Life after NHS England

It costs the country just over £180bn a year to run the NHS; Daniel Taylor asks: how do you govern £500m a day of public money?

Western health systems are at a pivotal juncture. In England, the government’s plans to dissolve NHS England (NHSE) and absorb its functions centrally is a further shock to a service that is reeling from repeated organisational change and experiencing continuous operational pressure like never before. This is alongside 50% reductions to ICB budgets and pressures on trusts to reduce their corporate service costs. It represents the biggest shake-up for the sector in more than a decade, unravelling the last surviving elements of the Lansley reforms of 2012. Interestingly, it would take the high-level political control of the NHS nearer to the models in Scotland and Wales.

This is a significant changing of the guard and akin to the disruption seen in some other sectors, particularly education and local government, which is going through its own significant structural reorganisation.

For us at GGI, it raises some profound questions about governance. Will the changes lead to a more effective and responsive NHS? Or will it risk further entrenching inefficiencies and remove a pair of eyes that could spot when things were going wrong in health services far from Westminster or Whitehall? Critics could easily point to poorer delivery and outcome issues in Scotland and Wales, and moving board accountability to direct political control.

The case for the abolition of NHSE appears driven in the main by a desire, given the state of the public finances, to remove any apparent duplication of functions and deliver savings and efficiencies. It is also entirely possible that the health secretary and other senior people in government have looked at the performance and budgets of the NHS in 2025 and judged that the people and organisations directing and overseeing the system at national level have failed and should be replaced.

Major organisational change in the public sector is the prerogative of government but there are major questions about how this change will be implemented and what impact it will have.

Education lessons

A useful parallel to explore in understanding the implications of NHSE’s dissolution is the experience of the Department for Education (DfE) and its policy on academies. In his book Broken State, Sam Freedman highlights the difficulties the DfE faced in adapting to the transformation from local authority oversight to the academy model.

By stripping local authorities of their operational roles and shifting responsibility to the DfE, the government struggled to maintain the flexibility and responsiveness that schools needed. While the intention was to foster innovation, it often led to inconsistencies and inefficiencies in how academies were governed, with some schools flourishing while others suffered from a lack of adequate support and oversight.

Centralising NHS oversight at the DHSC risks replicating these challenges. NHSE supposedly functions as an independent entity, allowing for a degree of operational flexibility and autonomy that is vital in responding to the complex, region-specific challenges faced by integrated care boards (ICBs) and trusts. Removing this independent oversight could paradoxically result in a more bureaucratic structure that may struggle to adapt to the fast-paced and regionally diverse nature of healthcare delivery in the UK. Also, one has to honestly ask how robustly NHS England was able to steer a path free of political independence.

The role of ICBs and trusts

With NHSE out of the equation, ICBs and trusts face an uncertain future. ICBs have been told to cut their budgets by 50% and this is on top of the 30% cuts they have recently delivered. NHS providers have been asked to cut their corporate costs by 50% of the increase since the pandemic hit. There have been absolutely no details as to whether, for ICBs, their significant list of legal accountabilities will be reduced. Neither has a plan for rationalisation been produced.

Will the DHSC, with its traditional focus on policy rather than operations, be able to provide the same level of support? It seems unlikely, although many NHS England staff will move over. With such sensitivity over finances and performance standards, it seems unlikely that ICBs and trusts will be left to navigate their operational challenges. This could create a governance vacuum where local bodies struggle to adapt without the necessary guidance from a national body designed to coordinate and steer the system.

Balancing centralisation with local autonomy

The Labour government's drive to centralise NHS oversight at the DHSC may offer certain opportunities. By removing NHSE, the government could streamline decision-making processes and eliminate what it perceives as redundant layers of bureaucracy. For instance, greater control at the DHSC level could help align health and social care policy more closely and facilitate a more unified, coordinated response to health crises such as pandemics.

However, this approach comes with significant risks. The stripping away of both funding at ICBs and their capacity and taking out costs from the corporate services in trusts, risks removing their ability to conduct more transformational programmes and innovative areas of work, particularly at scale. The ability of ICBs and trusts to respond to the nuanced and diverse healthcare needs of their local populations could be compromised. The flexibility to innovate and provide tailored solutions at the local level may be stifled if local decision-makers must work within the confines of a more rigid, centrally governed system.

In much the same way that the academisation policy in education led to both winners and losers, so too could this reorganisation of NHS governance. In some cases, local organisations may benefit from the streamlined coordination and clearer lines of authority that come with centralisation. But in others, particularly for organisations that face unique challenges or that have developed innovative ways of delivering care, centralisation could hinder progress and create operational bottlenecks.

Opportunities for reform

Despite these risks, there are opportunities for reform if Wes Streeting’s proposals are handled with care. By ensuring that local bodies such as ICBs and trusts develop the necessary autonomy and are supported by a restructured DHSC, the government could create a more responsive and accountable health system. A clear understanding of governance boundaries, supported by robust frameworks for collaboration and oversight, will be essential.

Moreover, the integration of health and social care services could be better achieved under a more centralised structure, provided it is paired with a devolved, bottom-up approach that empowers local bodies to tailor solutions to the needs of their communities.

By drawing on the lessons learnt from education reform, where a hybrid of central and local governance models has proven effective in certain areas, the Labour government could craft a healthcare system that is both nationally coordinated and locally responsive.

Over the past 15 years, GGI has assisted numerous healthcare organisations through many changes—from local mergers to the establishment of integrated care systems. Whatever lies ahead for the sector, we are ready to offer our support.

A delicate balance

The dissolution of NHS England presents both significant risks and potential rewards. While it offers the chance for streamlined governance, it also raises fundamental questions about how the NHS can continue to operate effectively without the intermediary body that has long provided oversight and support.

Learning from the challenges faced by the Department for Education in its pursuit of centralisation, the Labour government must tread carefully, ensuring that local autonomy is not sacrificed in the pursuit of efficiency. With the right checks and balances in place, there is potential for a more unified and effective healthcare system that can meet the needs of an increasingly diverse and complex population.

The question remains: will the Labour government succeed in striking the right balance between centralisation and local flexibility? Only time will tell.