Organisation objective

• NHS Long Term Plan
• NHS Mandate from Government

Executive summary

NHS England is the accountable commissioner for a portfolio of ~150 specialised services. The list of services is set by the Secretary of State for Health and Social Care through regulations.

Following Board consideration and decision in February 2023, commissioning responsibility for 59 specialised services has been delegated, since April 2023, to nine statutory joint committees formed between integrated care boards (ICBs) and NHS England Regions. These joint committees cover the entire population of England.

This important, yet deliberately cautious approach to achieving the benefits of integrated, population based commissioning arrangements for specialised and non-specialised services was agreed by the Board as a transitional step towards delegating full commissioning responsibility for suitable specialised services to ICBs from April 2024.

The paper asks the Board to agree plans for moving forward in 2024/25 with this important enabler of integration and follows a robust assessment of ICB system readiness to take on greater delegated responsibility for suitable specialised services.

Maintaining the careful and considered approach set by the Board, the recommendation is to:

i) support full delegation to ICBs in the East of England, Midlands and the North West regions of England; and

ii) support one more year of statutory joint commissioning arrangements between NHS England and ICBs in the South West, South East, London and the North East and Yorkshire regions of England.

Regardless of delegation status, NHS England will remain the accountable commissioner for the entire portfolio of specialised services and maintain responsibility for setting consistent national standards, services specifications and clinical access policies.

Action required

The NHS England Board is asked to:

• Note that the list of services that are considered suitable for delegation from April 2024 remains unchanged from 2023/24 – 59 specialised services (Annex 1).
• Approve the recommendations of the National Moderation Panel (which considered joint ICB and NHS England regional assessments of system readiness) (paras 9-11) and endorsed by the NHS England Executive to:

a) Support full delegation of suitable specialised services to ICBs across the East of England, Midlands and the North West regions; and,

b) Support the continuation, for one final year, of statutory joint commissioning arrangements between ICBs and NHS England across the London, South East, South West and the North East and Yorkshire regions.

• Give delegated authority to relevant Regional Directors to sign the final delegation agreements on behalf of NHS England ahead of April 2024 (paras 12-15).
• Note the steps being taken to ensure commissioning capacity and capability, financial control and provider stability is maintained as we carefully implement these important commissioning reforms (paras 17-31).

Background

1. A paper was taken to the Board meeting in February 2023 setting out the background and context to why NHS England is seeking to delegate commissioning responsibility for suitable specialised services to ICBs. These reforms are ultimately about improving patient care and outcomes by enabling the planning and commissioning of services to be joined up at a population level across whole pathways of care i.e. across specialised and non-specialised services.

2. That paper contained further detail on:

• The key features, and safeguards of specialised services commissioning that will remain in place under delegated commissioning arrangements, including NHS England’s continued role in:
  • Having overall accountability for the full set of prescribed specialised services, regardless of whether day to day commissioning responsibility is delegated to ICBs or retained by NHS England;
  • Setting consistent national standards / service specifications and clinical access policies across the entire portfolio of specialised services;
  • Controlling nationally the commercial and funding approaches for both high cost drugs and devices; and
  • Maintaining a strong national clinical leadership infrastructure through 42 Clinical Reference Groups (CRGs) to provide leadership and expert advice across the full portfolio of specialised services.
• The service portfolio analysis that was undertaken to determine the 59 services that were deemed to be suitable and ready for greater ICB leadership and the remaining, predominantly highly specialised, services which would be retained by NHS England. This was approved by the Board.
• An overview of the joint working model for 2023/24 that would delegate 59 specialised services to nine statutory joint committees formed between NHS England Regions and ICBs from April 2023, as a transitional step to moving to full delegation from April 2024. These joint commissioning arrangements represent partial delegation under Section 65Z5 of the NHS Act 2006 (as amended by the Health and Care Act 2022). These arrangements were approved by the Board and new joint commissioning arrangements went live in April 2023.
• Changes to the financial architecture for specialised services, including moving to population-based budgets to support the move to delegated commissioning arrangements.

3. Since then, the national and regional specialised commissioning teams have been working with ICBs to support the new joint commissioning arrangements that went live in April 2023, alongside preparing for a move to full delegated commissioning arrangements from April 2024 subject to a further assessment of system readiness. The decision made by the Board to delegate commissioning responsibility to joint committees has provided a safe platform to progress to delegation for those systems that are ready from April 2024. They have brought together ICBs and NHS England with joint responsibility for those services to better understand the needs of local populations and plan care across whole pathways.

