In November NHS England announced a new raft of CCG mergers, reducing the number of commissioning groups from 211 in 2013 to 191 today. As CCGs struggle with the demand to cut 20% from admin budgets, it’s likely there will be more. We asked Gerard Hanratty, partner at Browne Jacobson, about the legal process that takes place when local CCGs decide to merge
Many CCGs are looking at how they can strengthen and formalise their collaborative working arrangements with neighbouring CCGs. As part of this process there will, inevitably, need to be a discussion about whether such arrangements could be – or are – a precursor to a formal merger.
While practices won’t, necessarily, be directly involved in the merger process a CCG merger will directly impact the day-to-day running of your practice and change the people that you interact with at a CCG level. Understanding the process which NHS England follows in assessing CCG merger request should help you understand the process – and its likelihood of success.
NHS England’s Procedures for CCGs to apply for constitution change, merger or dissolution sets out the criteria that will need to be satisfied. It also emphasises that the, ‘process to merge two or more CCGs will require the commitment and leadership of CCGs’ governing bodies. Mergers should only be considered when there are demonstrable benefits to patients from the proposal, and the management of the merger will not be detrimental to the performance of the individual CCGs throughout the process.’
In determining whether to approve a merger NHS England will consider various factors, including the statutory-based criteria, such as:
Coterminosity with local authorities
Where coterminosity is an issue, a good working relationship with the relevant local authorities, and a clear narrative about why coterminosity has not been achieved, will be required.
It is essential to ensure the continued engagement, and support, of the members of each relevant CCG during a proposed merger process. Engaging with members only on the ‘formal’ aspects of the merger (for example, a new constitution) is not enough; they need to be actively engaged throughout the process and new governance arrangements must ensure strong clinical leadership.
Where possible, governance arrangements should be designed to avoid any appearance of priority being given to one of the merging parties.
Financial factors, and the potential for cost-savings through economies of scale, are often one of the key issues driving a merger. Clear financial controls and assurance, including appropriate governance arrangements for any transitional period, will be needed. A due diligence exercise, to establish liabilities and key risks, should also be undertaken.
Arrangements with other CCGs
Aside from ensuring that any established patterns of partnership working are reviewed and revised to reflect the proposed merger, specific issues relating to other neighbouring CCGs may also need to be considered.
For example, if one neighbouring CCG has decided not to participate in a merger, but will still need to work in close collaboration with the new CCG, then careful consideration will need to be given as to how this will work. For example, will a joint committee arrangement be needed, or is something less formal sufficient?
Non-statutory factors NHS England may consider include:
- Strategic purpose
Is there a good case for merger supporting the strategic intention in the relevant sustainability and transformation programme (STP)? One of the other factors that NHS England looks at is whether the arrangements are ‘future proofed’. Grounding the proposals in wider system change will help to make the case for change. Linked to this are…
- Prior progress
Is there a clear track record of strong collaborative working? Ideally this will include formal joint working through joint committees – at least in the run-up to any formal merger.This will help demonstrate a shared commitment to a merged entity, the ability to work together (including the ability to deal with disputes or disagreements) and help to shape the governance structure of the new entity.
- Leadership support
Wide support for the merger from across the STP will help to support the case for change. As above, joint working will help to support this.
- Ability to engage with local communities
One of the challenges of bringing two or more smaller organisations together is the need to try and ensure continued flexibility, accountability and responsiveness to local communities.
Ensuring that governance arrangements provide for appropriate layers of accountability and decision-making will help with this, as will the use of locality (or equivalent) arrangements to enable membership involvement at smaller, more local footprints. Such arrangements should be reflected in a revised CCG constitution, and any associated documents, such as a CCG handbook and/or collaboration agreements.
Although these factors are formally linked to any proposal to merge, they also form a helpful framework when considering any proposal to develop closer and more formal integrated working.