Hutchinson & Anor, R (on the application of) v The Secretary of State for Health and Social Care & Anor (Rev 1)

The dispute

This claim for judicial review concerns an issue of great public interest, namely whether the Secretary of State and NHS England have the lawful power to promulgate a new model for the provision of health and social care in England. The new model is termed an Accountable Care Organisation (“ACO” or “ACO model”).

Under existing legislation, the provision of health care is arranged by local Clinical Commissioning Groups (“CCGs”). These have wide discretion as to the models of care provision that they commission through procurement processes. At the risk of over-simplification CCGs tend in practice to arrange for the provision of services in their respective localities through a range of different providers on, often, relatively short-term contracts (under current planning guidance typically of at least 2 years). This can mean a proliferation of providing bodies and a lack of joined-up care.

The ACO model seeks to achieve greater integration. In practice it would involve CCGs commissioning much larger organisations to provide health and social care. Relative to the present situation this would mean far fewer providers (possibly only 1 per locality) operating over much longer durations (circa 10 years) who could be responsible for the preponderant part of all decisions relating to the provision of care and for the allocation of resources. The object is to encourage an increase in the integration of service providers with a view to, it is said, creating a more efficient and seamless health and social care path for patients. The seeds of this proposal were sown in a published NHS England document in December 2016. Full details, including draft model contract terms for the creation of ACOs, were only, however, set out in formal NHS England documents published in August 2016.

In evidence to the House of Commons Public Accounts Committee, the Chief Executive of NHS England, Mr Simon Stevens, acknowledged that the ACO model pushed at the “very edges” of the statutory regime. There is no doubt that the model is transformational and radical. Elsewhere, NHS England describes the proposal as one which “dissolves the divide between health and social care”. Unsurprisingly therefore views differ as to its pros and cons. The merits of the proposal are not, however, the business of this court. As matters stand there are two substantive issues of law that fall for determination coupled to a series of procedural disputes.

The issues of law that I must rule upon arise in the following way.

Following publication of the explanatory NHS England documents in August 2016 a group of academics, practitioners and others potentially affected by the proposal engaged in correspondence with the Defendants airing their concerns about the vires of the proposal coupled to a complaint that it was being introduced without proper consultation. They also complained that the proposal lacked clarity in material respects.

On 11^th September 2017 the Secretary of State published draft regulations designed to implement and provide the regulatory framework for the ACO model. In the regulations a variety of different definitions were used to describe an ACO. There were no explanations provided which accounted for the differences.

Over the ensuing weeks the Claimants wrote to the Defendants developing their concerns. On 29^th September 2017 the Claimants wrote to NHS England seeking information and as a possible precursor to a pre-action protocol letter. The Claimants expressed their concerns that NHS England had published a draft model ACO contract “…in a form ready for use”. It was observed that the new contract was to be introduced upon the basis of only very limited public engagement. It was said that even though there appeared to be some form of wider consultation envisaged this was incompatible with the model contract being ready for use. It was also said that prima facie the proposals were so radical as to fall outside of the powers of CCGs to adopt. Various exchanges then occurred between the parties.

A pre-action protocol letter was sent on 2^nd November 2017. This specifically attacked, inter alia: (i)the draft regulations published by the Secretary of State; (ii) the lack of a proper consultation about the proposals; (iii) the vires of the ACO model. A detailed response was sent by the GLD on 17^th November 2017. In that response (at paragraph [8]) it was acknowledged that it would be “illogical” to embark upon a consultation of a draft model ACO contract that it did not have the power to issue and it therefore made sense for the legislative framework to be put in place first. It was denied that there was a need for the Secretary of State to conduct a full-scale consultation. In paragraph [10] it was confirmed that the model ACO contract could be used by “early adopters” ie in advance of consultation. On 3^rd November 2017 the British Medical Association (“BMA”) sent a letter to the Secretary of State raising similar concerns. On 1^st December 2017 the Claimants sent a second pre-action protocol letter to the Defendants emphasising concerns as to lack of consultation.

The Claim for judicial review was filed on 11^th December 2017 and this raised all of the outstanding issues including the alleged failure properly to consult.

Subsequently several events occurred.

First, the Claimants had disclosed to them (on 15^th December 2017) a communication whereby NHS England pointed out to the Secretary of State that the way in which his officials had described the ACO model in the draft regulations risked conflating (potentially improperly) the statutory roles of CCGs (as commissioners) and third parties (as service providers) and that in certain other respects the descriptions risked being misleading or inaccurate. The Secretary of State took these points on board and agreed to modify the proposals. Second, in late January 2018 the Defendants agreed to initiate a national consultation on the ACO proposals, including the draft ACO model contract. Third, with the advent of judicial reviews (Footnote: ¹) relating to these proposals and the purdah presented by the imminent local authority elections, a decision was taken (in April 2018) to defer the consultation and any draft regulations that the Secretary of State might promulgate until the conclusion of the legal challenges.

In the light of these developments the concern of the Claimants (which had formed Grounds II and III of the initial claim for judicial review) to the effect that the Defendants were acting unlawfully in failing to conduct a proper consultation have been addressed. This leaves the Claimants’ concerns about the legality (“vires”) of the proposal and concerns about the lack of clarity and transparency of the scheme heightened by the absence of a common accord on key issues between the Secretary of State and NHS England (as referred to in paragraph [12] above).

This is the context in which the substantive issues arise. The Defendants however rely upon these shifts and turns in events to argue: (i) that there is now nothing for there to be a judicial review about since everything has returned to the melting pot of the consultative process; (ii) that it is therefore premature for there to be any challenge pending the outcome of the consultation; (iii) that in any event not only is the claim premature (pending a consultation) but it is also too late because the Claimant delayed following the August 2017 publications for more than three months before filing the claim for judicial review; and (iv) that the real persons affected by the ACO proposal are service providers and persons such as the Claimants do not have locus to bring the claim. There has emerged a further disagreement as to the precise nature and core components of the ACO policy itself.

The issues as they now arise can be formulated in the following way:

The conclusions that I have arrived at may be summarised as follows.

First, the ACO policy is based upon an optional model contract which CCGs are empowered but not obliged to adopt for their commissioning functions. If they adopt the model they then have discretion as to the extent of its use temporally, geographically and as to subject matter. Notwithstanding this discretion it is a reasonable inference to draw from the facts that the Secretary of State and the NHS England would promote a “max” version of the ACO policy whereby CCGs tender long-term contracts covering whole areas with wide scope and a substantial degree of autonomy over health care choices and resource allocation. This max version is a realistic possibility and an integral part of the ACO policy. It is also the basis of the Claimants’ Grounds of challenge; they have not launched a challenge upon the basis that CCGs might adopt the proposed model contract but on some far less extensive basis as to duration or geography or scope. I therefore take the “max” version of the ACO policy as the basis for testing the Claimant’s objections.

Second, the ACO policy (as defined) is within the power of the Defendants to propose (ie it is intra vires) and to base a consultation upon, and it is lawful for CCGs to adopt and apply.

Third, (and subject to the fourth point below) given that the ACO policy and the draft regulations are both to be made the subject of a full consultative exercise I conclude that the principles of transparency and clarity have not yet begun to apply.

Fourth, the judicial review raising the vires of the ACO proposal is not premature. There is an important legal dispute arising between the parties which there is real utility in the Court resolving. I have resolved this dispute in favour of the Defendants (under Issue II). An ACO policy of the type contemplated is intra vires and a consultation on the same would, it follows, be lawful. However, the other, undoubtedly serious and important, concerns expressed by the Claimants and encapsulated in their criticism of the Defendants’ proposal as lacking clarity and transparency, can be aired in the course of the consultation and it is premature therefore to raise them in litigation at this stage.

Fifth, I reject the Defendants’ objection that there was undue delay in bringing the claim for judicial review

Sixth, I reject the Defendants’ objection that the Claimants lack locus to bring the claim.

There were originally five Claimants. The first Claimant, Professor Stephen Hawking, died on the 14^th March 2018 and the claim in his name has, therefore, been automatically stayed. His claim had been brought not because of his fame as a physicist but because of his position as a patient and person to whom health services were being and would be, provided. The remaining four Claimants all have strong professional interests in the provision of health care in England. Dr Colin Hutchinson was, until his retirement in 2015, a consultant ophthalmologist with Calderdale and Huddersfield NHS Foundation Trust. He retains a strong interest in the development of health policy. He is the Chair of “Doctors for the NHS” and, along with his co-claimants, gave evidence to the House of Commons select committee on health in their current enquiry into accountable care models. Professor Allyson Pollock is a qualified doctor and former consultant in public health medicine. Between 2006 and 2011 she was Professor of International Public Health Policy and Director of the Centre for International Public Health Policy at Edinburgh University. From 2011-2016 she was Professor of Public Health Research and Policy at Barts and the London School of Medicine and Dentistry. Since January 2017 she has been Professor of Public Health at Newcastle University and Director of the Institute of Health and Society. She is also an elected member of the BMA council, a former chair of the NHS Consultants Association and a founding member of “Keep Our NHS public”. Professor Sue Richards is a retired professor in the field of public administration and public management. She has worked as an academic, a civil servant, and in the private sector. Formerly she was a director of the National School of Government and a Professor of Public Management at Birmingham University. Between 2013-2015 she was co-chair of the National Campaigning Organisation “Keep Our NHS Public”. She is an elected member of its national executive committee. Dr Graham Wynyard is a specialist in public health medicine. His medical career was spent in senior medical management posts in the NHS and Department of Health.

