Review of section 75 arrangements: supporting document

Question 1

Background

Accepted Answer

The Department for Health and Social Care (DHSC) is committed to facilitating greater integration of health and social care services. We want to encourage system leaders in local areas to use partnership arrangements and pooled budgets more widely, and more flexibly, in ways that will benefit patients. We know that integrated commissioning, along with pooling and aligning budgets, can help reduce fragmentation of services and facilitate more joined-up care that wraps around patients’ individual needs as set out in the government’s white paper Health and social care integration: joining up care for people, places and populations.

Pooled budgets are principally delivered through 2 sets of provisions in the NHS Act 2006. Firstly, the joint working and pooled fund arrangements under sections 65Z5 and 65Z6 (inserted by section 71 of the Health and Care Act 2022). Secondly, the provisions relating to arrangements between NHS bodies and local authorities under section 75, which is the route through which the Better Care Fund (BCF) is delivered. The BCF is one of government’s key levers for integration; 94% of local areas (an area being an integrated care board (ICB) and their partnering local authority’s health and wellbeing boards) agreed that joint working had improved as a result of the BCF in 2021 to 2022. However, we know from system leaders that arrangements to pool budgets can be complex which can hinder more ambitious models of integration. In the integration white paper, we committed to reviewing the legislation covering pooled budgets to consider simplifying and updating the underlying regulations where necessary.

This document sets out:

details of the different current legislative mechanisms for entering into pooled budgets between NHS bodies and local authorities
the key questions we’ll explore as part of this review of section 75 partnership arrangements

Question 2

Legal frameworks for pooled budgets

Accepted Answer

How the section 75 and 65Z5 and 65Z6 legislative powers differ

There are several differences between sections 65Z5 and 65Z6, and section 75 of the NHS Act 2006 which are outlined in annex A (table 1). One key difference is that section 75 allows health-related functions of local authorities to be carried out by NHS bodies, whereas sections 65Z5/6 do not allow for that (figure 1, annex A). Currently, local systems can use these legislative powers as appropriate to deliver local solutions.

Under section 75 arrangements, liability for delegated health-related functions remains with the organisation on which a function was originally conferred, irrespective of who exercises it. Whereas, under section 65Z5/6 arrangements, the division of liability can be determined between the parties to the arrangement.

Section 75 allows combined authorities that have been delegated NHS functions under a section 65Z5 delegation to enter into a section 75 arrangement in relation to those functions, as if they were an NHS body. There is a power (in section 75(7E)) to allow the Secretary of State to apply the regulations more broadly to combined authorities (which would allow them to enter into arrangements in respect of any health-related functions). However, this power has not yet been exercised and authority to do so has been limited to date to combined authorities given specific powers by their individual devolution arrangements.

Section 75 NHS Act 2006

This section enables NHS bodies and local authorities to enter into arrangements which are prescribed in secondary legislation. The NHS Bodies and Local Authorities Partnership Arrangements Regulations 2000, as amended, is the relevant secondary legislation that sets out details of the permitted arrangements as follows:

NHS bodies can carry out local authorities’ health-related functions together with their NHS functions
local authorities can carry out NHS functions together with their local authority health-related functions
NHS bodies and local authorities can establish and run a pooled fund which is made up of contributions by the partners, and out of which payments may be made towards carrying out the functions that are within the scope of the arrangements
such arrangements can only be formed if it is likely to lead to an improvement in the way in which the functions are exercised
any partnership arrangements entered into under section 75 of the NHS Act 2006 do not affect the liability and accountability of NHS bodies or local authorities for the exercise of any of their functions (s.75(5))

Prescribed bodies

The bodies that are currently prescribed NHS bodies are NHS England, ICBs, NHS trusts and foundation trusts.

The bodies which are currently prescribed local authorities are a district council, county council, county borough council, London borough council, common council of the City of London and the Isles of Scilly.

