Health Bill (Third sitting)

Caroline Johnson Excerpts

Committee stage
Thursday 18th June 2026 Public Bill Committees

[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.

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[The Chair]

Very well. I call Caroline Johnson.

[Dr Johnson]

Thank you, Sir Jeremy. I will be grateful if the Minister clarifies at the end, because she seems to be suggesting that Lord Darzi’s report was wrong in some way. He was assessing the NHS at the same time that she was, with the experience of having been a Minister, and made the counter-suggestion.

It is not just about what one does; it is about how one goes about it. As we heard on Tuesday, there is in general a plan of what is going to happen, but so many decisions have not been made yet in relation to this. In particular, one of the witnesses from the union talked about how unsettling that was for staff and how difficult it is for staff to be asked to go from the current location to a destination unknown. It is very difficult to make transformation in a direction when it is not clear where one wants to be.

In March 2025, the Government announced that NHSE would be abolished. The largest healthcare union described the handling of the announcement as “shambolic”, coming only days after the announcement of a 50% cut to staffing levels at the centre. In the days and months since, Ministers have provided only some clarity about what they are trying to achieve. According to the Government, the restructure will cut red tape, save money, devolve power and improve accountability, all with a view to improving patient outcomes. Those are not new objectives; they are the same objectives that underpinned the creation of NHS England. How is it that the same objectives require dismantling the institution created to deliver them? Again, I just do not understand what has changed the Government’s mind.

Let us look at cutting red tape. As a Conservative, I welcome the ambition to make the health service more efficient. My constituents do not want to pay for staff in the Minister’s Department duplicating the work of those in NHS England, particularly when thousands every day are subjected to care that could certainly be improved. On Tuesday, we heard from the former Health Secretary, my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt), that

“the bureaucracy has got completely out of hand.”––[Official Report, Health Public Bill Committee, 16 June 2026; c. 33, Q58.]

However, that bureaucracy is not confined to NHS England and any medical practitioner will explain that bureaucracy exists across the entire health system. Can the Minister explain how the changes will improve that?

Lord Darzi’s independent investigation said that, taken together, there are nearly 80 people employed in regulatory and headquarters functions for each NHS provider trust. Can the Minister say how many people will be in such roles once the abolition of NHS England is complete? Can she talk about how abolishing NHS England will review the volume of paperwork on patient safety, some of which is helpful for patient safety and some of which is not. That was identified by Dr Dash in her report.

I remind Members that abolishing NHS England is not a prerequisite of undertaking a robust cost-benefit analysis before introducing changes. We have had difficulty in getting answers on numbers. We have been told that this will save money—£1 billion a year, I believe—but no sums have been produced for us to scrutinise to explain where that will come from. Indeed, when asking questions about where it might come from, it has been quite difficult to establish that. We have heard that the redundancy package will be worth £1.1 billion to £1.3 billion. It does not seem clear exactly where that will come from or how it will benefit patients. It is also not clear how many of those staff will end up re-employed by the new organisation, having received redundancy from the first, and what effect that will have on the country’s finances.

More than a year on from the Government’s announcement that they will abolish NHS England, how much progress have Ministers made? In March 2025, Lord Scriven tabled a question about the legislation required to abolish NHS England. In her response, the Health Minister in the other place, Baroness Merron, wrote:

“Ministers and senior Department officials will work with the new transformation team at the top of NHS England, led by Sir Jim Mackey, to determine the structure and requirements needed to support the creation of a new centre for health and care.”

One year later, in March 2026, the Liberal Democrat health spokeswoman, the hon. Member for North Shropshire, tabled a question asking what functions had been transferred over since the announcement was made. In response, the Minister for Secondary Care wrote:

“Work is progressing at pace to develop the design and operating model for the new integrated organisation, and to plan for the smooth transfer of people, functions, and responsibilities.”

One does not need to enlist the services of Hercule Poirot to see that, one year later, that work has not been done. The Government have no comprehensive plan for how they will abolish NHS England. They can write a line in the Bill to abolish it, but how that will happen, to which clauses 2 and 3 relate, is, as yet, really uncertain.

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While I welcome the aims and what the Minister has said, I caution against excessive optimism in this place that simply doing away with NHS England will naturally give rise to savings and reduce doubling up of jobs and slightly unfathomable decision making. I will also take this opportunity to say that some of the institutions and frameworks that will continue, such as ICBs, are being subjected to cuts while being asked to take on more responsibility. I do not agree with some of those responsibilities being shifted, such as merging Healthwatch and the patient voice, but that will come up later in the debate on this Bill, so I will not say more on it at this time.

[Dr Johnson]

My hon. Friend talked about how the ICBs have merged. There are lots of different types of reorganisation going on at once: the abolition of NHS England, the changes to local authorities, the introduction of mayors in some areas, and the changes and cuts to ICBs. What effect is that having in his part of the country?

[Joe Robertson]

The shadow Minister points to a much wider issue entirely relevant to the Government’s plans here: the more reorganisation we do, the more we shrink the bandwidth to deal with smaller and more operational problems because so much of the resource has been pulled in. In my area, although it is probably true everywhere, reorganisation of Department or Government responsibilities causes endless frustration that while Governments and politicians—I take some responsibility for my own side’s actions at times in the past in very limited ways—talk about reorganisation when so much can be done on what might be termed low-hanging fruit.

I worry that the Government are missing out on opportunities here to make a much more meaningful difference day to day and much more quickly than this huge reorganisation will achieve. Everything is about priorities. Plainly, no Government can do everything they want to do all at one time. It slightly surprises me that reorganisation of the NHS and doing away with NHS England has become such a major priority, considering it did not feature in the Labour party manifesto just two years ago. I do not seek to put words in the Minister’s mouth, but the gist of her evidence to this Committee was that within eight months of this Labour Government coming into power, they realised that NHS England had to go. Eight months is eight months, but it seems a short timeframe in which to decide to do away with a fundamental way that health is organised and delivered in this country.

Going back to priorities, I recall that before the election, the former Secretary of State for Health and Social Care—then the shadow Secretary of State—the right hon. Member for Ilford North, talked about introducing a national care service. That was the Labour party’s big priority. Although Conservative Members and, frankly, the majority of the public were slightly sceptical of his intentions, we all agree that social care needs reform and that ultimately, the success of the NHS will be delivered only if we deal with the long-standing crisis in social care, which extends back three decades or more, as it is entirely dependent on that.

Before the election, the priority was the national care service, but since the not-so-random date of 5 July 2024, when the right hon. Gentleman became the Secretary of State, he ceased to refer to reform of social care, and it seems once again to have been put on the back burner. I wonder whether the Government’s plan to abolish NHS England has gotten in the way of equally large, and perhaps even more substantial, reforms, which might ultimately have made a much more meaningful difference to the delivery of not only healthcare but health and social care, as well as to the overall wellbeing, including financial wellbeing, of so many people in this country. Social care refers to people living with frailty or dementia, and the family carers, and families more widely, on whom that has an impact. Every decision made is a decision not made, given the resource and bandwidth of those whom any Government ask to implement change, such as the civil service, advisers and the hundreds or thousands of people who are relied on to deliver in their day-to-day job.

I and, it seems, all the other Committee members do not disagree with the fundamentals of what Government are trying to do; their reasons for doing this are broadly sensible, so who could disagree? However, because of the manner in which it is being done, I urge caution and a check on being too optimistic—just doing it and expecting all the good things to flow. It will take an awful lot more than simply passing the Bill to make the NHS the success that, to take the Minister at her word, she intends, wants and will do her best to achieve.

Ordered, That the debate be now adjourned.—(Emma Foody.)