The Claimants have produced witness statements setting out their concerns about the development and promotion of ACOs. In particular they are concerned at the possibility of ACOs being private organisations. They are concerned at the absence of any Parliamentary scrutiny of the model. They believe that the proposed ACO model is so radical that it falls outside the scope of existing legislation. If it is to be introduced it should be through primary legislation thereby permitting detailed Parliamentary scrutiny.

The Claimants are supported in this claim by the BMA. A witness statement has been prepared by Mr Raj Jethwa, Director of Policy at the BMA. In his statement Mr Jethwa explains the approach adopted by the BMA to the ACO proposal. He focusses upon concerns relating to a perceived lack of transparency and clarity regarding the relevant proposals. He also expresses concerns about a lack of accountability and as for the implications of the proposals for the future of the NHS. At the outset of the statement he explains that the BMA is supportive of the principle of integration of health and social care services and has called for greater integration and collaboration between different parts of the health service and social care systems for several years. However, the BMA does not consider that the present proposals are a viable means of delivering integrated care for patients in the context of a procurement framework that requires such contracts to be put out to competitive tender. He states:

“We have several concerns regarding ACOs, including the lack of clarity and accountability surrounding their development, the risk of privatisation they present, whether the Government will provide the level of NHS funding and investment required for them to work, and how they will ensure services are based on a foundation of strong primary care”

The First Defendant, the Secretary of State for Health, shares a concurrent duty with the Second Defendant, NHS England, to continue the promotion in England of a comprehensive health service. They are required to exercise the functions conferred upon them by the legislation to secure that health services are provided in accordance with the Act. The Secretary of State retains ministerial responsibility to Parliament for the provision of the health service in England. NHS England has the function of arranging for the provision of services for the purposes of health services in England in accordance with the Act. The two Defendants have worked closely together on the development of the ACO policy. The primary responsibility for its promulgation lies with NHS England. However, the Secretary of State has overarching duties relating to the provision of care and also has a legislative responsibility in relation to the adoption of regulations, where necessary, to implement the ACO proposal.

With that introduction to the parties I turn now to summarise the relevant statutory context.

The principal legislative measure is the National Health Service Act 2006 as amended by the Health and Social Care Act 2012. In this judgment I refer to the amended legislation as the “NHSA 2006”

To place the Grounds into context it is necessary to describe the legislative framework governing the powers and duties of CCGs. I start by considering the position of CCGs and then, briefly, refer to legislative provisions of relevance governing the positions of the Secretary of State and NHS England.

I turn now to the functions of CCGs. It is common ground between the parties that these are particular to CCGs and non-delegable and that any ACO model that is adopted cannot result in CCGs abrogating the duties and functions that have been imposed upon them by Parliament.

Corporate status: Under Section 1I(1), Chapter A2 of Part 2 NHSA 2006 CCGs are bodies corporate. CCGs are membership organisations and must operate democratically according to their constitution. This must enable participation of all local primary medical services providers in commissioning decisions (Schedule 1A, Part 1 NHSA 2006, especially paragraph 6). CCGs must (section 14L) have a governing body constituted in accordance with the National Health Service (Clinical Commissioning Groups) Regulations 2012/1631 and must have audit and remuneration committees (section 14M). NHS England is required to ensure that all providers of primary medical services (which must therefore include all GP practices excluding out of hours providers) are members of CCGs (section 14A(1)) and that only providers of primary medical services are members of CCGs (section 14C(2)(b)).

“Functions”: The NHSA 2006 describes CCGs as having “functions”. This is a term used to cover both powers and duties: In the context of the local Government Act 1972 the House of Lords in Hazell v Hammersmith LBC [1992] 2 AC1 held that “function” embraced all the powers and duties of local authorities; the “sum total” of the activities entrusted by Parliament. In my judgment “function(s)” in the context of the NHSA 2006 should bear an analogous, and equally broad, meaning.

The duty to arrange provision: There are two overarching statutory provisions which describe the core functions of CCGs. Under Section 1I(2) the function of CCGs is that “… of arranging for the provision of services for the purposes of the health service in England in accordance with this Act”. Under section 3(1) a CCG “… must arrange for … provision … to such extent as it considers necessary to meet the reasonable requirements of the persons for whom it has responsibility…”. CCGs thus arrange for the provision of health services; they do not provide services themselves. They do this by commissioning which involves procurement and contracting. CCGs are permitted to contract with “any person or body” (section 12ZA). Before they embark upon a commissioning exercise they must have determined need (reasonable requirements) in the area for which they are responsible.

Duty not to discriminate: In conducting any commissioning exercise a CCG cannot discriminate on grounds of organisational ownership when deciding to whom to award a contract: Regulation 3(2)(b) National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013 (SI 2013/500). This means that CCGs cannot preclude private organisations tendering for contracts to provide health services. The position of the Secretary of State as applied to existing and future contractual models is that: “There will be no formal restrictions on who can hold the Contract. Both NHS bodies (eg a Foundation Trust) and non-NHS bodies (eg a GP Limited Liability Partnership) can bid to provide the ACO” (Question 4 – Who can hold the Contract? – NHS England publication “Contract Package: Questions and Answers”).

The health services to be provided: Section 3(1)(a)-(f) sets out a lengthy list of services which might be made the subject of a contract for provision. There is no obligation upon a CCG to arrange for the provision of all of the list. The extent to which they will commission the provision of a service will depend upon, inter alia, a prior assessment of local need (see paragraph [53] below). The list is as follows: “(a) hospital accommodation, (b) other accommodation for the purpose of any service provided under this Act, (c) medical, dental, ophthalmic, nursing and ambulance services, (d) such other services or facilities for the care of pregnant women, women who are breastfeeding and young children as the group considers are appropriate as part of the health service, (e) such other services or facilities for the prevention of illness, the care of persons suffering from illness and the after-care of persons who have suffered from illness as the group considers are appropriate as part of the health service, and (f) such other services or facilities as are required for the diagnosis and treatment of illness.”

The power to commission certain health services relating to physical and mental health and/or the prevention, diagnosis and treatment of illness: Section 3A is entitled “Power of clinical commissioning groups to commission certain health services” and contains a power (“may”) to commission particular types of health service. A CCG “… may arrange for the provision of such services or facilities as its consider appropriate for the purposes of the health service that relates to securing improvement – (a) in the physical and mental health of the persons for whom it has responsibility, or (b) in the prevention, diagnosis and treatment of illness in those persons”.

Secondary duties: There are many other functions allocated to CCGs. Relative to the primary or overarching functions set out in sections 1I and 3 NHSA 2006 these are described as “secondary”: see British Homeopathic Association v National Health Service Commissioning Board [2018] EWHC 1359 (Admin) at paragraph [7] citing National Aids Trust v NHS Commissioning Board [2016] EWHC (Admin) at paragraph [35]. I set out below some of the principal functions relevant to the present dispute.

Integration: CCGs are under an express duty to take steps to secure integration in the provision of health services in the NHS. Section 14Z1 imposes a duty on CCGs to promote integration. It provides that each CCG “…must exercise its functions with a view to securing that health services are provided in an integrated way” where it considers that this would improve the quality of those services, reduce inequalities between persons with respect to their ability to access those services, or reduce inequalities between persons with respect to the outcomes achieved for them by the provision of those services. Further, a CCG must exercise its functions with a view to securing that the provision of health services is integrated with the provision of health-related or social care services, and it: “… must encourage CCGs to enter into arrangements with local authorities” where it considers that this would secure such integration with the like effects.

The duty of effectiveness, efficiency and economy: CCGs are under an express duty to exercise their functions effectively, efficiently and economically (section 14Q)

The duty to seek continuous improvement in the quality of services provided: CCGs are also under a duty to seek continuous improvement in the quality of services provided particularly in relation to outcomes (section 14R)

The duty to innovate: CCGs are under a duty to promote innovation in the provision of health services, including in the arrangements made for their provision (section 14X).

Consistent performance of obligations: CCGs must act in a manner which is consistent with the duties of NHS England and the Secretary of State. Under section 3(1)(f) in exercising functions under section 3 and section 3A a CCG must act consistently with the discharge of the section 1(1) and section 1H(2) duties of the Secretary of State and NHS England to continue the promotion of a comprehensive health service, and the objectives and requirements specified in the mandate given to NHS England under section 13A.

Duty to have regard to NHS Constitution: Under section 14P each CCG has a duty, in the exercise of its functions, to act with a view to securing that health services are provided in a way which promotes the NHS Constitution.

The duties to promote consultation and involvement of patients: CCGs are (cf sections 14U and 14Z2) under duties to promote involvement of individual patients (and their carers and representatives) in decisions relating to their treatment, and, more generally, to involve the public (through consultations and the provision of information) in the planning and commissioning arrangements of the CCG and in the development and consideration of proposals for changes in commissioning arrangements.

Commissioning: Provision relating to commissioning are set out in sections 14Z11 and following. These include provisions relating to the formulation of commissioning plans, consultations on such plans, revisions to commissioning plans, the preparation and publication of reports about commissioning, the carrying out of performance assessments, etc.

The overarching duties under the NHSA 2006 of NHS England include the duty to continue the promotion in England of a comprehensive health service (sections 1(1) and 1H(2). This duty is owed concurrently with the Secretary of State. In the discharge of that duty NHS England must arrange for the provision of services for the purposes of the health service in England and to exercise the functions conferred on it by that Act in relation to CCGs so as to secure that services are provided for those purposes in accordance with the Act (section 1H(3)) The duties of NHS England are national. Under Chapter A1, Part 2 NHSA 2006, NHS England’s Board is subject to various secondary duties affecting how it must exercise its functions. These are in pith and substance similar to the functions imposed upon CCGs. In summary, NHS England must exercise its functions: (i) with a view to securing that health services are provided in a way which promotes the NHS Constitution (section 13C); (ii) effectively, efficiently and economically (section 13D); (iii) with a view to securing continuous improvement in the quality of services provided to individuals for or in connection with (a) the prevention, diagnosis or treatment of illness, or (b) the protection or improvement of public health (section 13E); (iv) having regard to the duty to reduce inequalities between patients with respect to their ability to access health services and reduce inequalities with respect to outcomes achieved for them by the provision of health services (section 13H); (v) with a view to enabling patients to make choices with respect to aspects of health service provided to them (section 13I); (vi) to promote innovation in the provision of health services (section 13K); (vii) to promote research (section 13L); (viii) to promote education and training (section 13M); and (ix) to promote the provision of services in an integrated way where this could improve the quality of services provided and reduce inequalities between persons with regard to their ability to access relevant services and reduce inequalities with regard to outcomes (section 13N(1)).

