A new operating model for health and care

Introduction

The NHS is embarking on significant structural reorganisation. It is doing so while simultaneously grappling with significant operational and financial challenges and delivering the government’s ten-year health plan reforms. The system’s ability to deliver these changes depends heavily on having the right operational and governance structures.

There is currently no clear system operating model. Instead, historic structures are layered on top of one another like a coral reef

There is currently no clear system operating model. Instead, historic structures are layered on top of one another like a coral reef. While the government has begun to develop a new operating model, more work is needed to simplify complex governance arrangements in the centre and within the system.

This paper describes how the system and the centre could work together to deliver a more integrated and devolved healthcare model that can achieve the government’s three shifts. It maps how different functions within the health and care system could operate to deliver the model of change.

Based on engagement with senior leaders across the health and care system, the paper:

• summarises the current state of play and learnings from the past
• presents a more devolved model of change
• outlines the method for delivering this model, driven by the system’s core objective
• describes how delivery of this objective is shared across three core functions
• outlines how delivery could be distributed nationally, regionally and locally
• describes how change can be delivered locally, through a flexible approach to who leads change, and driven by a clear set of principles and policies.

A complex operating context

The government is running an intensive process to develop a ten-year health plan. [2] This will deliver the government's reform agenda: to shift from “hospital to community”, from “analogue to digital” and from “treatment to prevention”. [3] However, the government announced a significant NHS reorganisation programme, while nearing the end of this process. [4] 

The aim of the reorganisation is twofold: decentralise power within the NHS and reduce bureaucracy and duplication. The government will abolish NHS England, integrating its functions into the Department of Health and Social Care (DHSC) and cutting its combined workforce by 50 per cent. This is happening at the same time as 50 per cent cuts to integrated care boards’ (ICBs’) running and programme costs and NHS providers’ corporate cost growth. 

We expect the ten-year health plan to set out more detail on the wider system architecture and clarify the role and accountabilities of trusts, systems and the centre of the NHS

NHS England has confirmed that the ten-year health plan will detail these changes as part of a new operating model that is “rules-based, provides earned autonomy and incentivises good financial and operational performance”. [5] The changes will then be formalised through primary legislation. [6] 

We expect the ten-year health plan to set out more detail on the wider system architecture and clarify the role and accountabilities of trusts, systems and the centre of the NHS. At the time of writing, though, it is unclear how functions will change, especially those held by neighbourhood teams, place-based partnerships, primary care at scale, trusts and integrated care partnerships (ICPs). Work is underway, led by NHS England regional directors and Richard Barker in his new national role, to define a ‘model region’, which will also shape the future role of DHSC nationally. [7]

With a view to laying the foundations for delivery of the ten-year health plan, NHS England’s new chair, Dr Penny Dash, undertook some rapid work with a group of ICB chairs and chief executives to define the future focus, role and functions of ICBs. The first iteration of the Model ICB Blueprint is an important first step towards greater clarity. [8] It reiterates the system leadership role ICBs have as strategic commissioners, working to improve population health, reduce inequalities and improve access to more consistently high-quality care. It also introduces new ‘neighbourhood health providers’, which will sit between ICBs and neighbourhoods in driving delivery of a neighbourhood health service.

The future of place-based-partnerships has been thrown into question by cuts to ICBs’ budgets and, at the time of writing, it is unclear whether it will exist as a distinct geographical layer or become synonymous with neighbourhoods. Given that systems are likely to take different approaches to integrated working at place and neighbourhood level, a flexible approach should be taken to support the models that works best locally. 

In the framework that emerges, system partnerships and collaboration must be front and centre, especially between the NHS and local government (including mayoral strategic authorities). If it is to successfully deliver the government’s three shifts and a neighbourhood health service, the NHS needs to become a better partner and move beyond a purely medical model.

The operating context has become incredibly complex. Healthcare leaders urgently need more clarity about how they are being expected to – and will be empowered to – deliver recovery and reform. The consequences of this lack of clarity have been highlighted in several government reviews, including by Dame Patricia Hewitt and Lord Darzi. [9], [10] These reviews also highlighted the burden of a top-down ‘command and control’ system in which the centre (including regulators) micromanage delivery, distracting healthcare leaders from delivering recovery and transformation. 