Prescribed arrangements and governance safeguards

Prescribed bodies may enter into partnership arrangements in relation to the exercise of NHS functions and local authority health-related functions (see ‘Prescribed functions’ below for further information) if the partnership arrangements are likely to lead to an improvement in the way in which the functions are exercised. Before doing so, the prescribed bodies must jointly consult any persons affected by the partnership arrangements unless the arrangements:

have been consulted upon as part of the consultation for a proposed designation of an ICB or trust as a care trust
are made further to a direction from NHS England to pool a designated amount into a section 75 arrangement for the purposes of service integration (for example, the Better Care Fund)^{[footnote 1]}

The details of the partnership arrangement must be in writing and specify the agreed aims and outcomes, the payments to be made by the bodies, the functions and services to be carried out, the staff, goods or accommodation to be provided, the duration of the arrangement and provisions for variation or termination, monitoring and data sharing arrangements.

The prescribed bodies may also establish and maintain a pooled fund made up of contributions by the partners.

The prescribed bodies may form a joint committee to take responsibility for the management of the partnership arrangements including monitoring, and receiving reports on, the arrangements.

We understand from engagement with systems and places there may be some uncertainty over the interpretation of the joint committee provisions, which may have resulted in variation in their application. We do not, however, know whether these inconsistencies demonstrate a problem with the drafting of the provisions or alternatively whether they simply demonstrate how local areas interpret the regulations to best suit their needs. It has also been suggested (for example, in the Hewitt Review 2023), that the provisions may have made the use of partnership arrangements under section 75 administratively burdensome, which may be acting as a deterrent to further use of pooled budget arrangements.

Prescribed functions

The regulations specify which health-related ‘functions’ of NHS bodies and local authorities fall within scope of section 75 arrangements. In scope NHS functions include aspects of urgent and emergency care, hospital care, rehabilitation, mental health services, and community health services. Whilst in scope health-related functions of local authorities^{[footnote 2]} include some public health functions, social care functions and related services such as certain housing functions and functions to provide services for people with disabilities.

Functions of NHS bodies that are specifically excluded from section 75 arrangements by secondary legislation.

The regulations also specify some NHS functions and health-related functions that are currently out of scope of section 75 arrangements. These are:

emergency ambulance services - please note: patient transport services are within the scope of section 75 arrangements
general surgery
radiotherapy
termination of pregnancies
endoscopy
use of class 4 laser treatments
any other invasive treatments

The health-related functions which section 75 doesn’t cover and are not excluded by secondary legislation, are:

primary medical care; already in scope but included here for completeness. Primary medical services: (s.83 and s.92) were removed from the section 75 exemptions list in 2015. However, any such functions which are delegated to ICBs either by agreement or via section 13 directions would be a prescribed function and within scope of section 75 arrangements
primary ophthalmic services
primary dental care
pharmaceutical services; essential pharmaceutical services (as defined in section 126) are excluded currently and additional pharmaceutical services (advanced and enhanced services defined under section 127)

Public health services that are not within scope of section 75

Public health services that are currently not within scope of section 75, are:

NHS public health functions under section 75 arrangements: public health functions of NHS bodies delegated under 7A or 7B
local authority health related functions under section 75 arrangements: public health functions of local authorities (delegated under 7A)

Public health services that are within scope of section 75

Public health services that are currently within the scope of section 75, are:

the local authority public health functions under 2B(1)
the Secretary of State’s public health functions under 2B(2) if delegated under 6C to a local authority

Please note that the above 2 functions are identical except that the local authority’s functions relate to a duty of improving the health of the people in its area (2B (1)), whereas the Secretary of State functions are discretionary and broader as they relate to improving the health of the people of England (2B(2)). The only other point of difference is that the local authority functions include being able to provide grants or loans (2B(3)).

the Secretary of State’s public health functions under 2A if delegated under 6C

See table 2a, 2b and 2c in annex A for further detail on the specific public health functions.

Section 65Z5 and 65Z6 of the NHS Act 2006

These powers are similar to, but separate from, the existing section 75 provisions that are between NHS bodies and local authorities, but arrangements made under section 75 can be used in combination with these provisions. This combined approach should not be used to include functions that would otherwise be excluded by section 75 legislation.

Section 65Z5 relates to joint working and delegation arrangements. A relevant body may arrange for any of its functions to be exercised by or jointly with another relevant body, a local authority or a combined authority. A relevant body is defined as NHS England, an ICB, an NHS trust or an NHS foundation trust or any other body as may be prescribed by the Secretary of State.