With particular regard to the power of NHS England to promulgate guidance on commissioning under regulation 17(2) of the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012, NHS England has a power (but not a duty) to draft model commissioning contracts for use by CCGs. It has (prior to the present case) exercised this power to draft two model commissioning contracts for 2017/19: (a) the 'full-length' NHS Standard Contract and (b) the 'shorter-form' NHS Standard Contract. Under Regulation 17(4) NHS England has the power to require CCGs to incorporate such terms and conditions it considers are, or might be, appropriate for inclusion in commissioning contracts and if so mandated a CCG is under a duty to incorporate these terms and conditions into any of its commissioned contracts. If, in a given case, NHS England does mandate the use of such terms it also has the power to exempt any CCG from that requirement.

The mandate given by the Secretary of State to NHS England under section 13A sets out the objectives of NHS England for the period 2018 to 2019 and, inter alia, includes the following: (i) improving local and national health outcomes and reducing health inequalities through better commissioning; (ii) leading a step change in the NHS in preventing ill-health and supporting people to live healthier lives; (iii) increasing integration with social care so that care is more joined up to meet physical health, mental health and social care needs; and (iv) supporting the NHS to achieve the Government’s aim that health and social care are integrated across the country by 2020, including through the Better Care Fund.

The Defendants attach heavy significance to their submission that the draft ACO model contract is a variant only of the existing NHS standard contract and that, therefore, the complaint that the ACO model is fundamentally different is misguided. Before turning to the issues arising it is therefore relevant to place the ACO model into the context of the present commissioning/contracting regimes operated by CCGs. The draft ACO model contract as published is entitled “NHS Standard Contract (Accountable Care Models) [(fully integrated)] [(partially integrated)] 2017/18 and 2018/19 General Conditions”. It comprises detailed General Conditions, Service Conditions, and Particulars. In total it runs to about 220 pages of detailed provisions.

In witness statement evidence before the Court Mr Edward Waller, the Director of the team responsible for developing the draft ACO contract within NHS England, states (at paragraph [57]) that the draft ACO contract reflects “to a very large extent the generic” NHS Standard Contract which is mandated by NHS England pursuant to its powers under the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2102/2996 for use by commissioners for all contracts for healthcare services other than primary care. He makes three main points. First, in both cases, the commissioner outlines and describes the scope of the services to be provided and both models contain the same requirement on the provider to deliver the services in scope to the “Quality Standards” stipulated in the contract. Second, the existing NHS Standard Contract does not dictate precisely how funds are spent by a provider or how the service is provided, it being up to individual commissioners to include as much or as little direction as they see fit which is also the case under the draft ACO model contract. Third, the existing NHS Standard Contract does not dictate how clinical and management resources are to be allocated to fulfil the terms of the contract, it being up to the provider (subject to the direction of the commissioner), to decide how best to meet the needs of its patients for whom it is responsible under the contract which is also the case under the draft ACO model contract.

Mr Waller’s Witness Statement, at paragraph [76], sets out in tabular form the ways in the draft ACO contract operates in key respects in similar ways to those arrangements which are currently made by CCGs with providers. In so doing the table also highlights differences and the ways in which the draft ACO model contract represents an evolution from the Standard NHS Conditions. The main points made can be summarised as follows:

The issue

I turn now to Issue I, concerning the dispute between the parties as to how to delineate the ACO policy. The first issue is to identify the key characteristics of the policy. In this respect the Claimants decry any reliance upon the draft ACO model contract arguing that the policy is set out in the surrounding explanatory documents. The Defendants however pin their colours firmly to the mast of the actual ACO model contract. But notwithstanding these opposing positions all parties have made detailed submissions about other material which it is said might comprise the ACO policy.

As I explain below the ACO policy is reflected in the model ACO contract which cannot therefore be ignored given that it is the particularised and concretised embodiment of the Defendants’ objectives. However, it is common ground that CCGs have a discretion whether to adopt the contract, and if so as to its extent. Accordingly, in my judgment the policy will include the present views of the Defendants as to how the ACO model contact should be used in practice. I conclude that a key part of the analysis is therefore the contract; but I cannot ignore the position adopted by the Defendants towards its use and on this in broad terms I agree with Ms Richards QC who says that the ACO contact is the means to the end and the “end” is described in the background published documentation.

The essence of the Claimants’ case is that the Defendants’ ACO policy is that:

These quotations are taken from the NHS England publication “Integrating Care: contracting for accountable models NHS England”, August 2017. The Claimants concentrate upon the breadth and scope of the powers being conferred upon ACOs which they argue are so great that they will, inevitably, involve the unlawful delegation, and abrogation, of duties by CCGs. They argue that the policy is inconsistent with the NHSA 2006 and could only be introduced by new legislation which would thereby enable Parliament to exercise proper scrutiny. CCGs are public and accountable statutory NHS bodies with defined roles subject to important statutory duties operating within a legislative regime of checks and balances. ACOs, by contrast, may be private, for profit, bodies with no statutory functions free from the statutory duties imposed on CCGs and from legislative checks and balances. The Claimants rely upon the following.

In 2014 official publications referred to “New models of care” and identified two such potential models: the Multispeciality Community Provider (MCP) and the Primary and Acute Care System (PACS). Although there is mention of “integration” there is no mention of ACOs. Various public statements were made in the course of 2017 by the Chief Executive of NHS England in evidence to the House of Commons Parliamentary committees which heralded the publication of new plans for increased integrated care. In March 2017 NHS England published “Next Steps on the NHS Five Year Forward View” which included some brief referencesto Accountable Care Systems (“ACSs”) which were described as “an ‘evolved’ version of an STP that is working as a locally integrated health system; systems in which NHS organisations (both commissioners and providers), often in partnership with local authorities, choose to take on clear collective responsibility for resources and population health.” The document suggested that “in time” some ACSs “may lead to the establishment of an accountable care organisation”. However, it was also stated that: “… the complexity of the procurement process needed, and the requirements for systematic evaluation and management of risk, means they will not be the focus of activity in most areas over the next few years”.

On 4^th August 2017, NHS England published on its website the draft contract for Accountable Care Organisations, together with a contract package and various associated documents. NHS England explained that “… a new type of contract, different from existing forms, is needed to commission integrated services from an Accountable Care Organisation”. NHS England’s stated intention was that this would be a “nationally-mandated” contract and it was anticipated to last for up to 10 years. The document “Integrating care: contracting for accountable models” explained what an ACO was:

“…an ACO is where the commissioners in that area have a contract with a single organisation for the great majority of health and care services and for population health.”

“A few areas – particularly some of the MCP and PACS vanguards – are on the road to establishing an ACO. An ACO model simplifies governance and decision making, brings together funding streams and allows a single provider organisation to make most decisions about how to allocate resources and design care for its local population.”

The same document stated that: “…the Contract is now usable for accountable care models generally” (emphasis added).

In their written submissions the Claimants observed that:

“The range of services that can be the subject of the Contract is extremely wide: embracing Accident and Emergency Services, Acute Services, Cancer Services, Community Services, Continuing Healthcare Services, Diagnostic, Screening and/or Pathology Services, End of Life Care Services, Mental Health and Learning Disability Services, Radiotherapy Services and Urgent Care/Walk-in Centre Services/Minor Injuries Units, Primary Medical Services or “All Services”. It is, moreover, clear from NHS England’s published documentation that the intention is that all (or the great majority of) services within the local area will become the responsibility of the ACO.

The proposed Service Conditions provide, at condition 1.8, that “The Provider may, within the scope provided by this Contract, use and allocate its resources and deliver the Services in such manner as it determines will best serve the needs of the population”, provided only that “it does not do or fail to do anything which would; 1.8.1 place any Commissioner in breach of any statutory duty in relation to the Population; 1.8.2 render any Commissioner liable to challenge under the Public Contract Regulations 2015 or otherwise; or 1.8.3 constitute an unlawful delegation of any function by any Commissioner”.

The ACO is required to “develop and implement strategies to improve the health and wellbeing of the Population” (condition 3.2) and to “maintain a documented, current and thorough assessment of the health [and social] care needs of the Population”.

Under the ACO contract, the ACO will not be paid through the pricing mechanism specified in the national tariff but by means of a “payment approach”, comprising a “Whole Population Annual Payment” (WPAP) to the ACO, a “‘gain/loss share agreement’ to align financial incentives across services provided for the care model population” and an “Improvement Payment Scheme” designed to incentivise improved outcomes”.

The Claimants refer to other documents from which they infer a number of matters:

I will now set out my conclusions on the key characteristics of the policy which is in issue in this case. In my judgment the policy is reflected primarily in the draft ACO model contract. However, it is not fully reflected in this document. The contract is a non-compulsory model and CCGs have a discretion as to its use. To understand fully what the ACO policy is, there has to be some context added and this comes from the Defendants’ explanations and publications.