With local government embarking on its own significant reorganisation and devolution programme, alignment is more important than ever

The Secretary of State for Health and Social Care has described his ambition “to lead an NHS where power is moved from the centre to the local and from the local to the citizen. Morrison meets Bevan.” [11] This means making the healthcare service more accountable outwards to the communities it serves, not just upwards to Whitehall. Better integration with local government services is crucial to driving this change (as well as with community safety partners and the voluntary, community and social enterprise – VCSE – sector). Historically, local government has been overlooked in the NHS operating model – partly as it has sat outside of NHS England’s remit. However, the reabsorption of NHS England in DHSC’s wider remit offers an opportunity to remedy this. And with local government embarking on its own significant reorganisation and devolution programme, alignment is more important than ever. [12] 

Learning from the past

Recent history suggests that it can be difficult to translate a new operating model into practice – particularly in the context of extreme operational and financial pressures and the time-consuming and disruptive structural reorganisation that often follows.

For example, NHS England’s operating framework – published in October 2022 – sought to translate changes introduced in the Health and Care Act 2022 into practice, by empowering and supporting local systems to deliver on their responsibilities. [13] The framework acknowledged that: 

“This requires a cultural and behavioural shift towards partnership-based working; creating NHS policy, strategy, priorities and delivery solutions with national partners and with system stakeholders; and giving system leaders the agency and autonomy to identify the best way to deliver agreed priorities in their local context.”

The centre and healthcare leaders broadly accept that this operating framework has not been embedded. The reasons for this are threefold. Firstly, between July 2022 and May 2024, NHS England underwent an extensive reorganisation, [14] including cutting 36 per cent of staff, devolving functions and merging five arm’s-length bodies.[i] Secondly, there was a large-scale reorganisation of, and cuts to, local commissioning over the same time period, which hugely impacted the pace of frontline change, integration and efficacy of partnerships. Thirdly, providers and systems faced significant operational and financial challenges. These included increased demand in primary, mental health and urgent and emergency care and a large elective backlog, which were exacerbated by inflation, industrial action and a 30 per cent reduction in ICBs’ running costs in 2023/24. [15] These combined factors led to retrenchment into the status quo command and control structure. 

With the merger of NHS England and DHSC and cuts to ICBs, questions arise about the future of numerous functions currently held by NHS England and ICBs. Many of these functions require highly specialist technical expertise (such as training, implementation and safety, and security management for digital and data functions, including artificial intelligence) and which have significant implications for quality and safety (for example, formal regulation and oversight of trusts and ICBs). It therefore seems likely that the reshaping of NHS national bodies has only just started. [16] 

To succeed where previous attempts have failed, the new operating model must do two things:

• Provide a high-level articulation of the overall function of bodies operating at each of the health and social care system’s geographical footprints– not just NHS bodies.
• Leave sufficient scope for local determination about exactly how services are delivered and by whom.

A model of change

The government’s 2025 mandate to NHS England made clear that a new operating model is needed to support its reforms and to improve performance. [17] The mandate describes a future end state for the health and care system in which:

“The top-down centralised model of control will, over time, need to give way to a more devolved system where ICBs and trusts have greater freedom and flexibility and where patients have more choice and control.”

The government’s change model for the health and care system must therefore aim for an end state in which functions are devolved locally, supported by greater autonomy of local systems, organisations and patients – akin to the Hewitt review’s description of “self-improving systems”.[18] Implicit in this description is an increasingly hands-off, ultimately smaller role for the centre.

This approach can be described as rebalancing the drivers of change in the system. The Human Learning Systems model of public service reform acknowledges that achieving positive outcomes, personalisation of services and best use of resources requires a shift from a focus on control to a focus on fostering collaboration, learning and adaptation as the core drivers of change. [19] This ultimately allows public services to respond to the complex realities of people's lives in a more flexible and ‘human’ way – offering both a better service to users and better value for taxpayers’ money.

