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Editorial Thursday 19 July 2012: The money. Again.

A few years ago, I programmed and chaired a conference called 'Following The Money'. The title still works. It's just about all you can do to understand the plumbing of power in practical terms.


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We know - roughly - how money will flow around the new system.

DH still gets a bit for public health co-ordination, and another ring-fenced (for now) chunk goes to local authorities.

The lion's share goes to the NHS Commissioning Board, which takes off about £20 billion for its specialist commissioning, lobbing about £60 billion to the new clinical commissioning groups (CCGs: statutory commissioning bodies called 'NHS+ local name' with mandated composition of boards that must meet in public; in no way like PCTs, as Chris Naylor's recent Kings Fund blog noted of their size).

Prices (via the national tariff) will be set by economic regulator Monitor, after input from NICE and the NHS Commissioning Board. (There is a conflict of interests issue ahead for Monitor, which also has an ongoing role as the provider regulator for foundation trusts.)

Tariff includes bonuses for good performance and penalties for bad performance under CQUIN: these should be Strictly enforced. It will be interesting to see how reductions in management capacity, to 45% of the 2008-9 level by 2015, affect this in practice.

Tariff is going to do a lot of the heavy lifting of reconfiguring providers, as Simon Stevens pointed out in our interview last April, and is therefore likely to go in one direction. Here's a clue: it's not up.

Foundation trusts are to be allowed to make up to 49% of their income from private practice. Any increase of private income by more than 5% per year requires a majority of the governors' consent.

National pay bargaining may be under threat, the south-west consortium suggests, although its freezing has contributed significantly to the achievement of the £20 billion Nicholson Challenge on efficiency and productivity so far.

Grey areas
There are some grey areas. We know a little, but not a lot about them.

The first is the operation of the NHS Property Services Limited (propco) to inherit the primary care estate. Health Service Journal has followed this well, recently revealing that the propco will will have 2,500 ex-PCT staff and a portfolio of “several thousand” properties with a total value of around £5 billion, on which it will charge market rents, expected to be higher than the current charges for use of these NHS estates.

HSJ reports that the propco "will have an interim structure for its first two to three years, led by a national board with four directors. Beneath them will sit four 'sub-national' directors, each covering one of the existing strategic health authority cluster areas, and between 16 and 20 'patch estate managers' responsible for smaller geographic areas".

It also reports a background document stating that “Ministers have confirmed they are content with the proposal of an interim model capable of operating for some 2-3 years, until the full commercial model can be developed”.

Here are a few quick questions.

1. The private provision sector is not expanding, nor is private medical insurance. The economy is not roaring away. Where is the demand for FTs to do more private provision?

2. Is there an asset lock on the propco's inherited estate, or on the proceeds from any sales of surplus?

3. If there wasn't the HR management capacity or will to stop Agenda For Change being inflationary before, how will local pay bargaining make things any better when management is being cut and demonised as "bureaucracy"?