In my view there is far less that divides the parties than at first meets the eye. It is common ground that the ACO model contract is not mandatory and that therefore a CCG can use it or not as it sees fit. Ms Richards QC argues that in practice it is the policy of the Defendants that it should in fact be used in its “max” version. The Defendants emphasise the non-mandatory nature of the model; but, so it seems to me, it is a fair reflection of the surrounding explanatory documents that the Defendants do positively promote the fulsome use of the model since it is in this way that they achieve their object of maximising integration.

I disagree with Ms Richards QC in her submission that the ACO policy is thus only the max version, but I accept the thrust of her argument that, even if not mandatory, it is a desirable norm that the ACO policy would seek to bring about. I am not suggesting that the discretion being conferred upon CCGs is artificial or illusory. It is a genuine discretion and, assuming the ACO policy is ultimately adopted, there could well emerge a variety of permutations of ACO models. This does not however preclude the ACO policy of the Defendants as including as a core component an intention that the ACO model be at least capable of full implementation in its max form (with the characteristics set out at paragraph [54] above) which would entail a single entity being responsible for the preponderant part of health and care services in a defined locality operating under a long-term contract pursuant to which it has responsibility for a very high proportion of resource and budgetary decision making. This is the ACO policy that I take as the starting point for analysis.

Before moving on there is one further matter that I should refer to. I have already (see paragraph [12]) referred to the exchange as between NHS England and the Secretary of State over the correct way to describe an ACO. In defining the ACO policy in this judgment I am not taking as a definition of an ACO that which is found in the draft regulations. The Claimants have relied upon this exchange as evidencing alleged confusion in the Defendants’ thinking and as illustrative of a lack of clarity and transparency. They refer to the response of NHS England to the Secretary of State on the draft regulations where in relation to the definition of ACOs in the draft regulations, it is stated:

“… we note that:

The proposed definition is very broad. While this may be intended to accommodate a range of different types of ACO, subsection (b) in particular is problematic as it may suggest that an ACO can usurp or exercise the statutory duties of a clinical commissioning group. This is not the case. An ACO will not commission services.

The draft definition refers to NHS England ‘designating’ an ACO. However, it is not clear what this is intended to mean and NHS England has not suggested such a process. A body would become an ACO if it is awarded an ACO contract rather than being ‘designated’ as such.”

NHS England suggested that the Secretary of State “gives consideration to ensuring that other elements of the proposed changes to these regulations do not risk conflating the functions of a commissioner with the activities of an ACO”. The Secretary of State accepted the criticism made by NHS England and has stated that he will in due course correct the position. The GLD acknowledged that these regulations contained errors in a letter to the Claimants’ solicitors dated 15^th December 2017. This referred to the submissions of NHS England and stated that “therefore” none of the wording in question would “form part of any final draft regulations”.

In a document issued subsequently by the Secretary of State (dated March/ April 2018) entitled “Accountable Care Organisations: Government response to consultation on changes to regulations required to facilitate the operation of an NHS Standard Contract (Accountable Care Models)” the evolved thinking was set out. On pages [11] and [12] the following is stated:

“Changes to definitions used across the amendments to regulations

Before proceeding with an explanation of the post-consultation revisions for each of the proposed sets of amendments to regulations, it is important to address comments received by NHS England that applied to all the draft amendments to regulations and have resulted in changes.

The draft amendments to regulations included a number of different definitions of ACOs and related terms:

• Definitions of Integrated Services Provider Contract and Integrated Services Provider are provided in the proposed amendments to the National Health Service (General Medical Services Contracts) Regulations 2015 and the National Health Service (Personal Medical Services Agreements) Regulations 2015. The proposed amendments to the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012 cross-referred to that definition,

• ‘accountable care organisation’ or ACO was defined in the proposed amendments to the National Health Service (Travel Expenses and Remission of Charges) Regulations 2003, the National Health Service (Charges for Drugs and Appliances) Regulations 2015 and the Local Authority Social Services and National Health Service Complaints (England) Regulations 2009 and

• a different definition of ‘accountable care organisation’ as given in the proposed amendments to the Medical Profession (Responsible Officers) Regulations 2010.

• NHS England's response commented on the definitions used in the draft amendments to regulations, "(We) would suggest that some amendments are made to the drafting to ensure that the policy aims are achieved. Amongst these… we note that multiple different definitions of accountable care organisation, integrated services provider and related terms are currently used in the draft regulations…These different terms and definitions may cause some confusion and we would query whether it is necessary to distinguish in legislation between accountable care organisations and integrated services providers." NHSE also said of one specific definition which referred to NHS England 'designating' an organisation as an ACO and to an ACO being an organisation that makes "most decisions about how to allocate resources and design care for its local population" that it was "not clear" what designating was intended to mean and that the definition was "problematic as it may suggest that an ACO can usurp or exercise the statutory duties of a clinical commissioning group. This is not the case. An ACO will not commission services."

Government response

• We acknowledge the points made by NHS England and wish to ensure that any definition used in the draft amendments to regulations cannot be misinterpreted as suggested by NHS England. This particular definition of ACO used in the consultation version of the proposed amendments has been changed, and is no longer contained in any of the final proposed amendments to regulations. These definitions will not mandate what form an ACO should take or what an ACO's responsibilities will be. Instead the definitions of an integrated services provider (ISP) and an integrated services provider contract (ISPC) are now used (revised draft set out in italics below). In the consultation document, the definition of "integrated services provider contract" appeared as a separate definition in the relevant definition section. The original intention was that an integrated services provider contract was a defined term to be used only in respect of an ACO contract under which primary medical services were being provided. However, following NHS England's comments, we have reconsidered the relevant definitions within the proposed set of amendments. Given the aim of the new ACO contract is to commission integrated health and care services, we have taken the view that transparency and clarity is best served by maintaining a consistent definition that sets out who may be the commissioners of such a contract on the one part, and what services may be provided under or pursuant to that contract. The definition of integrated services provider contract has now been refined so that it now applies in all contexts to the contract which will be used by an ACO for the provision of integrated health and care services regardless of whether primary medical services are included in those services. The revised definitions also ensure that there can be no scope for misunderstanding about what is entailed by the ACO contract. By cross-referencing 'integrated services providers' to 'integrated services provider contracts', the new definitions make clear that the ACO contract does not create a new legal entity. Under an ACO contract, the 'ACO' will not commission services. An 'ACO' is simply a provider of health care services which enters into an integrated service provider contract. The definition that is to be inserted into Schedule 3A to the National Health Service (General Medical Services Contracts) Regulations 2015 is set out below.”

Following this the Secretary of State has now provided a definition for an “Integrated Service Provider” and an “Integrated Service Provider Contract” which clarifies that an ACO does not commission health care services but provides them pursuant to a contract. Previous references to ACOs taking “most decisions about how to allocate resources and design care for its local population” have been removed, as have references to “designation”.

In these circumstances any impression which had been given, and to which NHS England objected, that an ACO might be “designated” by NHS England and/or that it will assume functions properly attributed to CCGs under the NHSA 2006 has been formally clarified. In identifying the ACO policy of the Defendants I have taken account of the position now adopted by the Secretary of State.

Issue and conclusion

I now consider the question of vires upon the basis that the ACO policy includes the “max” version which has the attributes described by the Claimants and which I have referred to at paragraph [54] above. I start by setting out my conclusion which is that the policy so described, including its max version, would be intra vires and therefore lawful.

The essence of the Claimants submissions is that the conferral upon ACOs of max powers will inevitably result in the CCG having de facto delegated its powers and duties to ACOs where under the NHSA 2006 this is impermissible. During oral argument an increasing focus was placed on the specific terms of the draft ACO model contract to demonstrate the breadth of the powers conferred but also the extent to which CCGs could retain sufficient residual power to enable them to fulfil their own, non-delegable, statutory functions. NHS England argued that the draft model contract demonstrated that CCGs would possess strong retained supervisory powers and could perform their statutory functions. The Claimants argued to the contrary. I start by summarising the Claimants’ arguments.

The very limited residual role of a CCG under an ACO contract: The ACO policy is unlawful if, in effect, it prevents the CCG from exercising its statutory functions meaningfully. Those functions include: (i) assessments of the reasonable requirements of the persons for whom it has responsibility (Footnote: ²); (ii) determination of what services are necessary to meet those requirements; and (iii) making arrangements for provision of services determined to be necessary at the time (section 3). CCGs have concurrent on-going duties in respect of matters including: continuous improvement in quality of services (section.14R); reduction of inequalities (section 14T); patient involvement (section 14U); patient choice (section14V); promotion of innovation (section 14X); promotion of research (section 14Y); and promotion of education and training (section 14Z). Under the ACO policy the residual role of the CCG would be very limited indeed. In no meaningful sense would the CCG be retaining responsibility for its statutory functions.

Long terms duration: Furthermore, the term of the draft ACO contract allow for limited and inadequate action to be taken in response to changing assessments of needs and the arrangements necessary to meet those needs, or in response to evolving views as to how other duties should be discharged over time. The net effect is that CCGs will have delegated/transferred their statutory functions to third parties. ACO contracts are contemplated as being of up to 10 years duration. There is inadequate ability for CCGs to reflect changes in circumstance arising over the contract period in the ACO contract. According to NHSE’s technical guidance a standard existing contract is for two years. Recent research reveals that about 50% of all contracts are for less than two years and only a handful exceed three years. (Footnote: ³) Whilst the ACO contract can in principle be varied or terminated, to take account of changes in circumstances over a longer term generally requires agreement or default. This is inadequate. Further the standard NHS contract does not include a provision similar to SC 1.8 of the draft ACO model contract allowing the provider to use and allocate its resources and deliver services in such manner as it (ie the ACO) determines will best serve the needs of the population.