In the context of the health and care system, top-down policy needs to be coordinated to effect change in complex systems. Those systems need to sustain learning and mutual support through lateral working with peers. And services need to be co-created with, and accountable bottom-up to local citizens who use them to become human-centred. 

The role of the centre changes in the context of a health and care system which is driven more by bottom-up and lateral drivers of change

Model 1: Rebalancing drivers of change in the health and care system

The role of the centre changes in the context of a health and care system which is driven more by bottom-up and lateral drivers of change. DHSC, NHS England and other national and regional bodies will need to increasingly shift from central priority-setting and delivery towards supporting and enabling local organisations and systems to deliver change and to create the conditions that enable them to do so. For example, most activity relevant to ‘transformation’ should be delegated to ICBs and providers. It will also need to focus on functions benefiting from aggregation, such as digital infrastructure and models of procurement.

Some changes will be needed to ensure the health and care system is set up to deliver this new model. But first, it is important to consider what objectives the health and care system has been set up to achieve.

Objectives of the health and care system

ICSs’ four purposes

Aneurin Bevan founded the NHS in 1948 based on the principles of providing comprehensive, universal, high-quality, patient-centred, collaborative, efficient and accountable healthcare, free at the point of use. Notably, this extended to improving physical and mental health as well as preventing ill health. [20] The NHS’s raison d’etre remains broadly the same today. [21] Arguably the main change the new NHS Constitution must reflect is the move towards a social model of care delivered at a neighbourhood level.

But over subsequent decades the NHS has undergone various reforms and evolutions – with its most recent now underway. There is now a much greater acknowledgement of the inequalities that exist in society, and it has become eminently clear that the NHS is just one player in a complex ecosystem of public services that influence citizens’ health and prosperity. 

The Health and Care Act 2022 introduced integrated care systems (ICSs) – through both integrated care boards (ICBs) and integrated care partnerships (ICPs) – which bring together health, care and other key organisations in a local area to plan and deliver joined-up health and care services. [22] The 2022 Act formalised the ‘triple aim’ as a guiding principle for ICS partners and a statutory duty on NHS bodies within ICSs, encouraging them to work collaboratively to deliver more joined-up and effective care, while also ensuring that resources are used efficiently. [23]

In subsequent guidance, NHS England offered a more contemporary description of the objectives of the health and care system by asking ICSs to fulfil four core purposes: [24]

1. Improve healthcare and population health outcomes
2. Reduce inequalities in outcomes, experience, and access
3. Increase productivity and value for money
4. Support social and economic development
   

This fourth purpose seeks to maximise the NHS’s already significant contribution to economic growth while recognising the importance of socio-economic factors in the wider determinants of health, thus helping deliver the government’s Health and Growth Missions. [25]

As constituent parts of ICSs, statutory NHS and VCSE providers and local government responsible for delivery. How each purpose is delivered should largely be left to local discretion. This is important, as local areas vary in terms of their power structures, quality of relationships and operational capabilities.

Shifting to a more preventative and empowering model of care

In the context of the government’s current priorities, there is one core, cross-cutting objective from which to hang a new system operating model.

The government has set out three clear priorities or ‘shifts’. But in the context of the operating model these can be boiled down to one: the left shift. The analogue to digital shift is a fundamental enabling function and therefore a vehicle for the wider reforms. Meanwhile, simply treating unwell patients in a community setting rather than a hospital building is unlikely to dramatically improve efficiency or outcomes – those services must be preventative in nature. 

The core challenge is therefore shifting to a more preventative and empowering model of care, particularly in relation to higher intensity users, which is delivered closer to people’s homes. This is sometimes referred to as the ‘left shift’. Keeping people well will require different skills to those held exclusively within the NHS.

