Written evidence submitted by the Department of Health – QPD0025

Letter to Chair of the Public Administration Select Committee (PASC) from Una O’Brien, Permanent Secretary, Department of Health

Dear Mr Jenkin,

PASC HEARING ON THE ACCOUNTABILITY OF PUBLIC BODIES

Thank you for inviting me to attend the Public Administration Select Committee’s hearing on the accountability of public bodies on 24th June. I said I would write to you with further information on the accountability of NHS England to the Department of Health.

Please find set out in the enclosed document the accountability arrangements that the Department has put in place with NHS England and with its other arm’s length bodies. Also described are the means of assurance that are built in to the system.  Accountability and assurance are two related but distinct concepts: accountability describes the formal relationship between the Department and NHS England, whilst assurance is the means by which the Department seeks, and NHS England demonstrates, that it is performing its statutory duties and delivering its objectives. 

In practice it is a complex working relationship. Regular dialogue and engagement, to ensure effective partnership working, is a vital element of the relationship between the Department and all of its arm’s length bodies. The system is complex, involving a number of bodies performing different but closely intertwined roles, but it does operate as one system with clear delegated responsibilities from the Department. It is vital that we work with one another in partnership to ensure the health and care system as a whole is working effectively and in the best interests of patients.

I hope you will find this useful for the Committee’s Inquiry. I also said I would send you a copy of my Accounting Officer System Statement, which sets out my formal role as Principal Accounting Officer for the Department. The statement also describes how each arm’s length body has its own Accounting Officer, who is directly accountable to parliament for their organisation. A revised version of the statement is currently going through the clearance process and I will send you a copy of the final document as soon as I am able to do so. 

If I can provide anything further that would be helpful for the Committee’s work, please do not hesitate to contact me. 

Yours sincerely,

UNA O’BRIEN

PERMANENT SECRETARY

The Department of Health and NHS England

The role of the Department

1. As a result of the reforms brought about by the Health and Social Care Act 2012, responsibility for the day-to-day operation of the health service has been devolved closer to the front line. The Department acts as the ‘system steward’ providing direction and leadership for the whole of the health and social care system. Ministers remain accountable for the performance of the health system as a whole and must be able to account to Parliament.

2. As steward of the health and care system the Department focuses several key elements:

• the generation of intelligence and formulation of strategic policy so the effectiveness of the health and care system and current and future needs of patients and service users are understood and can be responded to;
• securing and allocating money and resources so that the right services can be made available and priorities met;
• ensuring tools for implementation and building coalitions and partnerships so that the system works together effectively, remaining focussed on patients and services users;
• ensuring alignment between objectives, structure and culture and ensuring accountability so that there is assurance that the needs of patients and services users are being met effectively and that both the architecture of the system, and the culture displayed by people within it, work to this end.

3. There are examples of strong collaboration and joint working between the Department and its arm’s length bodies in the key areas of communications, finance, strategy, responding to the Francis Inquiry, and winter planning. The Permanent Secretary chairs the Health and Care System Leaders’ Forum, which was established in 2013 and meets monthly. It brings together, with leaders in the Department, the chief executives of the eight arm’s length bodies that provide national leadership to the system:

• NHS England
• Monitor
• NHS Trust Development Authority
• Care Quality Commission
• Health Education England
• NICE
• Public Health England
• Health and Social Care Information Centre

4. As well as providing a mechanism for near-term problem resolution, the forum allows for development of shared context and direction. It also oversees and assures progress in other joint, cross-cutting groups on workforce, informatics, quality and finance. 

Accountability across the system

5. There are certain arrangements that the Department has put in place and are applicable to all of its arm’s length bodies:

Framework agreements

6. To ensure that roles and responsibilities are properly understood across the health system, the Department has worked with each of its arm’s length bodies to agree a bespoke bilateral framework agreement. Each framework agreement describes the relationship between the Department and arm’s length body, setting out the roles and responsibilities for the Department and arm’s length body and how the accountability relationship works in practice.