The ACO model is a radical departure from existing NHS contracts: The NHS England argument that the contract management provisions are no less extensive than those in the existing generic NHS Standard Contract is unjustified because the generic NHS standard contract is not intended to be used (i) with a single provider; (ii) to deliver all or most services; (iii) with a lump sum payment; (iv) over 10 years; or (v) to fulfil the policy objective of that single provider taking most decisions about resource allocation and design of care and becoming collectively responsible and accountable as a single organisation for the delivery of health and care for a particular area (or population).

The ACO model permits service reconfiguration and hospital closures: Nothing in the draft ACO contract would prevent an ACO from closing a hospital and there is nothing in published materials indicating a policy intention to restrict the right of an ACO to reconfigure services (whether by way of hospital closure or in any other way). In fact, the published material makes clear that ACOs are intended to have wide discretion over allocation of resources and design of care. NHS England makes no mention in its submission of any of the numerous published documents supporting the draft ACO contract and it refers only to two provisions of the contract. First, it asserts that the draft ACO contract “anticipates that the commissioner will specify premises from which key services are to be delivered through the service specification”. However, the cited schedule (Schedule 2C) makes no reference to the place where services are to be delivered nor set out anything to suggest that this level of detail is intended to be prescribed locally. The Explanatory Notes state, to the contrary, that the service specification should provide “flexibility for ongoing service redesign” and “might involve type of service rather than their detail”. NHS England states that closing a hospital is “unlikely” given the restrictions placed on asset disposal under the contract. Under General Condition 19.4 the CCG may give notice in writing to an ACO requiring it not to dispose of “Relevant Assets” without prior consent and a hospital building can be included in a list of “Relevant Assets”. However, this provision would not prevent an ACO from ceasing to deliver services from a particular building; or from using that building to deliver different medical services (which could be delivered to a different NHS commissioner or a private customer); or from using the building for any other purpose (which could include a commercial purpose); or from undertaking any other form of service redesign falling short of wholesale disposal of the hospital building.

Duties and guidance apply to CCGs not ACOs: NHS England identifies requirements imposed on CCGs under statute and guidance, but these would not bite against an ACO and give no powers or control to a CCG:

Conclusion: The challenge does not turn on the terms of the contract. These are merely a means to an end. The “end” is the transformational policy shift to single providers contracted to provide all services in a locality lacking any real supervision and where the overall policy has not been subjected to Parliamentary oversight. This policy is not contemplated by the NHSA 2006 and is ultra vires.

The Secretary of State and NHS England disagree. Ms Morris QC advanced the analysis on behalf of both Defendants. Before, during and after an ACO contract a CCG retains legal responsibility for all its statutory functions. Nothing in the draft ACO model either delegates to ACOs the functions of the CCG or makes meaningful performance by CCGs of those statutory functions impossible. The concerns of the Claimants do not go to the legality of the ACO model and can properly be considered during the consultation when the draft ACO model contract can be modified and/or improved in the light of submissions made. Even if implemented in its max form the ACO policy is intra vires the powers of CCGs and, it follows, the powers of the Defendants to propose. In summary: (i) The draft contract does not “prevent” a CCG from exercising its statutory functions; (ii) entering an ACO contract does not absolve the CCG from the responsibility of exercising its statutory functions; (iii) the Claimants’ argument that the role for the CCG under the draft contract is diminished is incorrect since the CCG’s statutory role is unchanged; and (iv), the draft contract is specifically designed to ensure that an ACO does not put the CCG in breach of its statutory duties.

CCGs retain responsibility for statutory functions: Under the ACO policy a CCG retains statutory responsibility for assessing the reasonable healthcare requirements of the persons for whom it has responsibility through: (i) deciding whether to enter into an ACO contract at the outset, and determining its scope and the outcomes against which it will measure the provider’s performance under the contract; (ii) the completion of periodic needs assessments and joint health and wellbeing strategies; (iii) its continuing review of the contract requirements, in particular the service specifications; (iv) its management of provider performance under the contract; and (v) the collection and analysis of quantitative and qualitative data about the healthcare needs of its population, and (further to the above) its acting on that data.

CCGs retain responsibility for assessing and deciding upon need: A CCG is not precluded from determining what services are necessary to meet the reasonable requirements of those for whom it has responsibility. The CCG must also make arrangements for services that it determines are reasonably required during the life of the ACO contract through changes in the services to be provided under the ACO contract (by agreement or through GC16.5.2) or commissioning services from a third party. Under section 3 NHSA 2006 CCGs must commission the provision of services “to such extent as it considers necessary to meet the reasonable requirements of the persons for whom it has responsibility”. This presupposes that prior to any award process the CCG must have formed a conclusion about local need. A CCG will perform joint strategic needs assessments ("JSNA") under section 196(1) Health and Social Care Act 2012 and formulate joint health and wellbeing strategies ("JHWS") under sections 116 and 116A of the Local Government and Public Involvement in Health Act 2007. In addition, the CCG must ensure proper patient and public involvement pursuant to section 14Z2 NHSA 2006. Nothing in the ACO policy changes these duties which remain.

The ACO policy involves no change on whether private entities can provide health services: The criticism about the ACO policy encouraging privatisation of the NHS is misguided. A CCG seeking to commission provision by way of an ACO contract will be required to deploy the same procurement Regulations (viz., the Public Contracts Regulations 2015/102, the National Health Service (Procurement, Patient Choice and Competition) (No.2) Regulations 2013/500) that already apply to commissioners. Under these rules it would be unlawful for a CCG to discriminate between bidders on the basis that they were private or public-sector bodies for the purposes of awarding an ACO contract. Further, section 13P NHSA 2006 prohibits NHS England from taking steps for the purpose of increasing or decreasing the proportion of NHS services provided by persons of a particular description (including, for example, private sector bodies).

Pre-contractual section 3 assessments: Under ordinary procurement principles the CCG will have to publish the specification against which tenders are made. That specification will reflect the outcome of earlier assessments and exercises which will play a part in the decision of the CCG as to the identifications of which services to commission and their scope. The requirements could include: (i) the outcomes that are required from the service; (ii) generally applicable service standards; (iii) the location of the service; (iv) the quality requirements in relation to the services; (v) the identification of to whom specific services are provided; (vi) the requirement for prior approval by the CCG for specific treatments. Under the draft ACO model contract there are blanks where these details would be inserted. There is therefore a direct correlation between the performance by CCGs of pre-contractual duties and the terms of an ACO contract. The former feeds into and informs the latter. The section 3 duties arise independently of the ACO model.

Control during currency of an ACO contact: An ACO contract may be long term. The CCG must include in the contract sufficient contractual mechanisms to ensure that it can take account of relevant changes that occur over the contract period. The draft ACO model contains clauses for modification and variation based upon consent but also, importantly, unilateral decision making by a CCG. For example, SC14.2 provides that:

“The Provider must at its own cost provide all support and assistance reasonably required by the Commissioners in relation to the performance of their duties under section 14Z2 of the 2006 Act in connection with this Contract, the Services or any reconfiguration of them, and/or the provision or reconfiguration of any other services to the Population.”

(emphasis added)

SC16 contains provisions relating to variations and these include clauses permitting a CCG to vary the contract without the provider’s consent where necessary to ensure compliance with the NHSA 2006 or other regulations made pursuant the Act or directions given by the Secretary of State (SC16.5). Detailed provisions also exist permitting the CCG to impose variations to remedy a persistent or material failure by a provider of: any Operational Standard or National Quality Requirement; any Local Quality and Outcome Requirement; or any other material obligation on its part under this Contract. In the event of disagreement between the provider and CCG over such matters dispute resolution mechanisms are provided. In short the draft ACO model contract specifically addresses the issue of the need for CCGs to implement changes in circumstances through contract modifications.

Monitoring and supervision: Provision is made for the CCG to perform monitoring and supervision of a service provider over the life of the agreement. For instance: GC7 (Review) mandates periodic reviews of the contract performance and a mechanism is instituted for resolving outstanding disagreements; GC8 (Contract Management) sets out a procedure which applies in the event that a provider, having agreed to remedy a performance failure, does not do so and can lead to the withholding of payments or the imposition of other sanctions; GC9 (Information Requirements) imposes obligation on service providers to furnish data and information to CCGs. Also relevant are: GC10 (Monitoring Activity); GC11.15 (Ability to Make Deductions from Payments for Breaches of Quality Standards); GC15 (Assignment and Subcontracting – including ability to require replacement or appointment of subcontractors); GC16 (Variations); GC18 (Financial Transparency etc.), GC19 (Restriction on Disposal of Assets etc.), GC20 (Control over Provider Distributions), GC21 (Inspection and Audit), and GC22 (Suspension of Services).

The continuing role of CCGs during the subsistence of contracts: During the currency of an ACO contract CCGs will be subject to continuing statutory obligations. These are unaffected by the ACO policy. For example the performance of periodic population health needs assessments and the production of annual commissioning plans setting out how the CCG intends to use new or existing contracting arrangements to meet the needs of its population.  Such assessments will inform updates to the ACO contract (for example in relation to prioritisation, outcomes, segments of the population to be targeted and data to be collected) and all contract management decisions of the CCG (for example in relation to renewal, variation, termination of contracts).

“Arranging” and sub-contracting: Although it is the statutory role of the CCG to “arrange” for provision; it will also be the role of the service provider, when fulfilling its contractual obligations, to arrange for provision, and it will do this by sub-contracting. GC15 covers assignment and sub-contracting. Nothing in the NHSA 2006 precludes CCGs empowering ACOs to engage in sub-contracting. Subcontracting is permitted only with the prior written approval of the Co-Ordinating Commissioner and, in certain cases, NHS England. Commissioners can approve the terms of the proposed sub-contract or require that the sub-contract takes a specified form. They may designate any subcontracting arrangement approved by it as a “Mandatory Material Sub-Contract” ie a material subcontract without which the provider would be unable to deliver, or would be seriously hampered in delivering, the services in accordance with the contract. The CCG can also require subcontractors to execute “Direct Agreements” with the commissioner which allow the commissioner to intervene and ensure continuity of service if the ACO provider defaults.

