There’s a problem with ring fencing…

Putting a fence around a pile of money and saying “no-one is allowed to climb the fence to get to the money” is no good if the same people who built the fence also tell the people outside it how to climb over to get to the money.

The relationship between national organisations and their local means of delivery always involves a lot of bouncing back and forth. What does the national organisation see as the necessity of their ‘national policy’ vs the reality of its delivery taking place and being led by local leaders. This isn’t just an NHS problem. I am old enough to remember the arguments for a national education curriculum and the fear that this would take away the autonomy that teachers needed to, for example, get across the finer geographical points of how different lakes are created.

Surely if a national curriculum restricted the ability of a teacher to run their own classroom it would destroy learning?  On the other hand, if we couldn’t depend upon everyone being told about the role glaciers have in lake formation what was the point of the national curriculum? (I had a very good geography teacher).

This one worked out OK (Although there has been some fraught debate about what should or should not define the ‘national’).

The problem is England is a big enough country for the national to be remote from local delivery. We have to recognise that we must have a constant debate how this actually works.

This is most obviously true of the NHS. The N at the start of the logo is not an abstract. It matters to the public. It’s paid for out of national taxation and the expectation is that the principle of equal access for all free at the point of need is a national one.

But as we all know the million consultations that take place every day do not all take place in Whitehall. They are distributed all over the country and each one cannot be run from Whitehall.

There is no way out of this national/local tension. It is there every day and can’t be wished away.

One of the ways in which this tension is dealt with is through ring fencing.

To take an example from local government.  Readers will know that since the Lansley reforms local public health interventions have been delivered through local government. The money spent on this is its “main and primary purpose”  Over the last decade public health directors have voiced many complaints about the amount of the grant, but the ring fence has been recognised by local government.

Whilst local government not only has a very wide range of functions and has a local democratic mandate – which is its overriding rationale, it recognises the right of central government to tell it that particular pots of money should be used for dealing with specific issues. The fence around the money works. (Helped by the fact that it’s backed by law)

But it doesn’t in the NHS, and there have been some recent important discussions about the fact that perhaps it not only doesn’t but perhaps shouldn’t.

This blog reported recently on the idea of the NHS ring-fencing money for certain activities. On Feb 7th the Government issued its policy on dentistry and argued that the money for dentistry to back up the new policy would be inside a ‘firmer ring fence in 2024 and 2025 so ICBs can seek to improve dentistry with this budget”

The previous ring-fenced resource for dentistry had not only been used for other spend by people who climbed the fence, found the money and spent it on something else, but even more oddly in some ICBs at the end of the year some of the money was inside the fence and unspent – even for dentistry.

Back in Feb I was very sceptical of the idea a firmer ring fence as meaning anything very much.

And there are other larger examples,

      • Has the designated annual budget for capital expenditure had a ring fence around it?
      • When the Department wanted to spend the money on deficits – no fence stopped them.
      • Has the designated annual budget for technology had a ‘firmer ‘ring fence around it?

So national NHS money is surrounded by a fence until someone, usually someone who designated that the fence was important in the first place, suggests that it can be climbed over, and the money taken for something else.

Hmm.. in constructing the relationship between national and local in the NHS it looks to me that we need to examine new ways of making it work.

And by good fortune one of the national directors who depends upon this relationship working has been talking about this recently

Prof Bola Owolobi, director of the NHSEs health inequalities has suggested an answer to that question. Given her responsibility for leading on inequalities, her experience on this matters a lot to the very future of how the NHS as a whole tackles (or does not tackle) inequalities.

She recognises that the idea of ring-fencing monies for reducing inequalities was meant to ensure that money would be available for doing it. Given the expectation that the system has of her to lead in this area, her experience and judgment on these issues matters.

The area of work that is really important to Bola (and to many others of us) has had its finance ‘protected’ by the idea of a “ring-fence”.

But it hasn’t worked (just as in the other areas I have outlined above).

What is different about Bola’s intervention is that she is calling into question this whole system of management. It’s not just that ring-fencing hasn’t worked. But her point is that even if it did it’s the wrong way to tackle an issue like health inequalities.

In fact, she turns the idea of ring-fencing on its head. Its intent (if not its practice) is for national leaders to tell local leaders. “You are not in charge of deciding what to do with this money – this money has to go (in this example) on reducing inequalities“

Now you would think someone in charge of reducing inequalities would be in favour of restricting the right of local leaders not to do so.

No, she goes in the opposite direction and disagrees with the idea of ring-fencing because its aim is limit the discretion of local leaders.

In her words it was ‘dangerous’ for the NHS to get into a position where local leaders only do something when told.

Her alternative position is that local leaders should “embrace their own agency to act”.

Ring-fencing is an attempt to limit the agency of local NHS leaders. Her argument is that without that agency, without local leaders being seen to be clearly in charge of the decisions that they made, the reality of leadership is degraded.

And because of its size, if local leaders do not have the room to lead, and are simply treated as administrators of national decisions, the NHS won’t really deliver the service necessary.

This is a courageous argument.

She is backed up by work from the NHS Confed published this March. This analysed the way in which integrated care systems received a share of a £200million health inequalities funding pot that was made recurrent by NHS England for 2023/4. Reports have emerged that some systems are using the funding to service their own deficits, or for other purposes.

Bola comments on this, “What the NHS Confederation found in their Mrach 2024 report is that ring-fencing wasn’t the most powerful thing. It was the leadership. It was the CEOs and Chairs who knew what their portion was, were prepared to go to the Board and argue the toss if necessary”

This left her saying that “national ring fencing was unwise”.

This is a very different way of working through the national/local tension.  Here what the national needs to do is make a strong argument for what it wants local leaders to do.  If, as in this case, it wants to reduce inequalities, it needs to develop a persuasive public facing narrative to do just that. It needs to say to local leaders, we think that in Blackpool, Basingstoke and Burnham-on-Crouch, inequalities in health matter for these moral, economic and political reasons. We believe that an NHS founded on the idea that there should be equal access for all free at the point of need will need all local leaders to reduce inequalities. Find out how to do it locally, find you own ways of doing it. But this argument is working to persuade you to do it.

If you only do it because you are told to, you will do it badly. So, let’s have an argument to persuade you.

Only if local leaders believe in it will it really happen. WE need their agency to act.

And they will only believe in it if they are persuaded to, not told to.