What is commissioning and how is it changing?

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Commissioning is the process by which health and care services are planned, purchased and monitored. Here we look at the commissioning process in more detail, the organisations involved and how it is changing.

What is commissioning?

    Commissioning comprises a range of activities, including:

    • assessing needs
    • planning services
    • procuring services
    • monitoring quality. 

    The process, which is repeated typically on an annual basis, is often shown as a cycle:

    High res commissioning cycle
    Image courtesy of NHS England

    Who is responsible for commissioning?

    Clinical commissioning groups

    The majority of NHS England’s budget is allocated to clinical commissioning groups (CCGs). In 2018/19, CCGs spent £85.4 billion out of the £112.7 billion that NHS England spent on the day-to-day running of the health service.

    When they were first established in 2013, there were 211 CCGs, but over time the number has changed and is continuing to change, as described in the section on joint commissioning below.

    CCGs have a statutory responsibility for commissioning most NHS services including urgent and emergency care, acute care, mental health services and community services. Increasingly they are also involved in commissioning primary care and some specialised services (see section on collaborative commissioning below).

    CCGs are groups of local GP practices whose governing bodies include GPs, other clinicians such as nurses and secondary care consultants, patient representatives, general managers and – in some cases – practice managers and local authority representatives.

    NHS England

    As well as providing strategic oversight for the NHS, NHS England is responsible for directly commissioning some services. This includes specialised services, such as neonatal services and treatments for rare cancers, and primary care, including GPs, pharmacists, dentists and opticians – although increasingly these responsibilities are being shared with CCGs (see below). NHS England also commissions some public health services, such as immunisation and screening programmes, as well as health care for people in prisons and secure units and some services for the armed forces.

    NHS England’s total spending on direct commissioning in 2018/19 was £24.5 billion and most of their commissioning function is delivered through seven regional teams.

    As well as commissioning services directly, NHS England is responsible for assuring the quality of CCG commissioning through an annual assessment process.

    Local authorities

    Local authorities are responsible for commissioning publicly funded social care services. This includes services provided to people in their own homes as well as residential care services. In 2017/18, total expenditure on adult social care by local authorities was £21.3 billion.

    Since 2013, local authorities have also been responsible for commissioning many public health services including sexual health services, health visitors, school nursing and addiction services (as mentioned above, some public health services are commissioned by NHS England). Since 2013, funding allocated to local authorities for public health services has been ring-fenced (ie, cannot be used for other purposes), and in 2019/20, the public health grant to local authorities was £3.1 billion. Government is yet to decide whether the grant will continue to be ring-fenced in future years.

    In addition, health and wellbeing boards, formal committees of local authorities that bring together local authority and NHS representatives , are responsible for carrying out a joint needs assessment with CCGs and developing a joint health and wellbeing strategy for their local population.

    Commissioning support organisations

    Support for commissioning activities is available from commissioning support units (CSUs) and a range of private and voluntary sector organisations.

    These organisations support commissioners in a range of ways. For example: helping them plan and manage services by providing access to real-time information about the local health system; enabling them to deliver better population health outcomes and integrated care through analytical and transformation support; and supporting their operational functions by providing transactional services like finance and payroll.

    Following a number of mergers, there are now five CSUs in England and they are currently governed by NHS England. They provide services for a range of organisations that include local authorities and hospitals as well as CCGs and NHS England, and they are increasing their support to whole systems rather than just individual organisations. In 2019/20 NHS England asked them to focus more resource on supporting sustainability and transformation partnerships (STPs) and integrated care systems (ICSs) in particular (see below for more on what these are)

    How is commissioning changing?

    The current system is based on arrangements set out in the Health and Social Care Act 2012, which aimed to put GPs at the forefront of the commissioning process. Although the structures established by the Act have remained in place since it came into force in 2013, the way that commissioning is delivered in practice has evolved since then – and is continuing to do so. NHS England and NHS Improvement have proposed legislative changes to support these new ways of working, but there is currently no timetable for putting the proposals before parliament.

    Key changes to commissioning include the delegation of some responsibilities from national to local organisations and systems, and greater joint working between different commissioning organisations and between commissioners and providers. All these changes are intended to support the development of more integrated systems of care, where services are better coordinated across the NHS and social care; and an increasingly ‘population--health’- based approach , that considers how best to use local resources to address the full range of factors that contribute to health.

    Some of the key changes that have taken place, which are likely to characterise the development of commissioning over the next few years, are set out in the sections below.

    Commissioning services collaboratively

    Primary care

    The NHS five year forward view (2014) set out the aim to give CCGs more influence over the NHS budget. This was intended to support a shift in investment from acute to primary and community services . In line with this, all CCGs now have some kind of role in commissioning general practice (GP) services through a co-commissioning agreement with NHS England. The form of this arrangement varies depending on the level of responsibility transferred: while nearly all CCGs have now had responsibility for GP commissioning fully delegated to them (this is NHS England’s preferred model), a small number have different arrangements.

