Local authorities will take on the health improvement functions currently carried out by primary care trusts in a radical overhaul of the NHS, the government has announced.

The White Paper Equity and Excellence: Liberating the NHS, published yesterday by Health Secretary Andrew Lansley, also said the coalition will simplify and extend the use of powers that enable joint working between the NHS and local authorities.

Other key announcements include the establishment of an NHS Commissioning Board to lead on achieving health outcomes and allocating resources, a network of GP consortia with responsibility for commissioning care, and a Public Health Service to cover public health evidence and analysis. All NHS trusts will become or be part of a foundation trust under the plans, with the government aiming to create “the largest social enterprise sector in the world”.

Local authorities will take on the function of joining up the commissioning of local NHS services, social care and health improvement. PCTs – and strategic health authorities – will be scrapped, most likely in 2013.

The government said the move would “realise administrative cost savings, and achieve greater alignment with local government responsibilities for local health and wellbeing”. The transfer of local health improvement functions will involve ring-fenced funding and accountability to the Secretary of State for Health.

Local authorities’ responsibilities “will include:

• Promoting integration and partnership working between the NHS, social care, public health and other local services and strategies
• Leading joint strategic needs assessments, and promoting collaboration on joint commissioning plans, including by supporting joint commissioning arrangements where each party so wishes, and
• Building partnership for service changes and priorities. There will be an escalation process to the NHS Commissioning Board and the Secretary of State, which retain accountability for NHS Commissioning decisions.”

The paper adds: “As well as elected members of the local authority, all relevant NHS commissioners will be involved in carrying out these functions, as will the Directors of Public Health, adult social services, and children’s services. They will all be under the duties of partnership.”

Representatives of Local HealthWatch – local involvement networks that will be part of a new independent consumer champion, HealthWatch England, based within the Care Quality Commission – will ensure feedback from patients and service users is reflected in commissioning plans. Local HealthWatch will be funded and accountable to local authorities.

The new arrangements will be delivered by “health and wellbeing boards”, which will take the place of the current statutory functions of health overview and scrutiny committees.

“These boards allow local authorities to take a strategic approach and promote integration across health and adult social care, children’s services, including safeguarding, and the wider local authority agenda,” the paper said.

The arrangements are also intended to give local authorities influence over NHS commissioning and corresponding influence for NHS commissioners in relation to public health and social care.

The paper said: “While NHS commissioning will be the sole preserve of the NHS Commissioning Board and GP consortia, our aim is to ensure coherent and coordinated local commissioning strategies across all three services, for example in relation to mental health or elderly care.

“The Secretary of State will seek to ensure strategic coordination nationally; the local authority’s new functions will enable strategic coordination locally. It will not involve day-to-day interventions in NHS services.”

The Department of Health said it will consult fully on the details of the new arrangements, which it claimed were about devolving powers from Whitehall to patients and professionals, and streamlining the NHS.  It expects £20bn in efficiency savings by 2014.

Patients will have more choice and control, based on the principle of “no decisions about me without me”, it said. Patients will be able to choose which GP practice to register with, regardless of where they live.

Health Secretary Andrew Lansley said: “The NHS is our priority. That is why the coalition government has committed to increases in NHS resources in real terms each year of this Parliament. The sick must not pay for the debt crisis left by the previous administration.

“But the NHS is a priority for reform too. Investment has not been matched by reform. So we will reform the NHS to use those resources far more effectively for the benefit of patients.”

Cllr David Rogers, Chairman of the Local Government Association’s Community Wellbeing Board, called for councils to be given a central role in the outcome of any NHS reorganisation.

He said: “They know their area best and working in partnership with health professionals are best placed to help improve the health of residents and respond to circumstances in their areas.

“Town halls want to promote healthy, active lifestyles and help people live longer, happier lives. With a long and proven history of addressing public health issues, they are ideally placed to deliver these goals and guarantee public involvement in local commissioning decisions."