When the Health Secretary announced major structural reforms of the NHS this week, it was almost ten years since the NHS underwent the Lansley reforms - among the biggest reorganisations in its history. Responsibility for commissioning local healthcare services, held previously by primary care trusts, were given to consortia of General Practitioners (GPs). Once seen as the family doctor, GPs were allocated billions of pounds to source healthcare services for their local populations in Clinical Commissioning Groups (CCGs).

At the time, Government recognised this radical change could present some unhealthy conflicts of interest. If left unchecked, GPs would be able to commission work from themselves. The risks inherent in this arrangement – that those commissioning services may put their own interests above patients’ – led ministers to ban this practice until 2015, when NHS England loosened the rules.

During this process of liberalisation, the National Audit Office reviewed how these potential conflicts of interests would be managed. It identified the scale of the potential risk was large, but did not yet have the opportunity to see how these presented over time. Our latest report reviews both the scale and nature of these conflicts and how they are being addressed (or not, as the case may be) in the latest wave of reforms to local commissioning.

We reviewed the accounts of 185 CCGs for the year 2018/19 and identified 150 CCGs whose accounts included ‘related party transactions’ - the transfer of resources, services or obligations between connected individuals or organisations, regardless of whether a price is charged - involving the members of the governing body of the CCGs in question. Across those 150 CCGs, we found £1.5 billion in related party transactions involving CCG governing body members. The average value of related party transactions for each CCG governing body was £11 million.

Analysis of the conflicts of interest registers from a random sample of 20 CCGs found a total of 819 potential conflicts declared – an average of three per governing body member.

We did not investigate whether any of the £1.5 billion in payments were inappropriate and there is no suggestion that any of the individual CCG members have benefited illegitimately from their involvement in CCGs. However, the findings reveal the sheer scale of funds implicated in conflicted decision making something which would not be tolerated in other parts of the public sector. This practice needs to be reined in.

More recently, local CCGs have merged and submerged under Sustainability Transformation Partnerships (STPs) and Integrated Care Systems (ICSs). These amorphous groups, without a clear status in law, are increasingly responsible for tens of billions of pounds of healthcare budgets. Worryingly, their current governance arrangements are even weaker than those for CCGs.

We reviewed publicly available information to understand more about where responsibility lay within these new groups and how potential conflicts of interest were managed. Of the 44 STPs/ICSs we found:

• Eighteen (40%) did not publish even basic information about how they are run, such as the names of their senior leadership team, a constitution setting out the terms of the partnership/care system, or a diagram outlining where responsibility and accountability lies.
• Twenty-eight (60%) did not publish any minutes of board meetings over the last year. It is not clear whether this is because there were no board meetings, or that these meetings were taking place in private.
• Just one made a register of interests held by its senior members readily available online.

Again, we make no allegation of known wrongdoing, but the complete absence of formal governance arrangements, defined in law, combined with responsibility for large amounts of public money is asking for trouble.

The NHS is under immense pressure during the current pandemic response and Ministers probably wish they had completed these governance changes a year ago. However, to protect the integrity of our healthcare system for generations to come the gaps identified in our report need addressing. NHS England recently consulted on proposals to move ICSs onto a statutory footing. If implemented properly, this has the potential to address many of the issues we identify in our report. Until then ICSs should take the initiative themselves by becoming more transparent and accountable.