    Specialised services

    NHS England recently set out plans to give local systems (rather than just commissioners) a greater say in how the specialised commissioning budget is spent in their area. During 2019/20, new arrangements will be developed whereby sustainability and transformation partnerships (STPs) and integrated care systems (ICSs) (more on what these are below) are given an advisory role in specialised services planning. Local areas can apply to take on greater responsibilities, although there is no single model for this and proposals are approved on a case-by-case basis. Greater Manchester is an example of an area that has taken on greater responsibilities for commissioning a range of specialised services.

     

    Joint or integrated commissioning

    CCGs

    CCGs are increasingly working together to commission services across their local populations and deliver economies of scale. In many areas two or more CCGs are sharing staff or have shared management structures; most now share accountable officers. Some CCGs have established new governance arrangements to support joint commissioning, such as joint committees. These arrangements are often accompanied by the pooling of commissioning budgets. Some CCGs have gone further by formally merging with their neighbours into a single organisation. Since CCGs were created in 2013 there have been 10 formal mergers, reducing their number to 191 (as at April 2019). More mergers have been proposed for 2020, which – if approved – could further reduce CCGs numbers by a third. The NHS long-term plan said that integrated care systems would cover the whole country by 2021 (see below) and that commissioning arrangements would be streamlined to support this, with ‘typically’ one CCG covering each ICS area. This announcement, along with a requirement that CCGs reduce their running costs by 20 per cent by April 2020 (compared to 2017/18 levels) has accelerated the pace of proposed CCG mergers.

    CCGs and local authorities

    Many CCGs and local authorities are also working together to support more integrated health and social care. Arrangements vary, ranging from joint working to the establishment of new governance and financial arrangements, including integrated commissioning boards and pooled budgets. Some local authorities have transferred commissioning responsibilities to CCGs and vice versa, and some areas have made joint appointments across the two organisations – for example, in Tameside and Glossop, the CCG accountable officer is also the chief executive of the local authority. The Better Care Fund, a national programme designed to support integrated care, encourages CCGs and local authorities to work together, by pooling health and social care budgets. NHS England is also encouraging local authorities to work closely with the NHS to commission joined-up public health services. For example, they recently said that they want collaborative commissioning to become ‘the norm’ for sexual and reproductive health services – an area where different parts of a patient’s pathway are currently commissioned by NHS England, CCGs and local authorities.

    Sustainability and transformation partnerships and integrated care systems

    Since 2016, new ‘system-level’ planning structures that bring together commissioners and a range of providers from the NHS and local government to plan collectively across local areas have been developing. Initially 44 STPs were established to agree system-wide priorities and plan collectively for local needs. In some areas, STPs have evolved into ICSs, a closer form of collaboration in which the NHS and local authorities take on greater responsibility for managing resources and performance. At June 2019 there were 14 ICSs, but this will change, due to the NHS long-term plan announcement that ICSs will cover the whole country by April 2021 (replacing STPs). The development of these system-level planning structures is one of the drivers behind the changes to commissioning, such as joint working and mergers, described above. STPs and ICSs are not statutory bodies, and accountability remains within the individual organisations. In most cases ICSs cover the same geographical area as the STP from which they evolved, although this is not always the case.

    Devolution

    In some places, devolution is being used to support system-wide approaches to commissioning. The most prominent example of this is Greater Manchester, where CCGs, local authorities and other local bodies have come together to take responsibility for the entire local health and care budget. These arrangements were enacted through an agreement between the Greater Manchester Combined Authority, NHS England and CCGs, and are supported by new governance structures. Other areas, including Surrey Heartlands, London and Cornwall have also agreed devolution deals, but they are not on the same scale as the Greater Manchester deal.

    Providers and commissioning

    There are also examples of providers taking on a greater role in commissioning and it is likely that as new integrated provider models develop, this will start to happen more frequently. For example, in some parts of the country, NHS England has devolved commissioning responsibility and budgets direct to provider organisations for specialised mental health services, for example, some child and adolescent mental health services. Since 2014, commissioners and providers have been working together to develop new care models that bring together local NHS organisations from different parts of the health system to provide a range of services and deliver more integrated care for patients. In the future, as these models continue to develop, commissioners may contract with a single integrated organisation or partnership of organisations to manage a single budget and deliver a range of services for the local population, focusing on the population’s health and wellbeing. A new ‘integrated care provider contract’ is under development to support this. This may lead to commissioners taking a more strategic role in overseeing the local health system, focusing more on overall performance and less on individual services. Within these systems, providers may also take on some activities currently carried out by commissioners, such as service development and sub-contracting for and monitoring the performance of individual services. These are sometimes called ‘tactical’ commissioning tasks.

    Different levels where changes are taking place

    New terminology is starting to be used by national bodies and local NHS organisations to describe the different levels or geographies within which services are planned and/or delivered. CCGs within ICSs are working through what services and activities should be conducted at different levels in future.