To deliver this objective, the system must:

1. Move the money: A smaller proportion of NHS spending must go into acute hospital-based activity. This cannot be achieved by demand-side measures alone because there is little or no evidence that these can enable a reduction in acute capacity – much less generating cashable savings. Change therefore must start from an explicit commitment to reducing acute capacity – something which must come nationally and also within systems.
2. Boost out-of-hospital capacity: Simultaneously, capacity needs to be built in out of hospital services – primary, community and mental health settings – so they are able to reduce demand and offer better alternative provision. This also means reengineering a hospital-focused workforce to support care in the community. 

As strategic commissioners, responsibility for 1 and 2 will primarily sit with ICBs. They can achieve this by managing contracts with providers in a way that maximises the value of the available resources and improves population health. Payment reform is needed to enable ICBs invest in earlier, more cost-effective interventions.

The operating model is key to enabling the gain/loss share to align financial incentives. By focusing the entire health and care system on this single challenge, the new operating model can reduce complexity and cost. If the above actions are committed to, the decision about which organisation leads  the shift should be left to local discretion, according to organisational maturity. A range of delivery models is therefore needed. This is explored further in this chapter.

Functions to deliver these objectives

These objectives are delivered through three core functions, which are iterative
and interactive in nature:

Strategy

National and regional teams play a role here by setting the overall strategy, direction and outcomes that the system must deliver. ICBs, as strategic commissioners, also play a role in strategy by allocating resources and contracting for services, using a range of payment mechanisms and incentives to deliver their four purposes.

Delivery

Providers are primarily responsible for delivery of care at place and neighbourhood level and will work closely with ICBs as strategic commissioners to transform care pathways. 

Oversight and improvement

National and regional teams are primarily responsible for overseeing the system based on quality, finance and operational performance and will support organisations and systems to drive improvement within organisations and systems. Organisations will, however, have responsibility for first-line oversight through their boards. As strategic commissioners, ICBs will have some contractual oversight. All organisations will play a role in driving improvement.

Roles and responsibilities: system governance and core functions

This section presents a high-level articulation of the roles and responsibilities of bodies operating at the health and care system’s five main geographical scales: national, regional, systems, place and neighbourhood. More detail is provided in the annex.

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Delivering the system’s core objective: the left shift

Moving the money to earlier, more cost-effective interventions should improve allocative efficiency, boosting productivity to help address the NHS financial challenges (alongside ongoing efforts to improve technical efficiency). This will require “hardwiring of financial flows”

through three levers:

1. Payment mechanisms: A payment mechanism – adopted in the NHS Payment Scheme from April 2026 – which incentivises earlier, proactive intervention. This is likely either an outcome-based contract or capitated contract, where providers keep any savings from allocative efficiency. 
2. Gain/loss share mechanism: All providers along a care pathway must have an aligned financial incentive to deliver care earlier and avoid downstream admissions, ensuring acute providers are not financially penalised for doing so. This will likely be through a lead/integrated care provider or partnership, which sub-contracts services. 
3. Measurement: If the objective is to move money into primary and community-based care, we must know whether it is being achieved. This will require a metric which is monitored locally and nationally and enables intervention when necessary. 

Rather than promoting one delivery model, the centre should create strong incentives for systems and providers to develop a credible collaboration and accountability model that suits their local legacy and assets. The centre should require business plans and medium-term financial plans backed up by clinical plans defining care transformation (in particular around elective care). Monitoring progress in delivering the left shift will allow the efficacy of different models to be assessed and, if necessary, adapted.

Different delivery models

Integration and transformation are being delivered differently across systems. As each ICS is different, enforcement of a uniform approach to delivering the left shift would not work and risks creating unnecessary expense, significant disruption and delaying delivery. To deliver reform, practical, responsive and inclusive governance arrangements are needed to solidify partnership working as the expected standard at the heart of commissioning and delivering quality care. 

Clinical leadership will be key to delivering transformation, as will building consensus between clinical and managerial staff. Appropriate local arrangements should evolve from a robust understanding of system context and commitment to shared principles, generating a partnership structure that is greater than the sum of its parts and maximises the strengths of each unique organisation or contributor. There is a precedent for different approaches to this, as outlined below.