Arrangements under this section can be made on whatever terms are agreed between the parties. This includes terms as to payment, and terms prohibiting a body from making delegation arrangements for functions exercisable by it under an arrangement made under this provision.

This section allows for much more joined up working within the system, so that functions^{[footnote 3]} of NHS England, ICBs, trusts and foundation trusts could be exercisable by 2 or more other such bodies, local authorities or combined authorities. This allows, for example, joined up working and delegation arrangements between 2 or more ICBs, between NHSE and multiple ICBs, and between ICBs and other parts of the system. It makes it easier for ICBs to commission and arrange services collaboratively with other partners by creating a mechanism for ICBs and other NHS bodies to delegate or jointly exercise functions and pool funds to any other such bodies, local authorities or combined authorities.

NHS England has the power (Section 65Z7 as inserted by the Health and Care Act 2022) to publish statutory guidance to the relevant bodies about the exercise of their powers under sections 65Z5 and 65Z6. NHS England has used these powers to advise ICBs against delegating certain functions, such as governance arrangements and so on, to relevant bodies. In contrast, NHS England does not have the power to publish statutory guidance under section 75. It is worth noting however, that the Secretary of State can issue guidance that extends to consultation or application for consent in respect of prescribed arrangement to NHS England and local authorities.

Where organisations come together to exercise a function under section 65Z5, they can then create a joint committee to exercise the function. They can also arrange for one or more of the organisations, or the joint committee, to create and maintain a pooled fund under section 65Z6. A pooled fund is a fund made up of payments received in line with the arrangements between the parties, out of which payments may be made towards expenditure incurred in exercising the functions under the arrangement.

Question 3

Scope of review

Accepted Answer

In this review of section 75 we want to consider if there are any changes we can make to existing legislation to facilitate the further use of pooled budgets. The additional information on section 65Z5/6 arrangements is included only to help clarify the main purposes and differences between the 2 related regulations. Specifically, we want to seek views on:

whether the scope of section 75 should be widened to include additional health-related functions of local authorities and NHS bodies
whether the scope of section 75 should be widened to include additional public health functions delegated to local authorities and NHS bodies by the Secretary of State
whether we should consider widening the scope of organisations that can enter into arrangements under section 75
any perceived barriers to pooling of budgets, and consider whether, and if so, how the provisions within the regulations could be simplified to facilitate easier use and reduce the administrative burden on NHS bodies and local authorities
how we could strengthen and/or simplify the governance of section 75 arrangements to further support the commissioning of integrated care services

Question 4

Annex A

Accepted Answer

Figure 1 : one of the key differences between section 75 and section 65Z5/6 pooled budget arrangements

Figure 1 shows the same content as written in the ‘How the section 75 and 65Z5 and 65Z6 legislative powers differ’ section of the document. One side of the diagram shows how NHS bodies and local authorities are able to use section 75 arrangements to jointly, or by lead commissioner arrangements, pool funds and resources to deliver integrated health-related services. It gives some examples of types of services that this could cover but is not an exhaustive list. The other side of the diagram shows how NHS bodies (NHS England, NHS ICBs, NHS foundation trusts and NHS trusts) can pool their funds and resources (but not local authority functions - this is one of the main differences between the 2 provisions) and this can be exercised jointly with one or more of the NHS bodies and a local authority or a combined authority.

