The white paper The new NHS: modern, dependable was published on 8 December 1997. The government set out how it intended to abolish the internal market created by the Conservatives through the National Health Service and Community Care Act 1990 (although it planned to keep the purchaser–provider split) and that the internal market would be replaced by a system based on partnership and driven by performance management. Secretary of State for Health Frank Dobson was Old Labour and had been critical of the Conservative government’s reforms. However, the internal market persisted, with purchasing being renamed ‘commissioning’. The government proposed reducing the number of commissioning bodies from 3,600 to 500. It outlined plans to introduce health improvement programmes (HIPs), which were to be jointly agreed by planners and providers and suggested that increased cooperation would replace competition.
The focus of the white paper was strongly on service quality and clinical governance. The arrangements were intended to build on and strengthen the existing systems of professional self-regulation and corporate governance.
The white paper noted the high degree of national variation, for example citing the fact that the death rate from coronary heart disease in people younger than 65 was almost three times higher in Manchester than in West Surrey. The government also suggested that the internal market had led to secrecy due to competitive interests. The government proposed to publish comparative information on NHS trust performance.
On quality, the government intended to introduce national standards and guidelines, facilitate the development of local measures and establish the National Institute for Clinical Excellence to produce clinical guidelines and audits for dissemination throughout the NHS. The government would work with the professions and representatives of users and carers to establish evidence-based national service frameworks for major care and disease groups.
The government also intended to establish a new system of clinical governance in NHS trusts and primary care. A new Commission for Health Improvement would be established to support and oversee the systems in place at a local level to monitor, assure and improve clinical quality.
Primary care groups
The government planned to abolish GP fundholding and proposed the establishment of primary care groups (PCGs) in its place. PCGs would be responsible for a devolved budget and would be able to purchase most healthcare services. The PCGs would comprise all GPs in an area together with community nurses and would take responsibility for commissioning services for the local community. The PCGs would be accountable to health authorities (HAs), but eventually PCGs would be able to become independent primary care trusts.
It was intended that over time PCGs would extend indicative budgets to individual practices for the full range of services and it would be open to the PCG to agree practice-level incentive arrangements associated with those budgets where this helped to promote the best use of resources.
The NHS Executive regional offices would be responsible for holding health authorities to account for their new range of statutory duties and for progress in their new strategic leadership role. Regional offices would also be responsible for ensuring effective arrangements for the commissioning of specialised services (such as bone marrow transplants).
The intention was for HAs to relinquish direct commissioning functions to PCGs. HAs would be responsible for:
- developing PCGs, holding them to account and allocating resources to them
- providing leadership on the ground
- leading on formulating HIPs
- assessing local needs and identifying ways of meeting them.