4. The next section sets out the recommendations of the National Moderation Panel, chaired by NHS England’s Chief Financial Officer, that met in October to discuss the regionally-led assessments of system readiness. These recommendations have also been considered and endorsed by the full NHS England Executive.

Recommendations from the National Moderation Panel

5. The National Moderation Panel met on 20 October to agree the service list for delegation, discuss the proposed model for delegation in 2024/25, and the position across the regions following the regionally led assessment of ICB system readiness against an updated pre-delegation assessment framework.

Service list for 24/25

6. Since the publication of the output of the Service Portfolio Analysis in February 2023 as an annex to the NHS England Board paper on delegation, we have undertaken further work with ICBs, regional commissioners as well as clinical and national commissioning colleagues.

7. Key feedback from this work is that following delegation to Joint Committees in 2023/24 there is a need to maintain stability for systems and minimise changes to the parameters to delegation that systems are preparing for. As a result, the decision was made that we maintain the 2023/24 list of suitable and ready services into 2024/25. Therefore, the final list of services deemed suitable and ready for delegation for 2024/25 remains unchanged (see Annex 1).

8. It was also agreed that by April 2025, there must only be two lists – delegated services and retained services. Therefore, work is underway to review the services that were deemed to be suitable but, for a variety of reasons, not yet ready for delegation to determine whether by April 2025 they will be reclassified for delegation or be retained, at least in the medium term, by NHS England.

Regional assessment of ICB readiness

9. The outcome of the regionally-led system readiness assessment process against the updated pre-delegation assessment framework resulted in:

• Category 1 (delegation without conditions) – 20 ICBs (East of England, Midlands, and North West regions)
• Category 2 (delegation with conditions) and Category 3 (delegation with intensive support) – 11 ICBs (London and South East regions)

10. The South West and North East and Yorkshire regions proposed a continuation of the current joint working arrangements for an additional transition year, with a view to moving to full delegated commissioning arrangements from April 2025, and so did not categorise their ICBs.

11. Set out below are the key headline recommendations made by the panel:

Delegation agreement

12. For those ICBs that will be progressing to full delegation from April 2024, a delegation agreement for specialised services has been prepared for implementation in 2024/25. This agreement will formally delegate to ICBs the 59 specialised services deemed suitable and ready for greater ICB leadership. The agreement uses powers given to NHS England under section 65Z5 of the NHS Act 2006 (delegation and joint working), as amended by the Health and Care Act 2022.

13. The delegation agreement for specialised services builds on the agreements put in place for primary care services but amends the agreement to the specific needs of specialised services. This includes introducing ‘developmental arrangements’ that allow NHS England to tailor the agreement in line with the local circumstances and readiness of the specific ICB; and, requiring ICBs to establish a collaboration arrangement across neighbouring ICBs to ensure planning and commissioning of services is always undertaken at an appropriate scale.

14. Further documents have been produced to support the implementation of delegation, including an optional template ICB collaboration agreement and revised template terms of reference for joint committees for use from 2024/25.

15. For those regions that are proposing to roll-over existing joint commissioning arrangements from 2023/24 to 2024/25, the existing Joint Working Agreement can be extended subject to agreement of the Partners prior to 31 March 2024. 

Implementation

16. A comprehensive programme – the Future Commissioning Model Programme for Specialised Services – is in place to ensure the safe implementation of the planned commissioning reforms set out above. The programme is particularly focused on ensuring:

• expert commissioning capacity and capability for specialised services is retained within the system;
• the new financial architecture and financial flows does not lead to any loss of financial control with respect to specialised services and that there are no sudden and de-stabilising impacts on providers;
• the necessary data and business intelligence requirements to support effective commissioning are in place; and
• there are robust oversight and assurance mechanisms in place for delegated services, including in respect of quality.

Commissioning capacity and capability

17. Commissioning hub teams, which include those NHS England regional staff who support the commissioning of specialised services now, will initially be hosted by NHS England in 2024/25 as a transition year, including in those regions where ICBs will be taking on full delegated commissioning responsibilities. They will support delegation of the services set out in Annex 1, and staff working in these NHS England hosted hubs will also continue to support the exercise of commissioning activity related to those specialised services that are retained by NHS England.

18. Commissioning hub teams will then transfer to host ICBs from April 2025. This will coincide with the delegation to ICBs in the remaining four regions, and it will be at this point that employment of staff will transfer, following consultation, from NHS England to ICBs. It will, however, be necessary for some staff to remain employed by NHS England to support the ongoing commissioning of retained specialised services, although options such as co-location with ICB employed staff within the hub are being explored.