7. The framework agreement with NHS England was signed on 11 February 2014 and a copy is available online at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/280889/20140206_DH_and_NHS_England_Framework_Agreement.pdf

A senior dedicated sponsor and back-up team within the Department

8. The Permanent Secretary appoints a Senior Departmental Sponsor for each arm’s length body, a senior official within the Department, to provide a designated and consistent point of contact. The Senior Departmental Sponsor acts as the link at executive level between the arm’s length body and other senior officials in the Department, and also with ministers. The following table sets out which Department of Health Director General is senior sponsor for which of the Department’s arm’s length bodies:

9. The Senior Departmental Sponsor is supported by a dedicated sponsor team for each arm’s length body. This is a team of officials within the Department whose role is to provide a day to day point of contact between the Department and the arm’s length body, organise formal accountability meetings (see paragraph 11 below), ensure the arm’s length body is performing its duties and functions, and resolve issues at a working level where possible. Whilst the sponsor team’s role is supportive, the team must also challenge and scrutinise where appropriate.

10. The Department has developed a set of sponsorship standards (attached at Annex A). These are standards that describe what effective sponsorship looks like, to support the Department in its system steward role and hold the arm’s length body to account for delivery. Each sponsor team has been audited against the standards and the Department will continue to assess sponsors against them.

Formal accountability meetings

11. For each arm’s length body, formal accountability meetings take place at least quarterly with the Senior Departmental Sponsor and the arm’s length body. In the case of NHS England, due to the wide scope of its operations, these take place monthly between the Senior Departmental Sponsor and NHS England’s National Director of Commissioning Strategy. Discussion usually covers operational and governance issues, as well as NHS England’s current risks and issues. 

12. Where it is proportionate for the arm’s length body’s budget and scope of activity, a parallel set of accountability meetings take place between the responsible minister and the arm’s length body’s Chair. For NHS England, the ministerial meetings are held with the Secretary of State and happen every two months. This includes regular discussion of progress on NHS England’s objectives as well as high-level strategic issues, such as finance.

13. These formal meetings with the Secretary of State form the peak of the accountability relationship with NHS England and provide the opportunity for issues to be escalated as necessary (see diagram below).

14. However, this process is underpinned by a range of programme boards and working-level meetings, to provide assurance at a number of levels. For example, there is a weekly delivery meeting where senior officials meet together with the Secretary of State and the chief executives of NHS England, Monitor and the NHS Trust Development Authority. The accountability relationship between NHS England and the Department, therefore, should not be seen overall as a simplistic linear reporting relationship. In practice, information is captured and brought together from a range of sources to provide assurance that NHS England is fulfilling its statutory duties and delivering its objectives.

15. Below is a summary of the Secretary of State accountability meetings with NHS England that have taken place over the last year:

16. Copies of the minutes of these meetings are available online at: https://www.gov.uk/government/publications/nhs-commissioning-board-accountability-meeting-minutes.

The accountability cycle

17. The ‘accountability cycle’ describes the annual process through which objectives are set to NHS England, then translated into NHS England’s business plan, and assessed annually. The formal accountability meetings set out above support this accountability cycle by providing a forum for discussion and challenge at each stage.

18. The below diagram shows the accountability cycle and its three key means of assurance, which the Department uses to satisfy itself that NHS England is delivering its objectives and functioning as an organisation: the mandate; NHS England’s business plan; and its annual report.

Mandate to NHS England

19. At the start of the process, and integral throughout, is the NHS England mandate. This is the document through which the Department sets high-level objectives to NHS England. The Health and Social Care Act 2012 states that the Secretary of State will publish and lay before Parliament the mandate at the start of each financial year. Although the Department must consult with NHS England on the new mandate each year, it is for the Secretary of State to set the mandate, and does not require NHS England’s agreement.