The focus of any delivery model should be on delivering a person-centered and outcome-focused approach. Local leaders should be empowered to elevate where things are best delivered at scale and held accountable for the outcomes they achieve – not for developing a particular structure. 

Within every model, partnership at place level – at a population size of around 250,000-500,000 – will be critical to moving towards more integrated, person-centred care and optimising the use of collective resources. Since the integration white paper and Thriving Places guidance, place partnerships have been the expected delivery model in England. [26],[27] Systems such as Cambridgeshire and Peterborough have a vertical model in which the ICB contracts with each place, potentially delegating commissioning responsibilities and/or financial allocations and a provider or provider collaborative is usually the designated ‘lead’ for integrating care. Leeds is another example of a place-based approach, where budgets are pooled across NHS bodies and local authorities. At this more local geography, commissioning can be integrated with co-terminous local authorities and proactive care can be planned around populations.

In other systems, particularly smaller systems such as Gloucestershire, where there are just two providers, there is a distributed model of leadership. This model may become less common with ICSs becoming larger and fewer in number. [28]

In other systems, the budget is delegated to a lead provider which then sub-commissions services to be delivered at place or neighbourhood level. For example, in Birmingham and Northumbria, a provider is designated to lead the commissioning of services, with delivery devolved to local neighbourhoods. In other systems, like Hertfordshire and West Essex ICS, the primary care at-scale provider is the lead provider of an integrated urgent treatment centre, which they deliver as part of a collaborative with other community, acute and out-of-hospital providers.

These provider collaborative or lead provider models may form the basis of an accountable care organisation (ACO) type approach – a provider with delegated responsibility for improving the health of a particular population cohort and planning the most cost-effective care interventions to that end. Through sub-contracting services, this approach ensures multiple providers across a care pathway have aligned incentives, sharing financial benefit from better managing demand and preventing more costly downstream interventions.  

ACOs have precedence in other countries, including Spain, Germany and the USA, and despite proposing the idea in 2014, the Health and Care Act 2022 effectively moved England towards accountable care systems in the form of ICBs. [29]

However, the current approach does not align incentives across providers. The latest NHS operational planning guidance signaled a move towards lead providers being given responsibility for planning and transformation of local services for a defined population cohort, stepping in the ACO direction. [30] This would require devolving knowledge and skills to provider organisations. NHS England indicated that this may extend to delivering strategic commissioning directly (through delegation arrangements and provider collaboratives), but that an accountable care model would only be explored in the most mature systems. [31] It is therefore a delivery model that is unlikely to take precedence for at least a decade. 

The below model illustrates three emerging ‘delivery models’ for achieving the left shift through place-based collaboration. These are archetypes which are presented to offer clarity. They and not mutually exclusive (for example, place could effectively be a lead provider) and are not intended as a definitive description of the future direction of travel.

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Principles to guide change

1. Devolution and the principle of subsidiarity

The health and care system’s road to recovery and reform is complex, with no quick or easy fix. The resolution must be a joint endeavour involving all ICS partners, supported by the government and NHS England. By embedding a non-hierarchical collaborative governance structure, local systems would have the autonomy they need to lead, while ensuring they align with national health priorities.

As part of this, the principle of subsidiarity should apply, with greater resource and decision-making devolved locally and a centre less focused on performance managing process, and more focused on health outcomes and the things that are best done once for the whole NHS. Local organisations and systems should be given the tools and levers to improve quality, productivity and access and drive change based on what works best locally.

Progress towards a more devolved model must be accelerated, including bolstering the role of ICBs as strategic commissioners. The resources saved by reductions to ICBs’ corporate costs should be used to support the development of mature collaborative structures on the provider side. NHS England’s work on the model region should take into account the devolved model articulated in the government’s mandate and avoid the tendency to ‘scale’.

2. A system approach to change

The centre should provide space for genuine co-design of the most appropriate delivery mechanisms for local populations, with staff and local communities, by not over-prescribing models of care or service delivery models but providing a consistent and stable direction of travel under which places can work together.

National and regional teams should organise packages of support around shared goals and co-developed strategies, reducing adversarial dynamics.