Financial and contracting architecture

19. A number of key products have been developed to support the move to full delegation. These set out the arrangements for financial processes and controls in the transition to, and after, delegation. They include the approach to safe delegation, and arrangements for contracting, cashflow and commissioning-led change management in order to ensure a safe and sustainable impact on providers. These will ensure that any changes to the current baselines for providers are planned and approved and the lead in time, impact on staffing and resources, on avoidance of stranded costs, and on the identification and mitigation of risks, are carefully thought through and agreed upfront.

20. These guidance documents have been refreshed to take into account learning from 2023/24, such as that from the South London Pathfinder. The learning is also being incorporated into 2024/25 financial planning. We are initiating contractual planning at a regional level in order to hand over to those ICBs going live with delegation when a decision is confirmed. Our expectation of the contractual handover is that the closing recurrent baselines from 2023/24 are transferring to the opening recurrent baselines for 2024/25 as a default position, to support a smooth transition.

21. Work will continue with regional teams to ensure that detailed bottom-up standard operating procedures are in place for each region going live with delegation. The regional teams supporting both the transition and operationalisation after April will be NHS England hosted staff operating in commissioning hubs, so there is a continuity of both knowledge and expertise across years.

22. From 2023/24 we have shifted from historic funding of providers to historic funding of populations, as a step towards integration. This shift not only facilitated the delegation and integration of specialised services with ICB-commissioned services, it also enables allocations to be assessed for fairness relative to population needs.

23. We have therefore developed estimates of relative need for specialised services using a similar methodology to the established approach to estimating need for core ICB services, and likewise overseen by the Advisory Committee on Resource Allocation (ACRA). ACRA undertook a public engagement on the methodology in 2022, and has recommended its adoption.

24. The methodology estimates the needs-based fair shares of revenue required for all prescribed specialised services that may ultimately be delegated for commissioning by ICBs. Highly specialised services are not included.

25. Actual allocations are determined taking account of:

a) estimated target allocations in line with fair-shares, for all specialised services on which need was estimated,

b) convergence policy, determining how quickly the overall specialised resource for an ICS population is moved toward a fair share.

c) delegation policy, determining how much of each ICS-population’s specialised delegable services is to be formally delegated in each financial year. For example, the needs based fair share of revenue for ICBs has been calculated on the basis of all services in scope for delegation, whereas in practice ICBs, where they have passed the readiness assessment, will receive an actual allocation for 2024/25 only for those services deemed both immediately suitable and ready for delegation.

26. An overview of the allocations methodology is at Annex 2 and the associated Equalities and Health Inequalities Impact Assessment is at Annex 3.

Data and business intelligence

27. Business critical products are being developed for release to stakeholders to support the practical delivery of delegation, including the Commissioning Assignment Methodology and supporting reference material. Delegation will be supported by appropriate Information Governance controls – for example, Data Privacy Impact Assessment enabling Data Services for Commissioning Regional Offices (DSCROs) to receive and process data on behalf of the delegated commissioning functions. Guidance will be published to articulate what steps healthcare providers will need to undertake to support the identification and reporting of delegated specialised services from April 2024.

28. In readiness for delegation, clinical services specifications have been updated to require healthcare providers to contribute to the production of clinical outcome metrics. These metrics are being routinely published to the NHS Model System.

Oversight and assurance

29. New assurance guidance covering delegated specialised services and associated delegated commissioning responsibilities has now been co-developed between relevant teams across NHS England with a number of ICBs. Where commissioning responsibilities are fully delegated to ICBs, the assurance guidance sets out: 

• a new requirement for annual self-declaration by ICB leaders against 10 core commissioning requirements, which will be incorporated into the existing ICB annual report process;
• that specialised services must continue to be commissioned using national standards, and the 10 core commissioning requirements include ensuring provider adherence to national standards (or that appropriate improvement plans are in place); and
• clear roles, responsibilities and agreed ways of working between NHS England and ICBs, now fully aligned with the NHS Oversight Framework and new NHS ‘system by default’ operating model.

30. The guidance also includes an addendum which defines assurance arrangements for the continuation of statutory joint commissioning arrangements for relevant areas in 2024/25.

31. A Framework for Quality and Assurance post-delegation is also being developed. The Framework will encompass National Quality Board recommendations and guidance for quality oversight and assurance in Integrated Care Systems as well as nationally retained services.