20. The mandate is therefore distinct from the framework agreement, which outlines the way in which NHS England and the Department work together on an ongoing basis. The Health and Social Care Act also states that NHS England must seek to achieve the mandate’s objectives. The objectives are outcomes based and are for NHS England to achieve within a given time period. However, they are strategic and outcome focused, to allow NHS England the operational autonomy to deliver its objectives as it sees fit. The mandate also sets out the financial allocation from the Department each year.

21. The first of the current mandate’s 25 objectives is for NHS England to demonstrate improvement against all parts of the NHS Outcomes Framework. The outcomes framework is a set of 64 indicators, which measure performance in the health and care system at a national level. Taken a whole, it is designed to provide a national overview of how well the NHS is performing.

22. The outcomes framework indicators are structured around five ‘domains’: preventing people dying prematurely; enhancing quality of life for people with long-term conditions; helping people to recover from episodes of ill health or following injury; ensuring that people have a positive experience of care; treating and caring for people in a safe environment and protecting them from avoidable harm. The mandate is similarly structured around these five domains. This means that in addition to the specific mandate objective on the outcomes framework, progress against every objective in the mandate is assessed using the outcomes framework. 

23. The outcomes framework was published alongside the mandate for 2014 and is available online:

https://www.gov.uk/government/publications/nhs-outcomes-framework-2014-to-2015

24. Outcomes framework indicator data are published on the Health and Social Care Information Centre website:

http://www.hscic.gov.uk/nhsof

NHS England business plan

25. NHS England uses the mandate to produce its own business plan, setting out how it will achieve each of the objectives during the year. It also produces planning guidance for commissioners, setting out how NHS England expects clinical commissioning groups, which commission the majority of local services, to fulfil their role. The most recent business plan was published on 31st March 2014. Both documents are available on NHS England’s website: see http://www.england.nhs.uk/2014/03/31/ppf-business-plan/ for the business plan and http://www.england.nhs.uk/wp-content/uploads/2013/12/5yr-strat-plann-guid-wa.pdf for the planning guidance.

NHS England annual report

26. At the end of each financial year, NHS England must publish an annual report. This must include a statement of its accounts and an assessment of how it has fulfilled its statutory duties.

Annual assessment

27. In response to the annual report, the Secretary of State must publish an assessment of NHS England. There is a legal requirement that this is laid before Parliament each year. The assessment covers NHS England’s performance in respect of mandate objectives and fulfilment of its statutory duties.

28. Both the annual report and annual assessment for 2013-14 were published on 22nd July and are available online:

https://www.gov.uk/government/publications/nhs-england-assessment-of-performance

Commissioning assurance

29. Just as the Department’s relationship with NHS England is one of support and assurance, so is the relationship between NHS England and the clinical commissioning groups, which commission the majority of local services and collectively receive approximately two thirds of NHS England’s total budget. The Chief Executive of NHS England, as well as Accounting Officer for NHS England, is the Accounting Officer for all NHS funds routed through to clinical commissioning groups.

30. NHS England has developed an assurance framework for clinical commissioning groups. This sets out how, over the course of each year, NHS England will be assured that its clinical commissioning groups are commissioning high quality and cost-effective services for their populations. The framework sets out a series of quarterly assurance discussions between each clinical commissioning group and NHS England, culminating with an annually published assessment of performance. This allows NHS England’s board, and the Department, to be assured that the organisation is able to demonstrate the effective use of public funds in its commissioning activity.

31. A complementary assurance framework has been developed for the smaller number of services that NHS England commissions directly. These include primary care, and services for areas of care that are low incidence but high cost where it is therefore sensible for commissioning to happen at a national level (known as specialised commissioning). 

Framework Agreement between the Department of Health and NHS England (unsigned version):

www.gov.uk/government/uploads/system/uploads/attachment_data/file/280889/20140206_DH_and_NHS_England_Framework_Agreement.pdf

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