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Joined at the hip

Interest in merging the organisational structures of local authorities and primary care trusts is growing. Helen Mooney reports on the opportunities – and the challenges.

In the summer of 2008 Herefordshire County Council and Herefordshire Primary Care Trust took a leap of faith. They became the first local authority and PCT  in England to merge their organisational structures.

Although local government and NHS organisations have a legislative duty to work together, none before had made such a bold move. The council and PCT in Herefordshire now work under a single management team and chief executive, although the two are still separate bodies, with their respective responsibilities and funding.  The organisational structure has been developed to increase joint working. More recently, Hammersmith and Fulham council and PCT leadership teams have also started to work jointly under one management structure in a similar vein.

At present a number of London Boroughs led by Barking and Dagenham, as well as Powys County Council, are all understood to be looking at developing a similar model. So why the renewed interest?

Geoff Alltimes, chief executive of Hammersmith and Fulham’s joint organisation management team, says that it was the logical step given the “shared vision and priorities” of both organisations.  “It makes sense to have a shared leadership team to deliver on these aims,” he argues. “For example, how can the council seriously look at renewing deprived areas without taking into account the health needs of our residents?  Improving the life chances of our residents overall means that we have to look at the complete picture.... we need to ensure that residents have access to quality healthcare, education, housing options and employment.  “Neither the PCT nor the council can deliver that on its own. That’s why it makes perfect sense to have one leadership team to deliver on that bigger picture.”

The two organisations have since brought together a number of services which are managed and delivered jointly, including the commissioning of children’s services, the human resources and payroll teams, and emergency planning. From a legal perspective, joint working can have its challenges. Alltimes explains that in Hammersmith and Fulham, the council and PCT are still two independent organisations with parallel governance arrangements.

“They remain legally constituted as before, with minor changes to their constitutions to allow for a joint chief executive,” he says. “The main impact is on operational management and covers issues such as delegation of powers, managing people and finance, most of which we believe we have overcome through the framework we are putting in place.”

One reason it has become more attractive for local authorities and PCTs to form closer links is that it could provide more resilience against current and financial difficulties. Fiona Taylor, acting legal partner for safeguarding and partnerships at Barking and Dagenham, says that future public spending will be dominated by tighter controls over resources and the focus will be on localism and shared services.

“This is one of the key drivers for the renewed interest in closer links between local authorities and PCTs,” she suggests. “The rationale for joint provision is clear, cutting costs by merging senior posts within both organisations, directing resources in line with community priorities and sharing expertise in key back office functions.”

However, Fiona Taylor adds that in order for a merger to be successful, training staff on liabilities and conflicts of interests is essential. “Many of the conflicts will surround the issue of finance. For example, if a local authority chief executive also sits as the PCT chief executive and has to make difficult decisions about funding regimes that overlap between social care or the NHS, clear protocols and governance arrangements need to be in place to deal with conflicts and withdrawing from a debate.” Taylor says a joint strong internal audit team is also necessary to advise on such issues.

David Lock, head of the public law team at Birmingham’s No5 Chambers, thinks that merging organisations and management teams can provide real opportunities.

“By and large, the NHS is accountable upwards and government provide the funding, whereas local authorities are accountable downwards to their local communities, so there is a conflict of national targets versus local targets which has to be managed,” he points out. “But this is a great opportunity because it means aligning health services with local needs and local authorities with national targets. Both local authorities and primary care trusts have a statutory duty to co-operate with each other, they are not stand-alone organisations, but merging the management teams enormously assists that obligation to work closely together.”

Lock, however, cautions that there can be some dangers and cause for concern in merging organisations.

“Firstly, by and large the NHS is free at the point of use whereas local authority benefits are means tested. Because of this, in delivering services across the health and social services divide, local authorities need to be very careful about which charges apply. Under Section 75, pooled budgets can be used, but there are no exemptions regarding people who ought to contribute. I understand the attraction in wanting to merge boards – because of the duty of cooperation and the aligning of services – but at an operational level it can be impossible to ask a single member of staff to deliver a means-tested and non means-tested service. It is a recipe for chaos,’ he warns.

Susie Rogers, a partner at health service specialist law firm Capsticks, agrees.  “Things need to be transparent when local authorities and PCTs form closer working relationships,” she says. “Getting the right documentation in place will allow councils to continue to charge for services and for NHS services to be free.”

Rogers also warns that both organisations need to make sure that they look closely at their key performance indicators in terms of service delivery, to make sure that the right standards are in place across the different services provided by both organisations.

“Ultimately local authorities and PCTs which merge need to focus on why they are doing it, they need to focus on the results and outcomes for their local population,” she says.

Helen Mooney is a freelance journalist.