Thursday 18th June 2026
(2 weeks ago)
Public Bill CommitteesHealth Bill 2026-27 View all Health Bill 2026-27 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 June 2026 - (18 Jun 2026)
The Minister for Secondary Care (Karin Smyth)
Clause 1 formally abolishes NHS England as a statutory body, which is one of the key aims of the Bill. The current structure, with its two centres, has led to layers of unnecessary bureaucracy, duplication and unclear lines of accountability, and has come with significant cost, with the centre growing significantly in size since 2013. Through the Bill, we are simplifying the organisational landscape of the NHS and removing unnecessary complexity and overlapping roles among NHS England and the Department of Health and Social Care. The reform will enable leaders and staff to focus on delivering care, rather than on navigating bureaucratic hurdles. Importantly, it will also restore Ministers’ central role in national oversight and setting strategy, which the public rightly expect as part of a democratic system. The creation of an arm’s length body of this size was a mistake, and we seek to rectify it.
Clause 2 is integral to the orderly abolition of NHS England. It empowers the Secretary of State to establish transfer schemes, which will provide a structured and transparent means of moving property, rights and liabilities from NHS England to the Department of Health and Social Care, the integrated care boards and other relevant bodies. This robust legal mechanism is required to ensure a responsible transfer of NHS England’s assets and staff. It ensures that all necessary legal powers and permissions for the transfer are in place, preventing uncertainty or loose ends for staff, patients, service users and partner organisations as NHS England is abolished. The clause allows provisions to be made similar to those under TUPE to ensure the protection of employment rights for staff who are transferred from NHS England. In addition, the clause allows for the shared ownership or use of property, ensuring that assets can be distributed and used in a way that supports service continuity for patients and the broader health system.
Clause 3, at its core, provides a power for His Majesty’s Treasury to ensure through regulations that transfers from NHSE to the DHSC, ICBs and other bodies are delivered smoothly and on a tax-neutral basis. In particular, it allows HM Treasury to make adjustments to how existing tax legislation applies to transfers of NHS England’s property, staff and liabilities in a scheme made under clause 2. That will ensure that no tax charges arise, and that neither NHS England nor the transferee organisations end up with a different tax position due to the organisational changes. Importantly, the scope of the power is tightly constrained: it applies only to specified existing taxes and only for the purpose of ensuring tax neutrality in relation to transfers made under clause 2. Without the power, there would be a risk that transfers could trigger unintended tax liabilities that would divert public money away from frontline services and undermine the policy intent of the legislation. Clause 3 therefore protects value for money and ensures that organisational change does not come with avoidable fiscal costs.
Without the changes made by clauses 1 to 3 we will not be able to meet the ambitions set out in the 10-year health plan. The abolition of NHS England, delivered in an orderly, proportionate and considered way that safeguards the interests of staff and taxpayers, is a necessary precondition for an NHS that is more effective for patients, delivers better outcomes across the country and achieves the ambitions that the public expect of us. I therefore commend the clauses to the Committee.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
It is a pleasure to serve under your chairmanship, Sir Jeremy. First, I declare a number of interests. I am a consultant paediatrician working in the NHS, a member of the British Medical Association and a member of the Royal College of Paediatrics and Child Health. Like the Minister for Secondary Care, I got into politics after working in the health service. I am sure she agrees that what you see when working in the health service stays with you when working in the House, and that it benefits the House to have people who have done all different jobs working here.
The NHS constitution says that health services should
“improve, prevent, diagnose and treat both physical and mental health problems with equal regard”,
yet in my work as a doctor—and I worked across several hospitals during my training—the gap between the vision of what should be delivered and the reality of what is being delivered has become apparent to me. The answer frequently given seems to be top-down reorganisation. As I will talk about in a minute, such top-down reorganisation has been done so many times but does not seem necessarily to have delivered in practice what it promised. Indeed, to an extent, we seem to be changing things from how they were to how they are to how they were, backwards and forwards. This Government have decided, in pursuit of better outcomes and cost savings, once again to reorganise the health service, and they seek to do so with this Bill and particularly clause 1.
Clause 1 formally abolishes NHS England. The clause may have very few words, but they represent one of the biggest changes to our health service in decades. Abolishing NHS England is not just a decision about organisational structure or trimming bureaucracy, but a break with the direction of travel the health service has been on since its inception.
Prior to the creation of the NHS in 1948, health services were fragmented: some people used contributory workplace schemes, people who could afford it paid out of pocket, and everyone else relied on very limited state and voluntary provision or went without. In the aftermath of the second world war, the national health service created a state monopoly provider. The Minister of Health had a duty to provide a comprehensive health service free for all at the point of use and a bureaucracy was created to manage it.
There was a tripartite split between hospital services, local authority services and independent practitioner services. The hospitals provided secondary care for those with serious disease and those requiring emergency response. The NHS also took over many cottage hospitals in rural areas that had previously been run by GPs, and larger hospitals that used to be run by local authorities and the voluntary sector. At that time, hospital staff were managed by hospital management committees appointed by regional hospital boards. Those boards implemented Government policies and oversaw the budget. Meanwhile, teaching hospitals kept more independence, directed by their own boards of governors.