Table 1: overview of section 75 and sections 65Z5 and 65Z6 of the NHS Act 2006

	Arrangements under section 75	Arrangements under sections 65Z5 and 65Z6
Overview of comparison	Parties can enter into a partnership arrangement, if they agree the arrangement is ‘likely to lead to an improvement in the way in which those functions are exercised.’ Not all commissioning functions are in scope. Time limit on arrangement. Lead commissioner arrangement. Arrangements work effectively between local authorities and NHS bodies.	More flexibility in the wider range of NHS functions that can be included in comparison with section 75 arrangements. Creates a more flexible mechanism for facilitating the increased integration of NHS bodies. It is a joint decision-making forum – in other words, it supports joint exercise of functions, as well as lead organisation arrangements.
Remit	Create an arrangement for the discharge of defined NHS and local authority functions, where this will lead to an improvement in how those functions are exercised (s.75(1)). Functions in scope should be defined at the outset in an agreement. Parties can enter into a partnership, if they agree the arrangement is ‘likely to lead to an improvement in the way in which those functions are exercised.’ Bodies who can enter - at least one NHS England or integrated care board or NHS trusts and/or foundation trusts, together with at least one local authority and/or combined authority.	NHS bodies and local authorities can jointly agree strategies for meeting health and care needs in that area. Any functions of the bodies can form the subject of such arrangements except those functions that are excluded by regulations^{[footnote 4]} or by NHS England’s published guidance. Bodies who can enter – NHS England, NHS trusts, NHS foundation trusts, NHS integrated care boards, local authorities and combined authorities.
Duration	Fixed - the legislation requires a s.75 arrangement to have a fixed duration, can be used for operational purposes for instance, to address short-term care capacity.	Open ended - the legislation does not require that a duration has to be specified in the terms of the arrangement, so they can in theory be open-ended. There may however be various practical, operational and commercial reasons why being specific about the duration of the arrangement would be advisable.
Commissioning or provider models	Lead commissioning arrangement, the partners can agree to delegate commissioning of a service to one lead organisation to be commissioned by it alongside its own service. (s.75(2)(b) and (c)). Pooled funds - the ability for partners each to contribute agreed funds to a single pot, to be spent on agreed projects for designated services delivery and without a boundary between local authority and NHS care. Integrated provision - the partners can join together their staff, resources, and management structures to integrate the provision of a service at a managerial level or all the way down to the frontline functions of staff being integrated.	Functions of relevant bodies can be exercised jointly with, or wholly by one or more of the relevant bodies, local authority or combined authority, allowing the appointing organisations to make a single decision which binds those organisations which are party to the decision covering the delegated functions. Ability to establish and maintain pool funds.
‘Joint committee’ status	Administrative function - Section 75 allows for regulations to provide for joint committees to be formed as an administering arrangement for any pooled fund; this is not intended for the joint exercise of functions, thus it is not a decision forum (s.75(4)). This power has not been used so far.	Decision making forum - 65Z6(2) allows the bodies which have agreed to exercise a function jointly to make binding decisions.
Pooled fund	Permitted (s.75(2)(a)).	Permitted 65Z6
Liability	Borne by the organisation on which a function was initially conferred, irrespective of who exercises it (s.75(5)).	The apportionment of liability can be determined between the parties.
Consultation	The partners may not enter into any partnership arrangements unless they have consulted jointly such persons as appear to them to be affected by such arrangements.	Statutory duties of relevant bodies to consult on service change remain, however, no additional requirements to consult partners or anyone affected by such arrangements.
Examples	Better Care Fund	Relevant bodies could set up a joint committee arrangement under the new s65Z6 so that partners can collectively make delegated commissioning decisions at place level. Integrated care boards will have powers to delegate functions to other integrated care boards and make decisions jointly. This could be across bigger population footprints (that is, covering multiple integrated care boards) or at place-level across their integrated care board footprint; and will enable those integrated care boards with expertise in service of a specialty to take the lead in making arrangements on behalf of other integrated care boards. An NHS organisation (for example, an integrated care board) determines that the best option for arranging services for its population is to delegate authority for securing community services to one of its place-based committees that has local authority members. This could be achieved by a delegation within the integrated care board.

Public health services

Following a description of each function, tables 2a, 2b and 2c set out the various provisions under which the Secretary of State is or is not able to delegate that public health function to NHS bodies or local authorities for the purpose of s75 arrangements.

Secretary of State public health functions under s.2A (protection of public health)

You can read the full section 2A legislation.

Description of rules to protect public health

The Secretary of State must take such steps as the Secretary of State considers appropriate for the purpose of protecting the public in England from disease or other dangers to health, including:

(a) the conduct of research or such other steps as the Secretary of State considers appropriate for advancing knowledge and understanding;

(b) providing microbiological or other technical services (whether in laboratories or otherwise);

(c) providing vaccination, immunisation or screening services;

(d) providing other services or facilities for the prevention, diagnosis or treatment of illness;

(e) providing training;

(f) providing information and advice;

(g) making available the services of any person or any facilities.

(If in scope all the above functions can be delegated, but the Secretary of State can choose which ones to delegate).

