Health Bill (Tenth sitting)
These clauses will make a series of vital changes to the NHS financial framework following the abolition of NHS England, strengthening funding arrangements and financial accountability. First, clause 43 will enable funding to flow to integrated care boards following the abolition of NHS England while simplifying the powers to direct how resources are used. The first change in new section 223G will transfer the responsibility to fund integrated care boards from NHS England to the Secretary of State, maintaining continuity of allocations and allowing in-year adjustments where needed. We will also simplify the existing power in new section 223GA to direct integrated care boards in how resources are used, making it clearer and easier to use. That will ensure that safeguards can be applied consistently, such as the ability to recover funding where there is a failure to comply with a direction. Transparency will be maintained through the requirement to publish directions. The clause will also introduce new section 223GB, setting how the direction powers in new section 223GA can be used in relation to expenditure on service integration across health and social care. At present, service integration funding must be placed in a pooled budget with local authorities, even if that is not the most effective approach. The current legislation allows for only one model, even where that may introduce unnecessary bureaucracy or delay. The clause will remove that mandatory requirement, giving the Secretary of State discretion each year on whether integration funding should be pooled. That will not remove pooled budgets; they will remain the default where they deliver better outcomes, and local areas will still be able to enter section 75 agreements voluntarily. This clause will introduce proportionate flexibility and enable the Secretary of State to decide, transparently and through published directions, whether funding should be pooled in particular circumstances. That will ensure that we can act quickly when needed, for example in responding to urgent pressures, so that the Secretary of State is not constrained by a blanket legal requirement that does not always add value. Clause 43 will also make necessary consequential changes following the transfer of functions from NHS England to the Secretary of State. That will include replacing “NHS England” with “The Secretary of State” in section 223GC, which concerns the power to give directions about integrated care board expenditure limits, and repealing section 223K on quality payments, as the Secretary of State can use other powers to deliver payments for quality improvement purposes. Having set out a clearer and more streamlined framework for allocating and directing NHS resources, we now turn to how integrated care boards and providers will be held accountable for managing those resources. Clause 44 will omit sections 223M and 223N from the National Health Service Act 2006, which require each integrated care board and its partner NHS trust and foundation trust to balance their finances collectively. By removing sections 223M and 223N, we will ensure that one organisation’s deficit can no longer be obscured by another’s surplus, while preserving the Secretary of State’s ability to set joint financial objectives for integrated care boards and their partner trusts where system-wide alignment is needed. If we are to achieve the ambitious aim set out in the 10-year health plan, of getting most providers to achieve a surplus by 2029-30, we must place the onus back on individual organisations. Each NHS organisation should be unambiguously accountable for managing its own finances, rather than relying on collective system balances to absorb overspends. Importantly, that does not mean abandoning collaboration. Clause 44 amends section 223L of the National Health Service Act 2006 to enable the Secretary of State to set joint financial objectives for integrated care boards and their partner NHS trusts and foundation trusts, where local system-wide alignment is genuinely required. This approach supports the wider policy direction for ICBs to operate as strategic commissioners. With clearer organisation and financial accountability, ICBs can focus on population health outcomes, prioritising prevention, reducing health inequalities, shaping services around need, and driving better value for money through more effective commissioning. These clauses make a clearer, more disciplined framework, where individual accountability is strengthened, ambiguity is reduced and national oversight is more coherent, while retaining targeted tools to support collaboration where it adds value. I therefore commend clauses 43 and 44 to the Committee.