Councils, operating as local health authorities, had a duty to provide several personal health services including health centres, maternity care, home nursing, immunisation and ambulance services—some of those are now provided by NHS England. They also had substantial powers to prevent illness and to care for the disabled. Independent practitioners—GPs, dentists, pharmacists and opticians— delivered services to local communities under contract from the health service. Now they deliver under contract from NHS England and the ICBs.
The health service underwent significant reorganisation in 1974, not long before I was born. The main objective at that time was to create a unified, integrated system. Community health services previously operated by councils moved into NHS control. These functions were put under the control of new area health authorities, which took control of most NHS hospitals. Some larger area health authorities had their own distinct management teams, which managed services on the ground—we can look at the current process and ask how it is similar and how it is different. The majority of teaching hospitals lost independent governance, in the way that we, too, are seeing that go back and forth. Above the new area health authorities sat regional health authorities, which were responsible for planning and allocating financial resources. Their members were appointed by the Secretary of State.
In the 1980s, Ministers recognised that the system had become very bureaucratic—perhaps similarly to today—and in 1982, area health authorities and district management committees were scrapped in favour of new district health authorities, with the aim of reducing what was in effect a three-layer structure to two layers. The thinking was that the new district health authorities would be closer to local populations, but primary care was left mostly unchanged. Once again, there are parallels with what is happening now.
From its inception to the end of the 1980s, the NHS had gone through several waves of rationalisation, but the model remained that of a centrally planned public service. However, during that time, there was an intellectual change—the concept of choice. Previously, people had been happy just to get a health service, which they had not had access to before, but that changed and people wanted choice. We now see the benefits of giving patients choice, and we will hear about how the Government’s changes through the Bill will apparently improve patient choice.
Of course, individuals have different values and preferences and live their lives in different ways, which makes it impossible for there to be a single public interest for the Government to pursue. Against that backdrop, the new public management approach to Government administration emerged, advocating for the introduction of market mechanisms and performance metrics—we have heard about the targets that NHS England follows—in public institutions. In theory, if elements of the state could operate more like the private sector, perhaps Ministers could achieve both cost savings and better outcomes.
In 1991 the Government introduced market logic into the health service. They created an internal market by splitting the purchasers—mainly, at that time, the district health authorities—from the providers, which were the hospitals. The Secretary of State gained the power to create NHS trusts—hospitals with the freedom to acquire, hold and dispose of assets; make bids for capital directly to the NHS management executive, in the way they might for NHS England; borrow money within limits; develop their own management structure; and employ their own staff with their own terms of employment. Within three years, almost all providers had become trusts. GP fundholding was established, enabling larger practices to receive budgets to buy secondary care on behalf of their patients, but that was short lived and was shelved in 1999.
When new Labour came to power in the late ’90s, one might have thought that things might swing back the other way, but in some respects the trajectory was similar. Initially, the Labour Government talked critically about the internal market. In 1998 the then Health Secretary told Members that the Government were
“sweeping away the internal market”—[Official Report, 1 July 1998; Vol. 315, c. 314.]
and the NHS plan published in 2000 claimed that
“the internal market introduced competition but failed to bring improvements.”
However, the policy choices of that Government furthered, rather than dismantled, the marketised aspects of the health service. They were saying one thing but, to some extent, doing another. There are similarities with this Bill: we have talked about decentralising power but, as we heard in evidence on Tuesday, many people feel it is more of a centralising Bill than a decentralising Bill.
It was clear that the new public management approach had been adopted across the political divide. The NHS plan promised patients more choice about how to access the NHS—a good thing. It promised a system of inspection, accountability and far greater local autonomy. It said:
“For the first time the NHS and the private sector will work more closely together not just to build new hospitals but to provide NHS patients with the operations they need.”
When GP fundholding went, the Government introduced primary care groups, which meant that GPs, nurses and other staff came together to commission for local populations. Those groups then evolved into primary care trusts, which by 2002 were responsible for spending 80% of the annual NHS budget—a budget that is now distributed by NHS England.
Karin Smyth
This is an interesting point, and it is always helpful to have one’s comments put back to one. I am happy to come back to this again. I ask my question again: do the Opposition oppose the abolition of NHS England? I do not think the Opposition oppose the abolition; they think it is the right thing to do. I appreciate that that was confirmed on Second Reading. As I have said before, the previous Government had the opportunity to do this in 2022 and chose not to. The fact that it has not been opposed suggests that it is the right thing to do.
As for what we found on coming into Government, we thought that delivering on our manifesto through the existing powers, flow of funds and priorities would be possible. We were clear that we did not seek this as an initial outcome, but having got into that position, we immediately found, even while developing the 10-year plan and bringing together one team, that it was not possible. I am afraid that the line through which ministerial intentions could be delivered was convoluted, and obstructed by various measures throughout the system. That independence—
The Chair
Yes, that was the point I was about to make. I know the Minister is trying to help and answer the point that was raised. As she knows, she has another opportunity to speak at the end of the debate. If she wants to briefly summarise the point now and then come back to it in more detail, she is more than welcome.