Reimagining governance

Within a more devolved operating model, the legislation and policy on IHO governance should remain permissive, setting broad national principles rather than prescribing specific board or committee structures and processes. Decisions about governance arrangements should be rooted in a deep understanding of local system context, including existing partnership structures and population needs. They should also be treated iteratively based on continuous evaluation and review. 

Integrated governance structures

Healthcare leaders believe the provider body overseeing an IHO should include a diverse mix of individuals with varied sectoral backgrounds, skills and expertise. As one acute leader told us: “It would be very difficult to achieve vertical integration without bringing the many partners across the system under one governance banner.” Without such a structure, progress would rely too heavily on individual relationships and good will.

The simplest way of achieving this may be to embed system partners within the host provider’s existing governance structures, for example by appointing representatives directly to the FT’s board. This would be similar to the outgoing ICB ‘partner member’ model. However, some leaders feel it may be necessary for the FT board to delegate responsibility for the IHO to a sub-committee or sub-committees given the responsibility for the IHO will sit alongside the FT’s existing duties to deliver high-quality, safe care – which already represents a significant undertaking. Both options would likely expand an FT’s board and/or committee structures, which may create challenges in meeting the requirement for all NHS trusts to reduce corporate growth costs by 50 per cent. 

Alternatively, in areas where a more neutral decision-making platform is preferred, a joint committee could be established between the IHO contract holder and partner providers. This would formally sit outside of the FT but report in through the host providers’ board and committee structures. 

In all the options presented, the FT board retains ultimate accountability and must be equipped to provide strong organisational leadership and effective oversight.

Some healthcare leaders proposed a model where the FT acts mainly as the legal host for the IHO contract and funding, with governance led by a separate body with its own legal status and delegated powers. In areas with established large-scale primary care, this could resemble a joint venture or alliance, as seen in Surrey, Herefordshire, and Berkshire. ⁷  

While this model could further separate population health responsibilities from operational pressures, we have reservations about its practical implementation. Placing governance outside the host provider may introduce complex contractual and accountability arrangements. Nonetheless, these models will continue to play a key role in supporting the collaborative partnerships that underpin contractual arrangements (explored further in section 2.2).

Hallmarks of good IHO governance

Although the specific structures adopted will vary locally, leaders from trusts, primary care and ICBs proposed a set of common characteristics of effective IHO governance:

• A robust mechanism for shared decision-making that includes representation from across the health and care system, including at-scale primary care, VCSE organisations and local government (eg. directors of public health).
• Relevant expertise within the governance structures, including in commissioning, population health management and health inequalities, outcomes-based contract management, delivering the left shift and driving system efficiencies.
• A clear mechanism to support collective problem solving and resolve disagreements, with safeguards to protects the interests of smaller system partners.
• Transparent and meaningful local accountability mechanisms that can replace the role of councils of governors, which the 10YHP announced would be removed
• Independent accountability arrangements to identify and manage potential conflicts of interest in commissioning decisions

When designing new governance arrangements to hold an IHO contract, local leaders should consider these criteria alongside wider guidance on good governance. Detailed advice has been provided by NHS Providers. 

The sequencing challenge

Robust governance is an essential prerequisite before awarding an IHO contract, given the scale of the risk and complexity involved. As we have described, governance arrangements should be guided by national principles but locally determined, reflecting system configuration, population needs and the contractual relationships underpinning the IHO. This raises an important question: should governance arrangements be established before designating an IHO host provider and determining the contractual form, or vice versa? 

Healthcare leaders consistently told us that form should follow function. In practice, this means starting with a clear definition of the IHO’s purpose, followed by its core functions and success measures. Only then should the contractual form be agreed, with the final governance arrangements put in place before the contract takes effect. 

However, some form of shared decision-making mechanism will need to exist earlier to ensure that system partners can agree the IHO’s functions and contractual form. Host providers will need to demonstrate that they have, or will be able to implement, suitable governance arrangements to take on the responsibilities described. Healthcare leaders emphasised that initial IHO designation should be based on collaborative leadership capability (see chapter 4), with some concern about how to assess which FTs are best placed to take this forward in a transparent, evidence-based way before formal governance is established.

See chapter 4 for our recommendations to DHSC and NHSE on the wider IHO authorisation process. Given the political pressures to move at pace, we expect a more pragmatic approach to be adopted for the first wave of IHOs.