Editor’s blog Monday 27 December 2010: The Independent Challenge Group’s Yule log for SoS Lansley

Independent challenge has never been wildly popular in NHS health policy, to put it mildly.

Liberating The NHS originally promised much more independent challenge - though as our analysis of the DH response to the White Paper consultation pointed out, quite a few of the proposed freedoms (especially for Monitor) are deferred or dropped, and the Secretary Of State’s role is to be much less diminished than promised.

Independent challenge dropped a Yule log in the path of SoS Lansley’s Boxing Day walk, in the shape of Guardian chief political correspondent Nick Watt’s received leak of the Independent Challenge Group’s letter to Treasury Secretary Danny Alexander, warning of the reconfiguration’s down-side risks to the NHS’s chances of achieving the £15-20 billion Nicholson Challenge QIPP by 2014-15.

The first thing to observe is that this is not a freshly-minted log: Watt clearly states that the Independent Challenge Group letter was written on 7 September. This therefore predates the serious concern about SoS Lansley’s plans, which we revealed in November.

Not topical, but interesting
It’s not very topical, therefore. It is, nonetheless, interesting for several reasons.

The first is for the question of who leaked it. Lead signatory former APAX chief investment officer Adrian Beecroft should be well-known to The Guardian’s management: private equity firm APAX were Guardian Media Group’s partners in the 2008 purchase of  Health Service Journal publishers EMAP.

Perhaps that is just a co-incidence.

The second is as an index of the Coalition Government’s far-sightedness towards potential pitfalls such as SoS Lansley’s liberation theology.

To say that the NHS White Paper received a poor reception from experts and key stakeholders would be to vye for the under-statement of 2010. That should have put NHS reform firmly onto the risk radar.

Watt contextualises the letter with comments by un-named Cabinet colleagues about a ”complacent” DH; and the letter’s authors write "We believe that the projected level of QIPP savings may not be achievable. We also have concerns about the costs of the switch from PCT to GP commissioning; and the pace at which the associated benefits will be achieved; and about the impact on NHS costs of the planned cuts to the social care budget – which DH only intends to add to its submission once the funding gap is clear … Taken together, the NHS could therefore face a significant budget shortfall by the end of the SP [spending period].

"The NHS typically deals with such shortfalls by limiting treatments, leading to increased waiting times. The government will be faced with a choice between dealing with the fallout from increased waiting times or increasing the DH budget, perhaps by as much as £10bn a year. To avoid this unpalatable trade-off, the DH settlement needs to build in much greater non-QIPP efficiency savings from the outset".

These are not slight concerns. Added to Stephen Dorrell’s gradually less-and-less coded hints about problems ahead, it is concerning that it took until November for NHS reform a la La-La to hit the risk radar of Cameron, Osborne and Alexander.

The bleeding obvious
The letter is also interesting for its statement of the bleeding obvious fact that more decentralised, less commanded-and-controlled commissioning will be more variable in quality.

The letter states, ”We fear that the results will be patchy with some commissioning consortia performing very well, but others performing poorly, again reducing the pace of overall cost benefit realisation”.

As insights go, this isn’t one. It is difficult to see what value this statement adds. It amounts simply to another verse in the psalm of Things That Are Not Surprising.

O come, all ye faithful
It is also interesting to see the Independent Challenge Group’s doctrinaire faith in wholly-untested market reform mechanisms: ”We do believe that the changes have the potential to achieve the major objective of increasing the quality and cost effectiveness of commissioning in the sense of improving the fit between the services purchased and the needs of patients. We are also convinced that more competition between the private and public sectors will be encouraged”.

You can take such faith in potential in one of two ways: as benign, empowering benevolence – or as naïve, credulous Micawberism, hoping that ”something will turn up”.