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                                                                                                      Cluster Board meeting 2 May 2012
                                                                                                                Agenda item number 7.1.2

                      2nd May 2012

Report Title:        Cluster Governance in Transition                                                                        Item No: 7.1.2

1.   Background and context
     The purpose of this report is to examine some of the governance challenges the
     Cluster will face in 2012/13 as new organisations emerge through the transition
     process whilst the PCTs retain statutory accountability until 31st March 2013. The
     paper will also propose some possible models of operation for consideration and

2.   Matters for consideration
     2.1     The Governance challenges
     The challenges for the Cluster centre around the need to facilitate and empower the
     development of organisations necessary to deliver the vision of “Liberating the NHS”
     whilst retaining the levels of assurance required of statutorily accountable bodies up
     to the end of March 2013. The diagram below illustrates the transition.

            Cluster establishment as                                                               31s t March 2013
            operating model for                                                                    PCTs demise – end
            statutor y PCTs                                                                        of statutor y authority

                                                           Accountability retained

                                                              a   ns
                                Cluster                             itio
                                                                           np               CCGs

                                                           Responsibility transfers

                                                                           CCGs are               1s t April 2014 CCGs
                                       CCGs become sub                     authorised for         & NCB become
                                       committees of the                   shadow
                                       Cluster Board                                              statutor y
                                                                           operation              commissioning

     Some of the key challenges identified are:
         The transition of CCGs from sub committees of the Cluster Board to
           authorised bodies later in 2012 but without statutory powers until 2013.
         The establishment of Greater East Midlands Commissioning Support
           Organisation – on the pathway to corporate status within the National
           Commissioning Board, but whose staff will largely be employed by and work
           within, the PCTs.
                                                        Cluster Board meeting 2 May 2012
                                                                  Agenda item number 7.1.2

         The establishment of the local offices of the National Commissioning Board
          with leadership that may well coincide in whole or in part with Cluster
         Maintaining statutory accountability with PCTs through this period and until
          the final signing off of accounts which will occur after the demise of the
         The divesting of parts of the organisations and associated due diligence with
          transfer of staff and assets to NHS Property Services and of public health
          staff to Derby City Council and Derbyshire County Council.

2.2       Fixed Points
         The PCTs will remain statutorily accountable until 31st March 2013
         It is likely the both the CSO and NCB will begin to recruit senior leaders in the
          2nd quarter of 2012/13
         It is likely that the pool of staff will not increase, leading to a tension in
          delivering both the development of new organisations and the assurances
          required by the Cluster
         Most staff, wherever they work and through whichever successor bodies they
          may work, will remain PCT employees until 31st March 2013
         Delivering post year end duties relating to the PCTs’ statutory responsibilities
          (eg signing of annual accounts)

2.3       Some principles
         Aim to empower the new organisations and facilitate the transfer of
          responsibility for delivery wherever possible
         Retain appropriate levels of assurance necessary to demonstrate the PCTs’
          accountabilities. Ensure that those levels are reflected in successor body
          systems to minimise double reporting burdens
         Obtain audit oversight into agreed models of 2012/13 governance processes
          as independent assurance

2.4    Possible models to consider
Cluster Board
Co-opting CCG and Local Authority representatives onto the Cluster Board (a non
statutory entity) to provide a clearer line of sight between the CCGs and allow the
experience of wider governance matters relating to statutory responsibilities.
Strengthen further the Cluster Board Assurance Framework to include delivery of
the Derbyshire System Integrated Plan and transition objectives relating to the
current operating environment. Link this with assurance of CCG BAFs for their
developing Governing Bodies.

Governance Committee - Up to September 2012 (or such point that CCGs are
Refocus the Governance Committee (through co-creation of agendas with CCGs
and concentrating main items on themed matters relating to CCG authorisation) with
the aim of adding value to the development of CCG governance processes whilst
retaining the assurance mechanisms of the Cluster in as lean a manner as is
consistent with good governance. Possibly streamline membership of the
Map the transition of statutory reporting requirements such as Information
Governance, Health and Safety, Equality Delivery System into the new
commissioning organisations.
                                                             Cluster Board meeting 2 May 2012
                                                                       Agenda item number 7.1.2

                                - after authorisation
     Shadow CCGs to review their governance arrangements during their shadow period
     of operation and agree with the Cluster arrangements for the remainder of 2012/13.
     The models in this period may vary dependent upon any qualifications placed upon
     each CCG’s authorisation. If conditions are limited (and the Board membership
     model were adopted) it could be possible to remove the Governance Committee.

     Audit Committee(s)          – Up to September 2012 (or such point that CCGs are
     Invite CCG CFOs and lay members with responsibility for audit to attend the joint
     meeting of the PCTs’ Audit Committees to facilitate the development of skills and
     experience of the operation of an audit committee.
     Develop, with CCGs, options around the possible operation of “shadow” audit
     committees during the authorisation process and beyond.
                                 - after authorisation
     As for Governance Committee arrangements, except that PCT Audit Committees
     remain statutory obligations and essential mechanisms for control and delivery of

     Commissioning Support Organisation
     Put in place interim governance arrangements for the CSO for its shadow
     establishment period (likely to be similar to the current model of operation of the
     Specialised Commissioning arrangements as a sub committee of each of the
     statutory boards in Greater East Midlands).
     Regularly receive minutes, delegate authority to act to a Cluster lead.

     Capacity to deliver
     Establish a formal duality of responsibility for any senior staff appointed to the
     nascent National Commissioning Board local offices.
     Maintain the regular reviews of risk associated with management capacity through
     Executive scrutiny, Governance Committee and Board and linking to the Futures
     2013 programme.

3.   Assessing Equality Impact
     The stocktake of current governance processes and potential alterations in
     arrangements aims to facilitate the development of new commissioning
     arrangements demanded by Liberating the NHS plans. In turn these models will
     facilitate delivery of the EDS outcomes
              Better health outcomes for all:
              Improved patient access and experience:
              Empowered, engaged and well-supported staff
              Inclusive leadership at all levels:

4.   Actions and recommendations
     The Cluster Board is asked to
         Consider and comment on the models outlined in section 2,
         suggest any alternative or additional matters for implementation and
         agree changes for immediate implementation

Name:          Georgina McLennan, Associate Director of Corporate Governance
Sponsor:       Mark Todd, Cluster Chair
Date:          10th April 2012
Cluster Board meeting 2 May 2012
          Agenda item number 7.1.2

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