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CCG governance: getting it right

16 January 2012

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Giles Peel

Head of Health Advisory Team, DAC Beachcroft

Giles is a chartered secretary with a broad background in a number of fields, from FTSE financial services to the public sector. His particular interest is in governance and he has worked with numerous clients in the health and commercial sectors. Giles has managed change, led operational teams, negotiated commercial contracts and planned and delivered acquisitions and mergers. He recently had a fixed-term appointment as Corporate Development Director of an acute NHS trust, created out of a merger. He is an experienced chair and non-executive director

Governance is the system by which organisations are directed and controlled, and allows a board or governing body to provide the controls, checks and balances that allow staff to do their job in a safe, legal and effective way.

When it works well, it becomes instinctive and is the catalyst for doing the right thing, even in situations that are unfamiliar. In the complex world of health, a large amount of effort goes into the process of assurance for the board or governing body. This provides confirmation in a variety of ways that operational management is doing what it should and in the way it said it would.

When governance is good, information flows properly, staff understand their responsibilities and direction is clearly understood. Strategic objectives are clear and the decisions of the organisation are properly recorded. Delegation works because staff know the limits of their authority and react accordingly.

Accountability and responsibility are matched properly in well-governed organisations. Good boards debate dispassionately and, with the right management information at their fingertips, surprises around the board table are rare. Corporate structures operate effectively as they do not overlap but promote effective communication, both internal and external.

Of course, crises test even well-governed organisations but are less likely to overwhelm them. Good governance is important because it allows organisations to set themselves up in the right way at the outset, thereby saving expense and effort in correcting structural or behavioural problems later on.

Nolan principles
It is worth thinking about the manner in which individuals need to think and react in public organisations. Nolan’s seven principles have for some time been the accepted benchmark for behaviour in public life and are set out below:

  • Selflessness – holders of public office should act solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.
  • Integrity – holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might seek to influence them in the performance of their official duties.
  • Objectivity – in carrying out public business, including making public appointments, awarding contracts or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
  • Accountability – holders of public office are accountable to the public for their decisions and actions and must submit themselves to whatever scrutiny is appropriate to their office.
  • Openness – holders of public office should be as open as possible about all the decisions and actions they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
  • Honesty – holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.
  • Leadership – holders of public office should promote and support these principles by leadership and example.

These, of course, apply to anyone serving in a public capacity and should already be understood in the context of current practice life. Upholding them is often a question of testing attitudes and responses against these principles in each debate and the resultant decision.

In practice, the issues of accountability and openness are often cited as the most challenging for boards and governing bodies, especially when set against the backdrop of public controversy. When boards and governing bodies come under the spotlight, the first reaction can be defensive, but this can only serve to create more issues downstream.

Clinical commissioning groups (CCGs) are now heading towards authorisation, the process whereby the NHS Commissioning Board will effectively licence them to commission healthcare services in their own localities. Authorisation will concentrate on six domains of competence, which are set out below:

  • A strong clinical and professional focus, which brings real added value.
  • Meaningful engagement with patients, carers and their communities.
  • Clear and credible plans that continue to deliver the QIPP (Quality, Innovation, Productivity and Prevention) challenge within financial resources, in line with national outcome standards and local joint health and wellbeing strategies.
  • Proper constitutional and governance arrangements, with the capacity and capability to deliver all their duties and responsibilities, including financial control, as well as effectively commission all the services for which they are responsible.
  • Collaborative arrangements for commissioning with other CCGs, local authorities and the NHS Commissioning Board, as well as the appropriate external commissioning support.
  • Great leaders who individually and collectively can make a real difference.

As can be seen from this list, the fourth domain  is explicit on the need for adequate governance arrangements, which will need to cover everything from the delivery of statutory responsibilities through to the clinical governance implications for commissioning new pathways, perhaps integrated with several providers.

Shadow CCGs are now actively developing governance arrangements with the help of primary care trust (PCT) clusters. In addition, national programmes for leadership training, and more local ones for broader capability development, are being introduced.

This can mean some interesting changes to practice managers’ roles. Some will be members of shadow CCG governing bodies, and here they are already beginning to tackle the issue of commissioning from a more clinical perspective. In this context, there is the difficult question of managing conflicts, and in particular the separation of the ‘day job’ of practice management and the provision of care from the new and very challenging decisions required to deliver commissioning.

For those practice managers who are not on the CCG governing bodies, there is a need to inform clinical colleagues about the changes that are coming and highlight the new risks that must be managed in the context of existing relationships between practices and their CCGs. Supporting clinicians in this process will become a considerable task over time.

New considerations
So, what are the big challenges that practice managers should be thinking about? 

  • Information flow – this is going to be a key issue. Different organisations tend to have only their piece of the information puzzle, and there is still a lack of willingness to share data, as well as real obstacles.
  • Statutory duties – CCGs will have them and will be held accountable post-authorisation, especially at governing-body level. When these duties are enshrined in legislation they need to be understood and rehearsed widely.
  • The issue of scale – what works at practice level will not necessarily be feasible for a CCG.
  • Conflicts of interest – often mentioned but can only really be managed as they occur. All staff should take time to understand and study the law in this area. Then policies and processes will need to be implemented for identifying and dealing with conflicts of interest.
  • Communication – needs to be effective at every level to transmit good practice and to educate in the case of bad practice.

Some of these challenges are novel. The issues of learning new statutory duties and being able to spot conflicts of interest, and then deal with them, will need to be rehearsed thoroughly. In the broader areas of information flow, scale and communication, it is a question of re-honing existing skills for the new environment. Practice managers can take heart here, as many of the existing developments across the NHS, such as integration of care pathways and the introduction of ‘Any Qualified Provider’, offer helpful pointers to styles of negotiation in future.

CCGs will also need to think about a whole range of new business skills within the context of commissioning. These include conflict resolution, contracting and procurement, understanding how to transfer risk successfully and how to master complex systems for public and stakeholder engagement. Again, there are many precedents, and some of these skill sets are currently much more prevalent in secondary care. It is to be hoped that the wealth of experience that resides in foundation trusts can be used here. Where practice managers will feel more at home, however, is that they already work in one of the most entrepreneurial parts of the NHS.

So there is much to think about and preparation is underway, in spite of the final picture for the landscape of clinical commissioning not yet being finalised. As with all new organisational constructs, clinical commissioning will take time to bed down, but the challenges are already emerging, together with some of the solutions, in the form of properly thought-through governance arrangements.