ‘Steady, aim, fire’. And what they’ve done is they’ve fired, and now they’re trying to work out what the aim is and they’re trying to become steady,” he tells CSW. “It’s one thing to say, ‘Merge it or abolish it,’ but you have to have some basis beyond short-term political advantage to make it happen. And I think we’ve done it the wrong way round, and because of that, I think we’ve got real issues about the way it’s going to be managed.”
Gill agrees: “It’s not clear publicly that there’s been a very long gestation period in which all of the alternative options have been thought through systematically, and that’s what you would have wanted to have happened.”
Get your comms right
Another recommendation in How to abolish a public body is to announce quango closures sensitively.
Jon Restell, chief executive of Managers in Partnership, the union for NHS managers, says there was a “fair degree of shock” throughout the NHS at Keir Starmer’s out-of-the-blue announcement in March.
Before the general election in July 2024, health secretary Wes Streeting told The Sunday Times he had “absolutely no intention of wasting time with a big, costly reorganisation”.
Six months later, he doubled down, telling Health Service Journal that abolishing NHS England would “not make a single difference to the patient interest”. In the months that followed, senior figures at NHS England departed and plans were unveiled for 50% cuts to the size of both NHS England and DHSC, but it was widely expected they would remain distinct organisations.
“Normally you’d go: ‘Steady, aim, fire’. And what they’ve done is they’ve fired, and now they’re trying to work out what the aim is and they’re trying to become steady” David Nicholson, former head of NHS England
Restell says NHS managers “were definitely expecting a much smaller centre, and that NHS England’s role would change and it would become smaller” but “the decision to abolish was definitely a surprise”. And he says there was “a great deal of anger, a sense of disrespect that a lot of this was announced without trail. Most people are still finding out about key developments from the media. So it feels chaotic, it feels disorganised, and people are being asked to make some big decisions on the ground with very little information about what the next stage of these changes will look like.”
Streeting later admitted that the communication around the closure of NHS England was “not ideal”, but said it was inevitable due to the public nature of political restructures.
Get staff on board
Once the announcement is made, the key is to be “clear about what the vision for the future is, and take the staff in the organisation with you on that journey”, Gill says. “And it’s important to remember that some of the people involved… will have been through a number of reorganisations before,” he adds.
“NHS England itself has only been in existence for 12 years. So these are people who are used to churn. So the question is going to be, why is another major reorganisation now the right thing to be focused on? They’ll need to have a good answer to that for staff to keep them motivated to try and make the best of it.”
Restell says NHS staff need “a sense of the blueprint” from the government, along with clarity about what ministers want them to do. He calls for “some real hard talking” to let the NHS and the public know: “This is what we’re going to do. We’re going to cut waiting lists, we’re going to improve productivity. That may mean some other things will have to wait for investment and development…People want that honesty.”
Nicholson, who is now the chair of several NHS trusts, says the government will also need to have “real clarity” about each step of the transition. “Without a roadmap, it’s very hard for people to be engaged in trying to fill it in because you just don’t know what’s coming next.”
Gill points out that in an ideal world, a full business case would be put together before deciding to scrap a quango. But in reality, by the time a department is “ready to commit the resources to produce a full business case… you will already in substance have decided the direction of travel.” Instead, departments can make use of the government’s three tests for whether a public body should exist: effectiveness, independence and cost efficiency. Ministers should be asking the key questions early on, says Gill: “Is this going to work? Is it going to save money? Is there a conflict of interest somewhere in it? Is it operationally deliverable?”
Choose your transition team wisely
Another juggling act will be to get the right mix of skills to drive the transition, especially in NHS England’s case, where a key aim is to reduce duplication. One of the challenges, according to Gill, will be to keep people on board who might be helpful during the transition period, but who will not be part of the new setup.
“Working out how to incentivise them is important,” he says. “I don’t mean just financially. Seeing through an abolition or change like this can be a really interesting and positive career experience for people. It is in some ways more challenging than running an organisation in a steady state, and therefore something they can have as an accomplishment they take forward into future work.”
