By Sharon Brennan7 July 2021

  • New bill sets out how ICSs will be formed and what new statutory duties they must abide by
  • New constitution for each ICS will give significant local freedoms on how they will work but ICSs must abide by mandated new duties
  • Spending rules to change too, with FTs prevented from spending their capital if it will breach ICS limits

The new health bill will allow integrated care systems to set their own constitution, determine staff pay and raise ‘additional income’ but the health secretary will have the power to approve ICS chairs.

The legislation, published on Tuesday, confirms ICSs will have both “statutory integrated care boards [previously referred to as an NHS ICS board] and statutory integrated care partnerships [previously referred to as a health and care partnership board]”.

It said the ICB will take on the “commissioning function” of clinical commissioning groups as well “as some of NHS England’s commissioning functions”.

The explanatory notes accompanying the legislation state each ICB “will have the ability to exercise its functions through place-based committees (while remaining accountable for them) and it will also be directly accountable for NHS spend and performance within the system”.

It may do this through the creation of committees or subcommittees to allow the “exercising [of] budgets and functions” at place-level, generally seen as the size of a local authority. A mandated ICS constitution must detail how these committees will be held accountable.

The notes add: “The ICP will be tasked with developing a strategy to address the health, social care and public health needs of its system. The ICB and local authorities will have to have regard to that plan when making decisions.” It does not specify who should sit on the ICP board, however, or what “have regard to” means in practice.

The legislation sets out a new “triple aim” duty for ICSs to ensure each one has “regard to all likely effects” of their decisions on health and wellbeing of England’s population, patients’ quality of care and the sustainable use of NHS resources, including how their decisions may impact on other care costs within the system. This has been introduced partly to ensure trusts, which will remain operationally independent, have a duty to consider the quality outcomes and financial envelope of the whole ICS.

It also places a duty on ICB to “have regard” to any guidance NHSE publishes on ICSs.

The legislation also states that:

  • ICSs must publish their own constitution, with NHSE to issue a “model constitution” to help areas develop their own. The constitution must set out how much board members will be paid, length of tenure, and eligibility for reappointment. The ICS board can also determine their own employment terms and conditions for its staff, including pay, pensions and allowances;
  • Each board will have a duty to ensure “continuous improvement in the quality of services” it provides, as well as a duty to enable patient choice “by commissioning to allow patients a choice of treatments, or a choice of providers, for a particular treatment”. It will also have formal a duty to promote innovation within its ICS;
  • ICSs will be allowed to “raise additional income for improving the health service, provided that this does not significantly interfere with the integrated care board’s ability to perform its function”;
  • ICSs must compile a “register of interests” of all its board and committee members, plus its employees, and lay out in its constitution how it intends to manage conflict of interests;
  • ICB boards must include a member “jointly nominated” by trusts in the area, as well as a member each, also jointly nominated, from primary care and local authorities in the ICS. It does not stipulate a CFO, medical or nurse director on the board as NHSE guidance has recently asked for;
  • Each ICS chair will be “appointed by NHS England, with the approval of the secretary of state”. Only NHSE will be able to remove the chair from office but this is also subject to sign off by the health secretary.
  • ICSs must take on NHSE commissioning roles such as in primary care or dentistry, even where the ICS has “not reached agreement” with NHSE to do so. The accompanying legislative notes said: “The intention is that [ICBs] will hold most of these functions at an agreed point in the future” with NHSE having a “limited” oversight role; 
  • NHS bodies must also abide by a new duty to co-operate with local authorities, with DHSC to issue guidance to “clarity” on what this duty means in practice. 

New spending rules

The bill also provides a new power to allow NHSE to set capital spending limits for foundation trusts. The foundation trust limit would be set on an individual basis for each affected trust and will most likely last for a financial year.

The legislative notes said: “The power is intended to only be used on a foundation trust where there is a clear risk of an ICS breaching its system capital envelope as a result of non-cooperation by a foundation trust, and other ways of resolution have been unsuccessful.”

The bill also replaces the national tariff with the NHS payment scheme, which places a duty on NHSE to publish pricing rules for commissioned services.

The secretary of state will also be obliged to make an annual payment to NHSE for the Better Care Fund, used to pool funding between local authorities and the NHS, and can mandate NHSE, who can then in turn mandate ICSs, to use a specific amount on “service integration”.