With a rapidly evolving healthcare landscape, financial challenges across health and social care and the wider public sector, and a widening disparity in health outcomes, the imperative to bolster and support leadership that helps drive through systemic change and continuous improvement has never been more pressing. Improvement is more than an add on or nice to have: it is the enabler of the wide-scale change and transformation the health and care system needs. 

To create sustainable change, the sector needs to move into a model that emphasises horizontal, peer-to-peer learning, providing support and empowerment to local leaders so they can deliver it. Leaders should be supported and empowered through the sharing of learning and good practice around how to develop and agree local outcome metrics and how effective cross-organisational teams are built, based on areas which have successfully implemented new models. Organisations such as the NHS Confederation can support the development of a culture of continuous learning, sharing and scaling. 

As part of this, the development of leadership and management capacity at all levels must be supported, including by investing in leadership training programmes for ICB, trust and primary care leaders, fostering capabilities for self-assessment. 

3. Clarity and accountability

ICSs need clarity about the outcomes they are expected to deliver. They also need appropriate governance and accountability arrangements to enable them to embed a delivery model of their choosing.

Effective transformation at neighbourhood, place and system level will require support to build capability and capacity. At the same time, stronger accountable central systems and direction are needed in key policy areas such as data, digital and innovation. There are certain things which benefit from national or regional standardisation such as procurement frameworks, data integration, clear information standards and medicines formularies.

There is a clear role for centralised procurement of essential digital platforms and tools to minimise cost and maximise benefits to the system and also in areas such as governance and regulation of fast-changing digital services (particularly in relation to AI tools) and data adherence and security. 

Other major areas, from resource allocation to oversight, will require the centre to provide clarity and alignment on national policies. There should, for example, be a shift from process compliance to a small number of high-impact and measurable health indicators that are linked to population health. There are questions about the suitability of DHSC as the host for some of these functions previously held by NHS England or whether they will be hosted in existing or additional arm’s-length bodies.

Policies to enable change

The ten-year health plan must deliver the following policy changes as part of the new system operating model:

 1. Payment mechanisms which incentivise improved outcomes

To achieve long-term sustainability, the allocation of resources should be aligned with population health outcomes, such as reduced hospital admissions, improved access to primary care and enhanced patient satisfaction. This would help ensure resources are directed towards the highest value interventions, rather than being spread across low-impact services. Outcomes-based payment mechanisms should incentivise improvements in care quality, safety and experience; improvements in population health and health outcomes; and reductions in inequalities in health outcomes. This approach would incentivise preventive care and encourage more efficient use of resources. 

2. Multi-year funding and planning cycles

HM Treasury confirmed that multi-year budgets would be allowed for the NHS. DHSC/NHS England should translate this into the system by providing the NHS with multi-year funding and planning cycles that are focused on delivering outcomes and aligned with local government. A longer-term approach is crucial to providing greater consistency and certainty, allowing local leaders to focus more on what matters to residents.

3. An enabling centre

Strategy is the alignment of policy and incentives to achieve change, but too often the NHS interprets ‘strategy’ as an extensive to-do list without a coordinated approach to deliver it. There is a need to move towards a smaller set of national priorities that everyone is held to account for (via the NHS Constitution), with more local flexibility depending on the health and care needs of different local communities. The centre can help drive the strategic direction by offering clear outcome metrics and bolster systems to deliver by offering a ‘menu’ of options for them to choose from.

Moreover, national policy and incentives, including supportive oversight, regulation, financial incentives and targets, need to be better aligned to deliver the three shifts. The centre should focus on defining things which support delivery of national priorities, including the three shifts.

4. Procure digital services at scale

Implementing large-scale digital health services has consistently been a challenge for the NHS. Procuring digital services and delivering at scale requires continuously evolving and robust infrastructure which handles frequent, seamless updates. Health services can be both personalised and democratised with modern digital and data infrastructure with central, responsive and adaptive central authority, acting as a service provider and commissioner. Clarity on the governance regime for centralised procurement of digital services is urgently needed, and consideration must be given to capabilities for delivering specialist digital and data functions. 