Service reconfiguration and hospital closures: Unilaterally closing a hospital would place a CCG in breach of its statutory obligations and is prohibited under, inter alia, SC1.8. Since the requirements imposed by statute and otherwise would remain in force the CCG, qua commissioner, is ultimately responsible. The draft ACO model contract imposes obligations on the ACO to ensure that it does not place the CCG in breach of these obligations. For example, in relation to the involvement of patients the ACO is obliged under the draft contract to involve patients in the same way that providers are currently obliged under the existing NHS Standard Contract (cf SC12.5 of the current NHS Standard Contract). If the ACO is an NHS body, that contractual obligation will be bolstered by a separate statutory one. If it is not, then (like a private provider of NHS services now) the ACO will be contractually obliged to undertake involvement to ensure that the CCG meets its own statutory involvement duties.

This Ground raises a narrow issue: If a CCG were to adopt the max version of the ACO policy would that be outside the statutory powers of the CCG and, as such, outside of the powers of the Defendants to propose and consult over? This is not an academic or moot point given that the Defendants intend to consult upon the premise that the ACO policy, which necessarily includes the max version, is a lawful one. There is accordingly a genuine dispute of substance at the heart of this case. I note that a similar position was adopted by Kerr J in Shephard v National Health Service Commissioning Board [2018] EWHC 1067 (Admin) in relation to the legality of the proposed payment mechanism under the draft ACO model: see at paragraph [75].

In my judgment the model ACO contract is, even if implemented in its max form, capable of being intra vires the statutory functions of CCGs. It is, as such, a lawful policy for the Defendants to adopt and would not, assuming implementation, lead to illegality on the part of CCGs. To consult upon the ACO policy is therefore a proper course to adopt. In arriving at this conclusion, I am not expressing a view on the merits of the ACO policy, only its vires. Nor am I suggesting that the ACO model contract could not be materially improved through the consultation process. Indeed, I am not suggesting that the points articulated by the Claimants lack force or cogency.

The nub of this Ground focuses upon the breadth of the max version in terms of duration, geographical scope, subject matter and budgetary discretion. To determine the question of vires I must therefore decide whether there is anything in the NHSA 2006 which precludes either expressly or by implication this max version. I have distilled the Claimants’ submissions into four issues: (a) whether any aspect of the ACO policy is inconsistent with the overarching functions of CCGs under either sections 1I and/or 3 NHSA 2006; (b) whether the ACO policy pursues an objective which is not permitted by the Act; (c) whether pursuing the ACO policy would put CCGs or the Defendants in breach of their other statutory functions; and (d) whether pursuing the ACO policy would put CCGs in breach of their continuing section 3 duties of assessment of need.

The powers of CCGs are subject to many limitations imposed by the NHSA 2006. There are three principal limitations relevant to the present case.

First, I must decide whether the ACO model is consistent with the key duty on CCGs to “arrange” for provision and, in particular, whether the fact that under the ACO model an ACO itself might arrange for the provision of services to be provided by third parties under sub-contracting arrangements involves an impermissible delegation of the CCGs duty to arrange for provision?

Second, the functions of CCGs must be exercised “in accordance with this Act” (section 1I(2)) and there are many duties and obligations imposed between sections 14P – 14Z6 NHSA 2006 all of which affect the way in which the overarching duty to arrange for provision must be discharged. These functions (powers and duties) are non-delegable. They are expressly imposed by Parliament on the CCGs and there is nothing in the Act which indicates expressly or by necessary implication that Parliament intended that they be delegable. The question is whether the ACO model would prevent the CCG from performing these functions and/or involve an unlawful delegation to the ACO of these functions?

Third, the duty to arrange must also be performed: “…to such extent as it considers necessary to meet the reasonable requirements of the persons for whom it has responsibility” (Section 3(1)) which presupposes both that (a) before any act of arranging occurs the CCG must have formed a conclusion as to “reasonable requirements” ie need and (b) that the CCG must continue to review that conclusion over the course of the contract. The question is whether the ACO policy would either prevent the CCG from performing the assessment which is contemplated by this section and/or involve an unlawful delegation to the ACO of this (non-delegable) task?

“arrange” and “arranging” / “provision”

I turn first to the meaning of key terms in section 1I and 3 NHSA 2006. I start with “arranging” and “arrange” in sections 1I and 3. These describe the core functions of a CCG ie to arrange for the provision of health care. These words are not defined in the Act, and in my view deliberately so. They are broad terms. The duty on CCGs is to arrange the provision of services; a CCG does not provide the services itself. It arranges by commissioning which involves a process of procurement and contracting. It is not correct therefore to say that a CCG delegates provision because provision is not something which the CCG does itself and it cannot therefore be delegated.

Parliament, wisely, did not attempt to limit the various ways in which CCGs could arrange for the provision of health care. These may be many and various and any attempt to define them would have risked failing to capture in drafting language forms of commissioning which were perfectly sensible and rational but escaped the draftsman’s attempt at comprehensive definition. Indeed, it is notable that in section 13K, CCGs are under a duty to promote innovation which duty is extended to “…innovation in the arrangements” made for the provision of health care. Parliament thus recognised that there might be innovative, and hence not yet forseen, forms of arranging and this is inconsistent with Parliament seeking to limit what is meant by “arrange” or “arranging”. It follows, in my view, that Parliament intended CCGs to enjoy a broad discretion when choosing how to commission.

Next, I address the meaning of “provide” and “provision”. Again, Parliament did not define these terms. They are of necessity broad and encompass all that is required to perform the contract pursuant to which the providing entity in question is contractually bound to provide services. Importantly, the function allocated to a CCG to arrange for provision is nowhere stated to be imposed exclusively upon CCGs which means that a service provider might also arrange for the provision of health care by, for instance, sub-contracting. This must be so: An entity commissioned to provide health care to a population will itself have to make arrangements to employ, instruct or commission clinicians and others to provide those services. Nowhere in the legislation is it stated that the provider must employ (in-house) each and every doctor, consultant or specialist or other professional or administrator needed to provide a health service. It is logical that if (say) a provider identified an occasional need for a specialist to provide some very rare service that they would enter into some form of third party arrangement with that specialist to secure their services and pay for them on an ad hoc basis. This would be an unremarkable illustration of how, in order to perform their contractual obligation under a contract with a CCG, a provider might have to “arrange” for the provision of services by third parties. I would add that Ms Richards QC for the Claimants did not argue that service providers could not sub-contract or that CCGs could not, when arranging for provision, empower service providers to enter into sub-contracts.

My first conclusion is that there is nothing in the description of the core functions of a CCG in the legislation which would preclude the adoption of the max ACO model. These all fall within the broad concepts of arranging for provision.

I turn now to the second question which is whether the max version of the ACO model would have the inevitable effect of preventing CCGs from performing their statutory functions, or delegating to ACOs those functions. Section 1I makes clear that each CCG has the “function” of arranging for the provision of services “in accordance with this Act”. As set out above (see paragraphs [30] – [45] above) there are many continuing duties imposed upon CCGs by the NHSA 2006. In the main the duties are to “promote” some broad object, or to act “with a view to” achieving some target, or to “have regard to” some identified factor. They are drafted in broad and un-prescriptive language. In my judgment, based upon the manner in which Parliament has framed these duties, it has accorded to CCGs a wide discretion as to their modus operandi ie how the functions are to be performed.

For instance, the duty on CCGs in relation to improving the quality of services and outcomes in connection with prevention, diagnosis or treatment (section 14(R)(1) and (2)) is framed as a duty to exercise their statutory functions “with a view to” securing such objectives. No further detail is set out. In relation to the promotion of education and training (section 14Z) and in relation to the duty to reduce inequalities between patients in terms of access and outcomes (section 14T(a) and (b)), the duty is only to “have regard to the need” to achieve these objectives. In relation to awareness of the NHS Constitution (section 14P(b)) the duty is one of promotion only. There is, again, no detail as to how that promotion should occur, or as to its extent. In relation to the duty relating to patient involvement this is cast as a duty to “promote” involvement of patients and their carers and representatives (section 14U). In relation to innovation this is cast as a duty “to promote” innovation in provision and “in the arrangements made for their provision” (section 14X). The same applies to the duty in respect of research and the use of research results (section 14Y).

These duties must, perforce, be read in the context of the main responsibility of CCGs which is to arrange provision ie engage in commissioning. It follows that if CCGs are to observe and perform their statutory functions they must in large measure do so through the commissioning process by including in contracts with service providers obligations which reflect those overarching duties, and which take account of their continuing natures.

It cannot in my judgment be argued that the Defendants have misdirected themselves because they were oblivious to the need to reconcile the non-delegable nature of functions entrusted to CCGs with the desire to promote the use of ACOs which will have wide-ranging tasks allocated to them which overlap with the functions of CCGs. The Defendants have already grappled with this issue. In August 2017 NHS England issued “ACOs and the NHS commissioning system”. In that document the following is stated:

“2.

While CCGs’ role will continue to evolve, there will remain a need for an effective commissioning function in the NHS. This includes acting as funder, setting local priorities and incentives to ensure that the needs of local patients are met, oversight of contracts, ensuring best value for the taxpayer, and ensuring the provision of a comprehensive local NHS within the available resources. CCGs need to ensure that they have the capacity and capability to continue to discharge their functions once an ACO is established”

And

“7.

