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All together now: commissioning consortia and the £80bn question

4 October 2010

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Head of Healthcare and Partner
Eversheds LLP

Bill is Head of Healthcare and a partner at Eversheds LLP.  Specialising in dispute management, Bill has considerable experience of advising both public and private healthcare bodies

While real-term spending on the NHS has been “ringfenced” by Chancellor George Osborne, the previous objective set by the Labour government for the NHS to achieve efficiency savings of £20bn by 2014 continues. So, while Mr Osborne’s emergency budget announced in June guaranteed frontline services for the duration of Parliament, plans are afoot that will radically alter the commissioning and provision of primary care. Many contracts, programmes and services have already come under scrutiny, with some major projects already being shelved or scrapped.

The white paper Equity and Excellence: Liberating the NHS, was published in July, clarifying to some degree the proposals as to the future of primary care in the UK.(1) A key element of the drive for increased patient care and efficiency is the radical plan proposed to abolish the 10 strategic health authorities (SHAs) and 152 primary care trusts (PCTs) and transfer the majority of PCT commissioning powers and budget directly to GPs themselves, with a new NHS Commissioning Board to commission GP, dental and community pharmacy services, together with specialist services required at a local/national level.

The principle behind much of this change is that clinicians, not managers, should commission services, since GPs have a better understanding of their patients’ needs. The government also wants to see a greater focus on patient outcomes and engagement with, and by, patients in relation to their care – as the white paper puts it, “No decision about me, without me”.

Structure and role of commissioning consortia
Though vague on the detail, the white paper does set out some of the main themes of GP commissioning:

GP practices will be grouped into consortia. Practices will have flexibility within the new legislative framework to form consortia in ways they think will secure the 
best healthcare and health outcomes for their patients and locality.
It will be compulsory for GP practices to join consortia. The NHS Commissioning Board is likely to be given the power to assign practices to consortia if necessary. The NHS Commissioning Board will calculate practice-level budgets and allocate these directly to consortia.
Consortia should work with other health and social care professionals, and in partnership with local communities and local authorities, to commission the majority of NHS services for their patients. GP consortia will have a duty to promote equalities and to work in partnership with local authorities – for instance, in relation to health and adult social care, early years services, public health, safeguarding, and the wellbeing of local populations.
The consortia will hold contracts with providers and may choose to adopt a lead commissioner model, for example in relation to large teaching hospitals.
Each of the consortia must have an “accountable officer”. The NHS Commissioning Board will be responsible for holding consortia to account for stewardship of NHS resources and for the outcomes they achieve. In turn, each consortium will hold its constituent practices to account against these objectives.
GP consortia will have the freedom to decide what commissioning activities they undertake for themselves and for what activities (eg, demographic analysis, contract negotiation, performance monitoring and financial management) they may choose to buy in support from external organisations, including private or voluntary (third) sector bodies or local authorities.
GP consortia will receive a maximum management allowance to reflect the costs associated with commissioning, with a premium for achieving high-quality outcomes and for financial performance.

A nervous revolution?
So what does this mean for general practices over the next few years? Health Secretary Andrew Lansley has said he wants a “full system roll-out” of GP commissioning, with no opt out. The exact numbers of GP practices per consortia are unclear.
However, each GP consortium will need to be of sufficient size to manage financial risk and allow for accurate allocations.

Some commentators have suggested that, with 36,000 GPs in the UK, 500-600 consortia will be formed, although Mr Lansley has refused to be drawn on likely numbers. Whatever the number of consortia, if the proposals in the white paper are implemented GPs will be commissioning £60-80bn of services by April 2013.

While most GPs appear to welcome the opportunity to be more directly engaged in commissioning services, many have been concerned that the push for NHS efficiency and the need to commission such a volume and value of services effectively will put a strain on their resources and distract them from their clinical role.(2)

The creation of consortia and their ability to retain support to negotiate, manage and monitor contracts with providers should allay some of those fears. These consortia will have much more buying power and therefore be able to commission much more effectively than any individual GP practice. Commissioning support provided to GP consortia will be key, particularly since some will have budgets exceeding £100m. Some GP consortia already exist, however, with up to one million registered patients.

