Q&A: The NHS shake-up
- 1 March 2013
- From the section Health
The government is overhauling the way the NHS in England works.
Under the plans, GPs and other clinicians will be given much more responsibility for spending the budget in England, while greater competition with the private sector will be encouraged.
It has been dubbed one of the most radical plans in the history of the health service - and has certainly proved controversial.
Ministers even had to take the unprecedented step of putting the plans on hold last spring after criticisms from MPs and health unions.
After carrying out a "listening exercise" they agreed to make changes, but this has still not been enough to appease critics.
A host of health groups have recently said they totally oppose the plans - and these include some royal colleges which set professional standards as well as the major unions representing doctors, nurses and midwives.
The bill gained Royal Assent in March 2012, more than 14 months after first being tabled in the House of Commons.
Why does the government want to make changes in the first place?
Ministers believe they are essential to allow the health service to become more efficient and meet the challenges it is facing.
Despite the NHS budget being protected, it is not immune from the need to make savings.
In fact, financially many believe the next few years will be the most challenging in its history.
Costs in the NHS are rising at a much higher rate than inflation.
This is because of factors like the ageing population, costs of new drugs and treatments and lifestyle factors, such as obesity.
Without change, the government argues, services would increasingly have to be rationed in the future.
Who is responsible for the budget now and how is that changing?
Local health managers working for primary care trusts (PCTs) currently control much of the spending. They use the funds to plan and buy services for patients including community clinics, mental health units and hospital care.
The changes will transfer much of that responsibility to clinical commissioning groups.
Although it is likely responsibility for services such as dentistry and specialist care like neurosurgery will end up with the national board that is being set up to oversee the new system.
Originally, the commissioning groups were to be led by GPs, but other professionals including hospital doctors and nurses will now be involved too.
As the changes happen, both PCTs and regional bodies known as strategic health authorities are to be phased out.
What about competition?
The reforms are partly designed to encourage greater involvement from the private sector and charities.
In many ways, this is nothing new for the NHS.
Under Labour, they were encouraged to get involved, especially in elective operations such as hip and knee replacements.
However to date, just 3.5% of these operations are done by the private sector.
In other areas of health care, especially mental health, the role of other providers is much more pronounced.
In total, £1 of every £20 spent in the NHS goes to a non-NHS provider.
The reforms will probably expand this - something that has proved extremely controversial and opened up the government to claims it is going to privatise the health service.
Ministers have responded by agreeing to introduce competition in a more managed and balanced way.
However, there is fresh concern that legislation about to go through the House of Lords will force nearly every service to be put out to tender. Critics have said this is a blueprint for privatisation and goes against government assurances.
The government also points out that it is not all about the private sector. Social enterprises are also being encouraged to get more involved.
Although critics say that social enterprises often find it difficult to compete against the much wealthier private health organisations.
How much will the changes cost?
The cost of the programme is £1.4bn.
Most of that will come in the next two years as more than 20,000 management and administration staff are made redundant from health authorities, PCTs and the Department of Health.
It could cost as much as £1bn to make redundancies. Another £400m will be spent on things such as IT and property in setting up the new consortia.
But the government claims the cost will be more than offset by savings.
The reduction in staff alone will save £5bn by 2015, according to the government's own costings.