In the longer term, every citizen can expect to have full access to their health data via the NHS App, linked to a digital health or single patient record. They will be empowered to access, monitor, communicate and manage their own health records, seek accessible advice, tools and clinical information, manage medication and have overall control over how they interact with the NHS and its services, including participation in research. This will be crucial for the successful integration and operation of digital health services across the country. Several obstacles must be addressed, including data security and privacy, ease of use, scalability, interoperability, equity and access, and trust and acceptance.

5. Improve data sharing to support population health management

Several changes are needed to support the integration of data to support population health management and the development of a single patient record to enable self-management.

The government should require suppliers to separate patient data in electronic patient records (EPRs) from clinical use data. This will ensure suppliers adhere to a standardised data framework established by the government, which includes implementable interoperability criteria. Consequently, standardised patient data can be shared seamlessly using Fast Healthcare Interoperability Resources (FHIR) between NHS organisations, eliminating barriers to data interoperability.

To support improved data sharing and population health management and encourage a robust data-sharing environment, the Data (Use and Access) Bill must strengthen interoperability criteria between systems and organisations to enable seamless data exchange. Mandating standardised data frameworks will ensure consistent and reliable data sharing across various platforms and between vendors and providers. In addition, the centre must deliver robust data security and privacy measures. 

6. Proportionate oversight and self-directed improvement

There needs to be an effective success/failure regime to support the shift towards an integrated, devolved system that is set up to deliver the three shifts. The focus should be on supporting self-directed improvement, with punitive levers being used as a last resort. This is a significant departure from the traditional NHS approach to performance management which incentivised organisational decision-making based on satisfying regulatory interests, not those of the wider system or populations. 

NHS England’s draft Performance Assessment Framework confirms that ICBs will no longer play a role in provider oversight alongside NHS England and moves from a system oversight to an individual organisational approach. [32] As this framework is tested and iterated, it is essential that commissioners have the right levers to support collaboration to deliver the left shift.

ICSs need holistic leadership and improvement support from the centre, including regions, to ensure they have the capabilities to effectively discharge their functions, particularly in the context of cost reduction programmes. For ICBs this should focus on strategic commissioning skills, including robust analytics, contracting and resource allocation capabilities. Providers should be given additional support as they move towards lead provider or ACO-type models, and with certain ICB functions likely to be delegated to providers in the upcoming health bill.

Peer review has been an effective driver of improvement in local government for many years. Greater use of peer review in and alongside formal oversight processes can support quality improvement while also helping to identify and spread best practice; all parts of the centre and the system should foster a learning culture.

Oversight should be proportionate, flexible and consolidated, seeking to reduce the burden on providers and ICBs and enable local systems to take ownership of delivery. A core metric for ICS performance should be preventive and empowered model of care, including effective delivery of neighbourhood models. ICBs will continue to have oversight of how providers deliver care against the health outcomes they have commissioned them to achieve for their population, with a focus on population health improvements, patient satisfaction and access to care. NHS England should define a clear pathway for providers to proactively share intel and/or request support from the ICB and/or NHS England to prevent issues from escalating and requiring formal intervention. This should be informed by a dynamic monitoring system which NHS England, ICBs and providers can access to inform decisions and oversight of quality and productivity.

7. Improve pooled budgets arrangements

DHSC and the Ministry of Housing, Communities and Local Government should review the Better Care Fund and Section 75 arrangements as part of a plan to make it easier to pool budgets across the NHS (including primary care) and local government and provide recurrent delegated budgets for place-based partnerships. 

Greater use of these arrangements would help make progress towards better sustainability of the public pound. The government could facilitate this by simplifying and broadening these arrangements, reducing reporting and governance requirements. One crucial part of this is allowing primary care organisations to pool budgets. They are currently unable to enter such arrangements, which is prohibitive to greater integration. 

