230.This section allows the NHS and local authorities to work together in new ways by enabling them to pool their resources, delegate functions and resources from one party to another and enable a single provider to provide both health and local authority services.
231.The discussion documents Partnership in Action and Partnership for Improvement set out the Government’s intentions regarding these new operational flexibilities. Broadly, they remove some of the legal barriers to joint working which exist at the moment. The measures set out in this section are intended to allow health and local authorities to agree jointly who is best placed to carry out their functions and how resources might be used more efficiently. These proposals have been developed in greatest depth as regards the interface between health and social care, as the discussion documents made clear. However, the Government believes the potential for cross-boundary working extends beyond this. Accordingly, section 31 creates scope to bring these new flexibilities into play across any point on the interface between NHS functions and local authority functions that are health-related.
232.Section 31 removes some of these barriers by allowing:
	authorities to pool resources so that the resources lose their health and local authority identity; and allowing staff from either agency to develop packages of care suited to particular individuals irrespective of whether health or local authority money is used;
	Health Authorities or Primary Care Trust and local authority departments to delegate functions to one another. In the case of health and social care, this will allow, for example, one of the partner bodies to commission all mental health or learning disability services locally. It is expected that this will also reduce the costs associated with having two authorities commissioning services for the same group of people;
	the provision of health and local authority services (for example, at the health and social services boundary, support involving both domiciliary and community nursing care) from a single managed provider. Currently it is not possible for NHS trusts to offer this except to a limited extent and it is not possible for social services authority in-house providers to do this at all.
233.These flexibilities will not necessarily be appropriate in all areas, or for all client groups. What works for services for people with learning difficulties will not necessarily work for frail elderly people. The powers are therefore not mandatory. If authorities wish to apply for a new flexibility the intention is that need for it should be highlighted in the Health Improvement Programme (see section 28).
234.Subsection (1) provides the powers for the Secretary of State for Health to make regulations setting out the circumstances in which NHS bodies and local authorities can use the flexibilities. The flexibilities may only be used if doing so leads to an improvement in the way the functions are exercised, which includes better outcomes for service users.
235.Subsection (2) sets out examples of the new operational flexibilities.
236.Subsection (2)(a) enables the creation of pooled budgets made up of contributions from the NHS and local authorities. The resources contributed by each authority will lose their identity as health or local authority money. The pool will be able to fund both health and local authority activity as set out in regulations.
237.Subsections (2)(b) and (c) allow both NHS bodies and local authorities to delegate some of their functions to the other partner. These functions will be prescribed in regulations. In the case of the NHS and social care boundary, the effect of these subsections is to
	enable NHS commissioning bodies (Health Authorities and Primary Care Trusts) to delegate their commissioning functions to social services and social services to delegate their commissioning functions to Health Authorities and Primary Care Trusts. This allows the creation of lead commissioner arrangements; and
	enable NHS trusts (and Primary Care Trusts with a provider role) to delegate their service provider functions to social services and vice versa, thus creating integrated provider arrangements.
238.Subsections (3) and (4) allow the Secretary of State to set out detailed provisions regarding the operational flexibilities in regulations. These provisions may include the circumstances in which the operational flexibilities can be used (for example, which client groups or types of services can be subject to the arrangements) and which health or local authority functions can be subject to the new arrangements. The regulations may also set out how the new arrangements should be managed. This is provided for in more detail in subsection (4).
239.It is intended that use of the new arrangements will be subject, initially, to approval by the Secretary of State. Regulations may set out what criteria must be met in order for the operational flexibilities to be used: for example, who should be consulted on proposals and to what timescale; in what circumstances approval could be refused or withdrawn; and what the arrangements might be for varying the terms of the approval (for example, if local partners wish to extend the range of services to be covered by the arrangement or increase or reduce the size of a pooled budget).
240.Subsection (5) makes clear that, where a NHS body or local authority delegates its functions under the arrangements in this section, that body will remain liable for the exercise of those functions. It also provides that the provisions do not affect local authorities’ powers or duties to charge for services.
Commentary on Sections Schedule 2 Section 31: Arrangements between NHS bodies and local authorities