Table 2a: under s.2A, what the Secretary of State is or is not able to delegate to NHS bodies or local authorities for the purpose of s75 arrangements

Delegation	NHS functions under s75 arrangements	Local authority functions under s75 arrangements
If delegated by virtue of 7A (by arrangement)	Not in Scope of section 75	Not in scope of section 75
If delegated by virtue of 7B (by direction)	Not in scope of section 75	Not applicable (only relates to NHS bodies)
If delegated by virtue of 6C (by regulation)	Not applicable (6C only relates to local authorities)	In scope of section 75

Secretary of State public health functions under s.2B(2) and (3) (improvement of public health)

You can read the section 2B legislation in full.

Description of rules to improve public health

The Secretary of State may take such steps as the Secretary of State considers appropriate for improving the health of the people of England including:

(a) providing information and advice

(b) providing services or a healthy living (whether by helping individuals to address behaviour that is detrimental to health or in any other way);

(c) providing services or facilities for the prevention, diagnosis or treatment of illness;

(d) providing financial incentives to encourage individuals to adopt healthier lifestyles;

(e) providing assistance (including financial assistance) to help individuals to minimise any risks to health arising from their accommodation or environment;

(f) providing or participating in the provision of training for persons working or seeking to work in the field of health improvement;

(g) making available the services of any person or any facilities.

(If in scope all the above functions can be delegated, but the Secretary of State can choose which ones to delegate.)

Table 2b: under s.2B(2) and (3), what the Secretary of State is or is not able to delegate to NHS bodies or local authorities for the purpose of s75 arrangements

Delegation	NHS functions under s75 arrangements	Local authority functions under s75 arrangements
If delegated by virtue of 7A (by arrangement)	Not in scope of section 75	Not in scope of section 75
If delegated by virtue of 7B (by direction)	Not in scope of section 75	Not applicable (only relates to NHS bodies)
If delegated by virtue of 6C (by regulation)	Not applicable (6C only relates to Local authorities)	In scope of section 75

Local authority public health functions under s.2B(1), (3) and (4)

You can read this legislation in full.

Description of local authority public health rules

Each local authority must take such steps as it considers appropriate for improving the health of the people in its area, including:

(a) providing information and advice

(b) providing services or a healthy living (whether by helping individuals to address behaviour that is detrimental to health or in any other way);

(c) providing services or facilities for the prevention, diagnosis or treatment of illness;

(d) providing financial incentives to encourage individuals to adopt healthier lifestyles;

(e) providing assistance (including financial assistance) to help individuals to minimise any risks to health arising from their accommodation or environment;

(f) providing or participating in the provision of training for persons working or seeking to work in the field of health improvement;

(g) making available the services of any person or any facilities.

It includes the power to provide grants or loans (on such terms as the local authority considers appropriate).

Table 2c: under s.2B(1), (3) and (4), what the Secretary of State is or is not able to delegate to NHS bodies or local authorities for the purpose of s75 arrangements

Delegation	NHS functions under s75 arrangements	Local authority functions under s75 arrangements
No delegation needed (powers conferred directly onto local authorities)	Not applicable	In scope of section 75

Question 5

Questions in the call for evidence

Accepted Answer

Section 1: current section 75 partnership arrangements and impacts

Please answer as many of the questions as possible with specific examples of how any changes may lead to improved care and consider services in relation to both adult and children’s services. The following questions seek your views about the impact of arrangements made under section 75 of the NHS Act 2006.

In your experience, to what extent do you agree or disagree that the use of section 75 arrangements supports closer integration and personalisation of health and care services?

Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree

Please explain your answer and provide specific examples

Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree

Please explain your answer and provide specific examples

In your experience, to what extent do you agree or disagree that the use of section 75 arrangements supports closer integration and personalisation of health and care services?

Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree

Please explain your answer and provide specific examples

In your experience, to what extent do you agree or disagree that section 75 arrangements have led to demonstrable improvements to the health and care services delivered to local communities?

Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree

Please explain your answer and provide specific examples of section 75 arrangements that have led to improvements.

The following questions seek your views about strengthening joint working between health and local authority social care services.

In your experience, are there any barriers that hinder further use of section 75 partnership arrangements for adult and children’s health and social care services in your area?

Yes
No
Not sure