The NHS reform & shake-up

Bbc News, 14 June 2011 Last updated at 13:57 GMT

The government wants to overhaul 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 after criticisms from MPs and health unions.

The government has now agreed to make changes after an independent review called for parts of the plans to be re-written.

Why does the government want to make changes?

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.

To cope, the NHS has been asked to make savings of up to £20bn by 2015.

To put that in context, it would require the NHS to become 4% more productive each year. And that is for a service that has become gradually less productive over the past decade.

If it does not meet the challenge services will undoubtedly suffer. There could be more rationing longer and waiting lists and so ministers believe overhauling the way the system works could help the NHS meet this challenge.

Who is responsible for the budget now and how is that changing?

Local health managers working for primary care trusts 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.

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 off-set by savings.

The reduction in staff alone will save £5bn by 2015, according to the government's own costings.

What changes will patients see?

Visually, very few. Patients will still walk through the doors of their local GP surgery and talk to the same staff they always do.

However, if the government achieves its aim they may find themselves with more control over their care.

The government has said patients will be handed more choice over how and where they are treated.

They can already choose which hospital they want to go to for non-emergency operations, such as knee and hip operations.

In the future, this choice could be extended to GPs. Practice boundaries may be scrapped, enabling a patient to register with any family doctor they wish to.

Patients have been promised more and clearer information. Central to this will be HealthWatch, a patient body which will collate information on performance and feedback from patients themselves.

What happens next?

The pause that was put in place while the listening exercise was carried has now been lifted. In many ways, it is all systems go.

The government will spend the next few weeks making amendments to the bill so its passage through parliament can be started again before the summer recess.

If everything now goes to plan, the new clinical commissioning groups will take responsibility for the budget in April 2013.

However, those areas that are not ready to take charge will not have to. Instead, the national board will be in charge of the purse strings until they can get their arrangements fit for purpose.