CCGs will continue to be responsible and accountable for the delivery of their functions. They have the flexibility to decide how far to carry out activities related to these functions themselves; including in groups (e.g. through lead CCG arrangements); or through external commissioning support. They may also require, through contract provisions, an ACO provider to take action to support the discharge of certain CCG duties (e.g. to reduce inequalities or ensure patient choice). However, in all these instances the CCG will retain responsibility for its functions. These cannot be delegated. As part of the process of establishing an ACO, CCGs will need to assure themselves and NHS England of their ability to discharge their statutory functions.”

The need to take account of this point has been reflected in the draft ACO model terms and conditions. SC1.8 of the draft ACO model contract states as follows about the respective roles of commissioner and provider:

“1.8

The Provider may, within the scope provided by this Contract, use and allocate its resources and deliver the Services in such a manner as it determines will best serve the needs of the Population, provided that it does not do or fail to do anything which would:

1.8.1

place any Commissioner in breach of any statutory duty in relation to the Population;

1.8.2

render any Commissioner liable to challenge under the Public Contract Regulations 2015 or otherwise; or

1.8.3

constitute an unlawful delegation of any function by any Commissioner.”

In August 2017 NHS England published “Contract Package: Questions and Answers” This was described as a “Supporting Document” in relation to ACOs. Paragraph 11 was in the following terms:

“11.

How will the roles of commissioners change?

The establishment of ACOs may lead to a shift in the activities of both providers and commissioners but will not dissolve the established boundary between commissioning and provision. CCG statutory functions will not change, and CCGs will not be able to delegate responsibility for their statutory functions to the integrated provider.”

My conclusion on this second point is that the Defendants have squarely addressed themselves to the need to build into the draft ACO model contract mechanisms designed to ensure that by their conduct an ACO does not act so that the CCG is in breach of duty or, otherwise, act in a manner inconsistent with CCGs being required to continue to perform statutory functions. Further, as the Defendants have argued (see paragraphs [77] – [85] above) they have also built into the draft contact, mechanisms for continuing supervision to take account of changing circumstances. The ability to vary a contract is not limited to cases where the variation is by consent or due to breach, it includes a unilateral power.

I do not therefore accept the Claimants’ argument that the fact that simply because ACOs are subjected to contractual obligations which replicate the statutory duties of the CCG this is evidence that the functions Parliament has imposed on CCGs have been unlawfully delegated. Since CCGs must perform their statutory functions via contracting and since a CCG can fall into breach of statutory duty by reason of the conduct of a service provider it is logical that the CCG would impose upon the service provider obligations which mirror those to which the CCG is subject. If a CCG considers that the conduct of an ACO is inconsistent with the statutory functions of the CCG it has enforcement powers to bring the ACO back into compliance. In this way the CCG can ensure performance of its statutory functions.

The third question is whether the ACO policy would prevent the CCG from performing the needs assessments which are contemplated by section 3 NHSA 2006 and/or involve an unlawful delegation to the ACO of this (non-delegable) task? Pursuant to section 3 CCGs must arrange for the provision of health services “… to such extent as it considers necessary to meet the reasonable requirements of the persons for whom it has responsibility”. This indicates that before a CCG engages in any commissioning exercise it must, already, have formed its considered opinion as to the reasonable local need. Logically, this assessment precedes the act of commissioning because absent that assessment of need a CCG would not be in a position to know how to formulate a tender document for the procurement process which is designed to meet the need. Accordingly, it is a duty which operates independently of the ACO contract. However it is a continuing duty and, under the ACO contract, the ACO is also required to conduct needs assessments. This fact alone does not mean that a CCG that uses the ACO model contract has either dis-enabled itself from conducting the section 3 assessments or delegated them to an ACO. The replication of the section 3 obligation in the draft contract ensures that the ACO conducts proper assessments and is able to furnish the CCG with data and information so that the CCG can, then, form its own independent judgment about need.

The Claimants object that under the ACO model the ACO will take “most” of the decisions relevant to care and budgeting for care. In fact, an ACO will, by definition, take all of the decisions necessary to provide the services it has contracted to provide. If the ACO contract reflects the max version then it would follow that the ACO will inevitably take the preponderant part of the decisions relating to health care and related budgetary matters. The only decisions that the ACO will not take will be those which the CCG is bound to take by reason of the retention of the statutory functions. The issue as to the number or extent of the decisions to be taken by an ACO is therefore a function of the extent of the ACO contract itself. The more “max” the contract the greater the decision-making role of the ACO. If the “max” version is lawful the extent of the consequential decision making is subsumed within that legality.

Applying the above principles to the ACO policy:

The issue

I turn now to Issue III. The Claimants articulate the issue in their written submissions in the following way:

“… a high standard of certainty, transparency and clarity is required in the context of policy-making and decision-making regarding the structural reorganisation of the NHS, the potential abolition of the internal market, the potential for the dissolution of health and social care boundaries and the transfer to non-statutory, unaccountable (and potentially private) bodies of the responsibility for decision-making about resource allocation and the design of care. These are all vitally important matters affecting services that are of the highest concern to the public. Yet the Claimants (as well-informed and knowledgeable individuals) have had to try to piece together the picture from a range of different sources and there is an absence of clear information about the precise nature of ACOs.”

In support the Claimants cite well known case law. From that case law a number of propositions flow:

The Claimants found their challenge upon the following chronology.

Ms Richards QC argued that there was a dearth of explanation as to: what the ACO’s role would be in decisions about resource allocation or the design of care; how the limits and parameters between the functions of the CCG and those of the ACO would be drawn; how this would work in practice; the statutory basis on which the transfer of functions to ACOs would be effected; the legal entities that could be ACOs and whether there would be any restrictions on the same; what measures would be put in place to ensure effective governance, transparency and public accountability of ACOs; the risks which they might pose and how to mitigate those risks; and, how integration/dissolution of health and social care boundaries would be achieved when there was a different funding, population, and statutory basis for health and social care.

The Secretary State developed the arguments in response on behalf of both Defendants. Mr Sheldon QC argued that in Justice for Health (ibid) the Court summarised the state of the law (cf paragraph [141]). In that paragraph I stated:

“141.

The principle of transparency has evolved out of Strasbourg jurisprudence, but it is now well established as a common law principle. It is said to amount to a component of the "rule of law" and the principle of "legal certainty". In Nadarajah v Secretary of State for the Home Department [2005] EWCA Civ 363 at [68] Lord Justice Laws stated that it was a "requirement of good administration" (to which the courts would give effect) that "public bodies ought to deal straightforwardly and consistently with the public". The principle serves a number of important purposes. A law or policy should be sufficiently clear to enable those affected by it to regulate their conduct i.e. to avoid being misled. Such a law or policy should also be sufficiently clear so as to obviate the risk that a public authority can act in an arbitrary way which interferes with fundamental rights of an individual. Clear notice of a policy or decision is also required so that the individual knows the criteria that are being applied and is able to both make meaningful representations to the decision maker before the decision is taken and subsequently to challenge an adverse decision (for instance by showing that the reasons include irrelevant matters). Where the principle applies it might require the publication of the policy that a decision maker is exercising; it might require that the policy be spelled out in greater detail so that the limits of a discretion may be demarcated; it might require the decision-maker to be more specific as to when he/she will or will not act.”

Mr Sheldon QC argued that this expression of principle was not disputed subject to two caveats: First, the principle applies only to final decisions and not therefore to statements or policies which were in the course of formulation and evolution and thereby in a state of flux; and second, that the duty at common law applied only to decisions which address “fundamental” or “constitutional rights”, but not other rights, such as commercial or contractual rights. Mr Sheldon QC drew my attention to the interesting article written by Mr Christopher Knight (his junior in Justice for Health): “Clarifying the opacity of transparency” [2018] PL 201. There, Mr Knight argues that if (as he considers should be the case) the principle applies only to fundamental or constitutional decisions then it should not have been applied to the junior doctors contractual rights which were in issue in Justice for Health. Though he does accept that if it goes beyond such cases it has “less to offer in more mundane scenarios”. Mr Sheldon QC extrapolates and says that the duty does not apply at all to the rights of patients or others under the NHSA 2006. Mr Knight also expressed the view that it was a matter of “regret” that in Justice for Health I had not articulated the standard of review. Mr Sheldon QC argued that, where the principle does apply, the standard to be applied was a classic broad reasonableness test.

On the alternative premise that the principle does apply then, contrary to the Claimants’ arguments, Mr Sheldon QC argued that the descriptions of the ACO policy in published documents and in particular the draft ACO model contract were perfectly clear and transparent. The main audience for these publications was commissioners and service providers who might seek to conclude ACO contracts. They fully understood what an ACO was. Indeed, even doctors know: this was evident from, inter alia, a detailed submission drafted by the BMA in February 2018 which set out various concerns arising but which, when read as a whole, made perfectly clear that the BMA had fully understood what an ACO was and how it worked. As a laboratory test of whether a reasonably informed body would understand, this was compelling evidence.

I start by addressing the points of principle and scope raised by the Secretary of State. First, I do not accept that the scope of the principle applies only to decisions or policies raising fundamental rights and/or which are of constitutional importance. No doubt these may be prime illustrations of when the duties should be engaged but they are not exhaustive of the scope of the principle. In Justice for Health (ibid) I found that the principle applied to a decision about a standard form of employment contract that junior doctors were being offered. In Richmond Pharmacology (ibid) Mr Justice Jay also applied the principle outside the context of fundamental and constitutional rights and obligations. I can find no basis in law or logic for the distinction that Mr Sheldon QC seeks to draw. If it were correct then in relation to swathes of governmental activity that impinges – often profoundly - upon the economic life of society there would be no duty to act in a clear and transparent manner. And in the equally vast arena of social care there would be no such duty, at least not unless the decision or policy in question impacted upon fundamental rights. Decisions governing fundamental and constitutional rights are only a portion of the decisions which can be categorised as important or far reaching or profound. The contracts in the Justice for Health case affected an entire cohort of doctors from the newly qualified through to those approaching consultant status and were unquestionably important and far-reaching. No argument has been advanced which adequately explains what logic there is in limiting the principle in the manner suggested.