8. Reset the relationship with citizens

Moving to a truly devolved model will require resetting the system’s relationship with citizens. The expectations of both ‘parties’ will change as part of a reciprocal relationship or ‘compact’:

• The system will give citizens greater ownership and choice over the care they receive and equip them with knowledge to improve their health and wellbeing.
• In return there is greater responsibility placed on citizens. This means the greatest support will need to be given to those who need it most. 

A deeper connection with citizens will ensure that services are built on a strong understanding of population health, promoting good health and wellbeing.

Within the current operating model, those who most need this approach are least likely to receive it.

While the majority of citizens won’t recognise a new operating model, they will notice its consequences. The public expects to see improved outcomes (such as improved access, joined-up systems, clarity on their health, responsiveness).  A clear operating model will be essential to achieving this.

This model should be anchored to citizens through optimising the trusted organisations and familiar expertise that are already rooted in communities. In health, this often means general practice or community pharmacies – visible and accessible services embedded in the daily life of many neighbourhoods. Yet for many people, especially those most marginalised, trust also lies in local voluntary and community sector organisations, peer groups and informal networks. To improve and simplify local access, we must strengthen these trusted entry points and ensure they are connected through local infrastructure and digital tools that make services easier to find and navigate.

The review of the NHS Constitution, which is currently underway and being aligned with the ten-year health plan public engagement, provides an opportunity to codify this new relationship.

9. Support the move to a neighbourhood health service

Neighbourhood working represents a transformative opportunity to address systemic pressures in health and care, declining levels of public satisfaction with the NHS and most importantly, declining healthy life expectancy and growing health inequalities. This model is based on the recognition that the most effective health creation occurs within communities and that long-term sustainability will depend on enabling more local, biopsychosocial models of delivery.

Across the country, promising neighbourhood work is already underway – led by primary care, mental health and community trusts, alongside VCSE organisations, local authorities and communities themselves. [ii] This work should not be about restarting, restructuring or rebranding, but about building momentum, recognising where we need to go further faster and creating shared commitment to neighbourhood working, even amid significant system pressures. Some delivery models for neighbourhood health are led by a place-based collaborative, others by a lead provider (including primary-care at scale, community and mental health trusts or local authorities). Each model has its own merits and drawbacks.

The form these models take should be based on optimising existing assets, expertise and capacity to provide the infrastructure for those working at neighbourhood level, giving them the autonomy and resources to work proactively and collaboratively. The approach should be driven by investing in place-based infrastructure (place-based collaboratives, lead provider models and/or provider collaboratives) to act as a sustainable driver for neighbourhood working. These partners would be expected to deliver against core outcomes for the neighbourhood health service, but with flexibility to respond to wider community and local needs, informed by neighbourhood teams, community insight and population health data. 

Conclusion

Effective governance structures and a clear operating model are needed if the health and care system is to deliver recovery, reorganisation and reform.

A new system operating model is needed to provide clarity on the functions that are needed to shift towards a more preventative and empowering model of care and the roles and responsibilities for delivery

The government has provided a clear vision for the health and care system through its three shifts (the ‘what’). A new system operating model is needed to provide clarity on the functions (the ‘how’) that are needed to shift towards a more preventative and empowering model of care and roles and responsibilities for delivery (the ‘who’). The model must leave sufficient room for local discretion in determining which organisations lead the shift towards a more preventative and empowering model of care, building on what is already working and avoiding delay and distraction from undoing existing effective models. Rather than privileging one model, the centre should create strong incentives for systems and providers to develop a credible collaboration and accountability model that suits their local legacy and assets.

This transformation should be guided by the principles of devolution and subsidiarity, a system approach to change, and clarity and accountability. The ten-year health plan must align policies to incentivise these shifts, ensuring a more effective, efficient and citizen-centred healthcare system.

The NHS Confederation will be doing some more detailed work on delivery models for the left shift and neighbourhood health. Please get in touch with Annie Bliss to find out more.

Annex

This annex presents a more detailed breakdown of the roles and responsibilities of bodies operating at the health and care system’s five main geographical scales: national, regional, systems, place and neighbourhood. It describes how each layer could deliver its core functions and summarises the challenges that each is experiencing.

Roles and responsibilities

References