    Summary

    Since the 2012 Act came into force, there have been a number of changes to the way that commissioning is delivered in practice. There is a trend towards a system-wide approach in which tasks previously conducted by individual commissioning organisations are starting to be undertaken collaboratively. This more integrated approach to commissioning mirrors the more integrated approach to delivering health and care services that has been developing for some time. Local areas are being encouraged to develop arrangements that suit their local circumstances, rather than these being directed centrally. It is likely that as these models develop, more CCGs merge and the shift towards ICSs in particular gathers pace, the way commissioning is delivered and the role of CCGs will continue to evolve.

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    Comments

    Michael byatt

    Comment date
    21 September 2017
    Integrate accountability governance budget management
    Board that overseas contracts and scrutiny of performance provision
    It is not gps they are providers,not health scrutiny its toothless its not health wellbeing and defintely not public health
    Current organisational structures dont work

    Patricia Carey

    Position
    Registered Manager/Lead RN,
    Organisation
    Mrs.
    Comment date
    25 September 2017
    The current organisational structure does not fully recognise any partnership working other than NHS bodies, health and wellbeing is a fey function of delivery of care,so not involving key partners such as charities is shortsighted.
    There would be a great deal of benefit gained form working with those voluntary and registered charity organisations who work to support local communities and also deliver services to local communities.
    None of the commissioning involves working collaboratively with these groups,apart form the occasional spot purchasing of services when the NHS finds itself is under pressure.
    Some recognition by way of partnership working would go a long way to giving these organisations some recognition.
    If they are good enough when the pressure is on, then surely they should be a preferred partner in the grand scheme of things

    Guy Patterson

    Position
    Health & Social Care Coordinator,
    Organisation
    Dorset HealthCare
    Comment date
    25 September 2017
    Completely agree with Patricia. Statutory organisations could and should do more to promote the work done by charities, given the crucial contribution they make. This would mean, i suspect, some sort of 'paradigm shift' in the way we perceive and attribute value to non-paid activity, particularly in crisis situations that reveal the paucity of statutory resources and the extraordinary resourcefulness of people when they must rely on themselves.

    Biman Ghosh

    Position
    Retired Project Manager,
    Organisation
    None
    Comment date
    25 September 2017
    I would have thought "Demand Analysis" should be done before designing of service delivery and procurement . However, I am yet to see any detailed analysis of patient demand except often it is reported that the demand has increased due to increase in elderly population increasing. While this may happen but not been ever produced in real data.

    Benjamin Taylor

    Position
    Chief Executive, Public Service Transformation Academy,
    Organisation
    & Managing Partner, RedQuadrant
    Comment date
    27 September 2017
    A very clear, lucid, and accurate account of the current structure of 'formal' commissioning within the NHS.
    I think it is worth adding to this, though, that the thinking about commissioning that has developed through the Cabinet Office Commissioning Academy (http://commissioning.academy), now run through the Public Service Transformation Academy (www.publicservicetransformation.org) has developed in different ways to think about commissioning as an approach to real public service transformation. I appreciate that much commissioning with the NHS is still deeply constrained - for both good and bad reasons - but the 'commissioning cycle' which illustrates the start of this article is, to me, a useful staging point, but talks about managing (reducing) budget to meet (increasing) need through procuring services. Some commissioning practice, across sectors, now focuses far more on achieving (individual and group) outcomes by marshalling resources (conceived widely, including community, voluntarism, individual strengths and actions etc etc) to test and learn from interventions - an outcome not a service focus.
    I would hate readers to think that the excellent definition in this article represents the full breadth of developments in commissioning.
    Readers who are interested in more might like:
    - my presentation: https://www.youtube.com/watch?v=8WymIJ84ISM&lc=z12rwntyhniay3l5v04ci5cq3tr5xdxjao00k&utm_content=bufferdaa06&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
    - and these articles: http://www.publicfinance.co.uk/opinion/2017/04/focus-outcomes-achieve-better-social-care-results-less-money and http://www.publicsectorexecutive.com/Public-sector-focus/commissioning-for-the-future
    as tasters.

    You can also see our events (mostly free) at http://publicservicetransformation.org/events/year.listevents/2017/09/27/-

    Cheers
    Benjamin

    R

    Position
    Rtd,
    Comment date
    22 September 2019

    Could we have a comparison with the parts of the nhs that do not have this structure, Wales and Scotland? And how do concepts like person centred fit?

    Rtd -2-

    Position
    rtd,
    Comment date
    06 November 2019

    While increasing competitiveness within the NHS to reduce costs and encouraging this competition with rewards will inevitably move the focus away from the central role of patients/public "the patient is the centre of everything we do", and increasingly focus on the role CCGs have in reducing NHS costs. The patient/public will fade out of view. As a patient I am despairing of the treatment I am receiving, my GP has her hands tied, cannot prescribe the treatment I need, so I self source and we both shake our heads at the inanity of it all. Patients are being sacrificed.
    Too many of my friends are going 'private' in order to feel well..
    Pushing patients who need 'normal' medicine to private practice is not on the NHS Balance Sheet as a consequence of reducing budgets. It should be!!

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