Regulation and third-sector role
In the white paper, the government says it will discuss with GPs and the British Medical Association (BMA) how primary care contracts can best reflect new complementary responsibilities for individual GP practices, including being a consortium member and supporting the consortium in the efficient and effective use of NHS resources.

The government has also pledged not to be too prescriptive in how GP consortia will operate. While GPs’ objectives will be clear, the way in which they achieve those objectives will be left to their discretion to a fair degree.

Consortia will be given sufficient freedoms to use resources in ways that achieve the best and most cost-efficient outcomes for patients. Monitor, the independent regulator, and the NHS Commissioning Board are to ensure that commissioning decisions are fair and transparent, and will promote competition.

Under the previous administration, some PCTs struggled to attain the highest levels in the world-class commissioning competency framework. The previous GP fundholding initiative of the 1990s also had mixed success. Working alone, it appears likely that most GP practices or consortia, with little or no commissioning experience and commercial leverage, would struggle to be any more successful.

This is an area the white paper is quite clear on. The plans envisage the involvement of private and third-sector firms and/or local authorities from an early stage in the process in supporting the commissioning process. Given the nature of commissioning and the level of responsibility being given to GPs, it is likely that the vast majority will require assistance with buying services and liaising with their hospital colleagues, if they are to balance this with their existing “day jobs”.

Many GPs will wish to maintain focus on their clinical role and defer much of the management of the practice and the commissioning role to others. There will therefore be considerable opportunities for the private and third sectors, in particular, to provide support in commissioning hospital and community health services on behalf of GPs.

Expect to see many GP consortia outsourcing full responsibility for commissioning to private-sector firms. This is by no means a new phenomenon, but a continuation of a trend started through schemes such as the Framework for Procuring External Support for Commissioning.(3)

It is clear that private-sector providers will be seeking to engage with GPs in both creating consortia and also supporting those consortia in the commissioning process. Given the relationship that some GPs had with PCTs, it would seem likely that a considerable number of GP consortia will align themselves with the private sector in seeking support for commissioning.

What now for skilled PCT/SHA staff?
The composition of the NHS Commissioning Board is less clear. In his recent letter to the chief executives of the SHAs and PCTs, Sir David Nicholson emphasised the need to press on with the £20bn cost-saving plans: Quality, Innovation, Productivity and Prevention (QIPP) and Transforming Community Services.

Sir David has called upon the SHA and PCT leads not to be commentators in the box, but players on the field. However, this will be a considerable challenge if many of those players have little idea when they or their fellow players may be substituted.

It is to be hoped that the very able leads and commissioning managers that undoubtedly exist within a number of the SHAs and PCTs will find roles with the NHS Commissioning Board, albeit in reduced numbers. Some may set up third-sector operations to provide commissioning support to the GP consortia.

While it is not yet clear whether the Commissioning Board will operate only centrally or more locally, the latter would seem more likely, given the number of GP consortia per region (estimated to be at least 50 in many regions) and the focus on local delivery.

Response so far
There has been a mixed reaction to the white paper. Some GPs see it as an opportunity; others see it as a burden and a step towards privatisation of the NHS. Either way, the white paper proposes that GP practices must join consortia by 2012.

GP practices and the private/third-sector firms that will become involved in the commission of primary care require guidance in setting up the structures, joint arrangements, risk-sharing strategies, commissioning process, procurement, complying with the new framework and managing the process that will involve large budgets. Getting these arrangements right at the outset is key to ensuring the success of the consortia and their commissioning support.

It is clear that GP commissioning is set to change the landscape of primary care provision in the UK very significantly. GPs need to be ready to form consortia with other like-minded practices and consider a risk-sharing venture with private, third-sector and/or local authorities to enable them to achieve successful commissioning that delivers high-quality patient care for good value.

Unless the proposals change radically in the meantime, GPs will need to be in consortia, with the commissioning procedure set up and with full responsibility for a budget of up to £80bn, by April 2013. There is much to be done between now and then to achieve that.

1. Department of Health. Equity and excellence: liberating the NHS. London: DH; 2010. Available from:…
2. See
3. Department of Health. Framework for procuring External Support for Commissioners (FESC). London: Department of Health; 2007. Available from:…