Nicholson explains to CSW how not to do it, based on his experience of setting up NHS England: “I literally went down a list of people in the Department of Health who I thought were the best people… and I went out and recruited them. What happened, of course, is once we’d done that, we had no one to talk to in the Department of Health because we’d ripped out all the [expertise].”
“It feels chaotic, it feels disorganised, and people are being asked to make some big decisions on the ground with very little information” Jon Restell, Managers in Partnership union
This capability drain meant the department “couldn’t really function properly in the new world, and so ministers got upset and irritated”, he says. “And we’ve ended up in the exact place that you might have expected,” he adds, nodding to Streeting’s efforts to regain control.
Before the announcement of its demise, several senior figures at NHS England announced their departures, including chief executive Amanda Pritchard. Sir James Mackey was appointed as transition chief exec and given a remit to “radically reshape how NHS England and DHSC work together”.
Nicholson notes that having the right senior leadership team in place for “any kind of structural change” is vital. In the case of the NHS England closure, he says: “We’ve got the best people,” namechecking Mackey, chief medical officer Sir Chris Whitty, and incoming DHSC permanent secretary Samantha Jones. “All three of them are, in their own right, world class in the way that they operate, and [in] the experience that they’ve had.”
But Nicholson also has a warning for civil servants. “In my experience, ministers have very little expertise in this area,” he says. “You have to be really clear about what their legitimate interest is, which is basically outcome, because getting ministers involved in this process will create more problems than it will solve.”
The next six months is a crucial time in which some big decisions will be made, which “will significantly affect the NHS’s ability to deliver those things that the top of government want us to deliver”, he says. “Getting the department and the top of the NHS properly designed to do that is a really important thing that Sam [Jones] and Jim Mackey need to be allowed to do.”
His advice is “to delight ministers, not to give them instant gratification” because they may think “‘great, we love all of this’, but they will never forgive you in the medium term if it all goes wrong”.
Legislation and timescales
Depending on a public body’s legal basis, merging its functions into a department may require legislation. Despite this, there will normally be many things the government can do in advance of changing the law. “You can start to operate in shadow form in the way you intend the new structure to look, but then formal legislation may have to follow and some changes can only happen when you get the legislation through,” Gill explains.
As NHS England is legally separate from DHSC, its abolition will need an act of parliament. “With something of this magnitude, they’ll probably be able to prioritise the legislation, find parliamentary time… but it’s still an onerous process,” he adds.
Streeting has set a target for the abolition to take place within two years, but Nicholson is sceptical. “They’ll be doing it ’til the end of the parliament,” he says. “Just take the legislation, my goodness. I can’t imagine the legislative timetable around all this.” His advice is to do as much as possible without legislation. “Every interest group in health and social care will want to get their bit stuck into the legislation. It’s going to take quite a time to get through. This is my experience of health legislation, anyway. I have the scars on my back, as they say.”
Restell warns that the speed at which government is aiming to make changes – encompassing not just the scrapping of NHS England but also the cuts to the wider health system – “is almost reckless in its implications”. He calls for “enough time for the right teams, structures, organisations to form, and if that means pushing things back by a few months or half a year, then do so”.
Bandwidth and buffer issues
In his announcement, Starmer said shutting down NHS England would bring the health service’s management “back into democratic control” and allow it to be “refocused” on priorities such as cutting waiting times and recruiting more nurses.
Will it really be as pain-free as the PM suggests?
Gill warns that the merger process itself will “significantly compromise” the government’s aims to reform the health service for “at least the next two-to-three years”. He says the challenge will be to avoid “overwhelming” ministers with operational detail around the transition, because they will also be “at risk of getting dragged into the detail of running the NHS to a greater degree than they are at the moment”.
“The merger process will significantly compromise the government’s aims to reform the health service for at least the next two-to-three years” Matthew Gill, IfG
Beyond the transition period, Restell expects major issues to arise from the amount of operational detail that will fall at ministers’ feet under the new structures being mooted. “There are 220 trusts, there are hundreds of thousands of operational decisions taken a day,” he says. “They will all now […] get escalated into the department, and I think that feels like a structure that is completely unworkable. I don’t think the department has the capacity to manage the NHS in that way, and I don’t think politicians would want to be in that position.”
He notes that Wes Streeting is “very gung-ho about this” but fears that “you’ll get paralysis because so much decision-making will be escalated up that they won’t be able to cope – and everything will come with political risk”.
Gill says the dangers of a lack of buffer played out when the General Teaching Council for England was axed in 2010, where “an unanticipated side effect of that was that government lost its buffer between ministers and teachers, and so that dragged ministers into more operational detail”.
“That’s not to say don’t do it,” Gill adds. “[But] you’ve got to create another structure that actively achieves this [buffer] within the department. How you delegate becomes really important, because if you imagine you were running a private business and you had poor performance somewhere, the answer is almost never to say, ‘I’m going to directly manage that function from head office.’”
Restell says he foresees the re-emergence of a “buffer between the operational realities of a huge service and political decision making”. One of the things to watch out for, he suggests, is “a restoration of what used to be called the ‘intermediate tier’ that used to be occupied by strategic health authorities… and whether you need a regional structure to transmit direction from the centre, but then take on the performance-management responsibility for individual trusts.”
Impact on priorities
Building an NHS fit for the future is one of Labour’s five missions. The government has set a milestone for this parliament of meeting the NHS standard that 92% of patients should wait no longer than 18 weeks to start consultant-led treatment of non-urgent health conditions. The mission also sets out three shifts the government wants to make: from hospitals to the community; from analogue to digital; and from treatment to prevention. But could the closure of NHS England – and the associated cuts being asked of the wider health system – put the mission and its aspirations at risk? Alongside the abolition and the cuts to the centre, Integrated Care Boards have been asked to cut their costs by 50% and NHS trusts are being asked to find 50% savings to their corporate costs. Restell says the announcement of the cuts for ICBs and NHS trusts was in some ways a bigger shock than the abolition. “We would argue as a union [there is] a real risk to the government’s health mission, because everyone’s attention, energy and focus will now be on managing the reorganisation, and not on service transformation or productivity gains,” he says.
He also fears the cuts will “take out people-capacity functions” that the government needs to deliver its long-term plans. He argues that cost reduction “makes it so dangerous for the government in terms of its mission to turn the NHS around, because to [meet the financial targets], you’ll get rid of a lot of your capacity, experience and skill. Leave aside motivation, long-term commitment and all the rest of it, all the stuff you’ll burn up by treating people in this way”. Restell adds that DHSC and NHS England are likely to lose many of their best people due to the way redundancy schemes normally work. “If you give people the chance to go with redundancy terms, then it’s likely to be the people who stand the best chance of getting a job somewhere else because of their experience or talent who will go. “A lot of very experienced leaders in NHS England have been going back into service jobs in recent years, probably guessing some of the direction of travel. And, of course, that makes your task much, much harder. Often in really big reorganisations in the NHS, you have to do mini-reorganisations to mitigate for all the people who are leaving too soon. They’re leaving before you’ve worked out your plan or you’ve got your bill through parliament.”
Putting power in the centre
A year before Starmer announced plans to abolish NHS England, the Re:State think tank – formerly known as Reform – called for the (then-Conservative) government to phase out the ALB as quickly as possible in its report Close enough to care. While the report’s co-author, Rosie Beacon, has welcomed the move to bring NHS England back into government control, she is not encouraged by the approach Labour is taking.
“The premise behind us recommending the abolition of NHS England was that the powers would be shifted elsewhere in the healthcare system, ideally being devolved outright to a regional combined authority level,” Beacon says. “We felt that was the best way to create a healthcare model where you could create the financial incentives that would reward prevention.” She thinks the devolved healthcare system she was calling for now looks unlikely to happen. “They’re entrenching a lot of power at the centre,” she says.
There is “clearly some strong rationale surrounding abolishing NHS England just purely from the perspective of how you run a government”, Beacon adds, pointing to the think tank’s report Quangocracy, which identified 100 organisations that could be brought back in house, closed or “reconstituted”.
But in terms of how you run a health system overall, “I don’t necessarily think it’s going down the ideal trajectory at the moment,” she says. “Especially since integrated care systems are having to halve their running costs by the end of the year as well, which further indicates that there’s a big centralising tendency.”
This article first appeared in the summer issue of the CSW magazine, which is out now