Second, the Defendants’ arguments proceed upon the assumption that “fundamental” and “constitutional” rights are readily defined categories with fixed and discernible boundaries; but they are not. It is of course possible to resort to measures such as the Human Rights Act as one source of fundamental or even constitution rights, but the category goes wider. Any attempt to pin down the duty of transparency and clarity to pre-ordained fixed categories would dilute the duty for no logical reason and risk satellite disputes as to whether the underlying right was one which could be classified as fundamental or constitutional.

Third, the argument is, moreover, inconsistent with the law relating to consultations where a guiding principle is that the propositions being consulted about should be set out with sufficient clarity to enable those being consulted to understand the propositions and make meaningful responses. This principle applies to all consultations and not just those relating to fundamental or constitutional rights. In R (Moseley) v London Borough of Haringey [2014] UKSC 56 (“Moseley”) the Supreme Court held that the lawfulness of a consultation was to be judged by reference to whether there was compliance with one or more of four governing criteria.   These were set out in the judgment of Lord Wilson who approved the “Sedley criteria” which had been endorsed by the Court of Appeal is a series of earlier cases: R v Brent London Borough Council, ex p Gunning, (1985) 84 LGR 168 (“Gunning”) per Hodgson J at page 189;  R v Devon County Council, ex parte Baker[1995] 1 All ER 73 at pages [87] and [91];  R v North and East Devon Health Authority, ex parte Coughlan[2001] QB 213 at paragraph [108]; and, R (Royal Brompton and Harefield NHS Foundation Trust) v Joint Committee of Primary Care Trusts[2012] EWCA Civ 472 (“Royal Brompton”), at paragraph [9]. The criteria concern: (i) the point in time at which the consultation must occur; (ii) the sufficiency and clarity of the reasons enabling the addressee to understand how to respond; (iii) the sufficiency of the time granted to enable proper responses; and (iv), the taking into account of the facts and matters submitted by consultees. Lord Wilson endorsed the observation in Royal Brompton that these criteria were “a prescription for fairness".  Whether the criteria were infringed would always be highly fact specific. In Coughlan (ibid at paragraph [112]) Lord Woolf MR explained that one aspect of a proper consultation was clarity (his view was approved of by Lord Wilson in Moseley): 

"It has to be remembered that consultation is not litigation: the consulting authority is not required to publicise every submission it receives or (absent some statutory obligation) to disclose all its advice. Its obligation is to let those who have a potential interest in the subject matter know in clear terms what the proposal is and exactly why it is under positive consideration, telling them enough (which may be a good deal) to enable them to make an intelligent response. The obligation, although it may be quite onerous, goes no further than this."

(Emphasis added)

The short point is that the duty to act with adequate clarity in a (afortiori transparent) consultation applies to all consultations and is not limited to those affecting fundamental and constitutional rights. I can see no meaningful difference in principle between the application of the principle in the field of consultations and the application of those same principles in other areas of decision and policy making.

As to the standard to be applied I accept, broadly, Mr Sheldon QC’s test of reasonableness. But this does not in fact say very much since what is reasonable will be fact and context specific; which was the nub of the point I made in paragraph [141] of Justice of Health (see paragraph [120] above). The extent of the duty will depend upon what the publication or promulgation is intended to achieve. For instance, a consultation document must contain sufficient detail to enable addressees to be able to respond. A statement of policy must (at the least) enable those either subject to the policy or affected by it to be aware of its salient terms and components so that they know how to adjust their conduct. The public body promulgating the document has a discretion but there are nonetheless benchmarks of adequacy against which the clarity and transparency of that publication can be measured. The extent of the duty is also affected by the identity and nature of addressees. A highly sophisticated and knowledgeable target audience might need less explanation than a lay audience and might also be unaffected by (otherwise culpable) omissions: See Moseley (ibid) as applied in Hutchinson 3G and others v Office of Communication [2017] EWHC 3376 (Admin) at paragraphs [220]-[229]; and see also B v Secretary of State for Works and Pensions [2005] EWCA Civ 929 at paragraph [43] per Sedley LJ.

As explained above the principle applies outside of fundamental and constitutional rights and there is no reason why it should not apply to health policy. The argument of the Secretary of State to the contrary, as Ms Richards QC pointed out, must be seen in the context of Principle 7 of the NHS Constitution. This instrument is said to embody the “principles and values that bind together the communities and people its serves – patients and public and the staff who work for it”. Principle 7 provides:

7.

The NHS is accountable to the public, communities and patients that it serves

The NHS is a national service funded through national taxation, and it is the government which sets the framework for the NHS and which is accountable to Parliament for its operation. However, most decisions in the NHS, especially those about the treatment of individuals and the detailed organisation of services, are rightly taken by the local NHS and by patients with their clinicians. The system of responsibility and accountability for taking decisions in the NHS should be transparent and clear to the public, patients and staff. The government will ensure that there is always a clear and up-to-date statement of NHS accountability for this purpose.

(Emphasis added)

The Constitution also states:

“Patients and the public: your rights and the NHS pledges to you

Everyone who uses the NHS should understand what legal rights they have. For this reason, important legal rights are summarised in this Constitution and explained in more detail in the Handbook to the NHS Constitution, which also explains what you can do if you think you have not received what is rightfully yours. This summary does not alter your legal rights.

The Constitution also contains pledges that the NHS is committed to achieve. Pledges go above and beyond legal rights. This means that pledges are not legally binding but represent a commitment by the NHS to provide comprehensive high quality services.”

The NHSA 2006 requires NHS England and CCGs to exercise their functions “with a view to ensuring that health services are provide in a way which promotes the NHS Constitution”: cf Sections 13C (NHS England) and 14P (CCGs). Section 1B requires the Secretary of State to “have regard” to the NHS Constitution when exercising functions in relation to health services. I find it difficult to understand how in such circumstances it can be argued that there is no duty imposed upon the Defendants to act accountably, clearly and transparently (as promised in the NHS Constitution) in relation to what by common accord is intended to amount to radical and transformational changes in the way in which health and social care is delivered.

Where I do agree with the Secretary of State is in the proposition that neither component of the principle (clarity and/or transparency) should become engaged until an appropriate point in time at which the policy, decision or other instrument or publication is (for want of better terminology) sufficiently mature or ripe.

Prior to this point being reached the public authority should have a wide leeway to moot proposals, brainstorm, take soundings, play devil’s advocate, work up and then reject ideas, try out different texts or drafting proposals and then discard them, and even make mistakes, all without fear that inadequacies or infelicities of drafting will be criticised and subjected to litigation risk. It does not in my view make sense to apply a justiciable duty of clarity at a point at which clarity, whether of expression or otherwise, is not possible or necessarily even desirable. And it is equally impracticable to say that the internal iterative and incremental process of policy formulation should be subjected to a duty of transparency. There is only a purpose in decision and policy makers subjecting their thought processes to public gaze when they have achieved sufficient ripeness. I accept Mr Sheldon QC’s broader point that to impose the duty at too early a point could exert a chilling impact upon decision making and policy formulation.

I add a word of caution: In this judgment I am not seeking to define the point at which ripeness or maturity is reached. This may well be highly context specific. There may, for instance, be differences as between the announcement of a policy or the promulgation of a document for consultation or the adoption of a provisional decision (for instance of a regulatory nature addressed to an undertaking so that it can exercise rights of defence prior to the adoption of a final and potentially adverse decision) or a final decision, etc. Equally, I am not suggesting that there is no scope at all for transparency and clarity to apply before the stage of ripeness or maturity: for instance, where the public body is subject to a freedom of information act request or where corruption or dishonesty is uncovered.

I therefore confine my conclusion to the facts of this case. In this case the Defendants first put their proposals on the table in August 2017 and, prima facie, they would then have been subject to the principle of clarity and transparency. But for a variety of perfectly understandable reasons the Defendants have now retreated to a pre-consultation phase. I am not minded to express any view on the application of the principle to the ACO policy as of August 2017 and continuing until the Defendants retreated to the position of the pre-consultation stage. There would be no utility in that; it is water under the bridge. But as matters presently stand I do not see material scope for the application of the clarity and transparency principle. The Defendants are awaiting the outcome of this litigation; they will then formulate the consultation paper and promulgate it. I assume that the consultation document will be informed by the arguments and evidence which have emerged in this case. As such the details to be consulted over remain work in progress. When the consultation is initiated the usual principles governing consultations will apply. At that point all the arguments and points which the Claimants wish to make can be advanced and the Defendants will be under a duty to consider them.

For these reasons the point has not yet been reached when the principle applies and this ground of challenge necessarily fails.

I turn now to the Defendants’ argument about prematurity. This is linked to the arguments about clarity and transparency. But it does not wholly overlap since I have not held that the Ground relating to vires is premature. Given that I have addressed the two substantive issues arising I summarise my reasons on this relatively briefly.

There is force in the Defendants’ submissions that the bringing of this judicial review is premature and that, given that the Defendants are now committed to a consultation, the Claimants and other interested persons should await the initiation of that consultation and then advance their concerns and then await the outcome of the consultation to decide whether there are at that stage grounds for judicial review.

However, there is one identifiable issue of law which has arisen as between the parties which focuses upon the lawful power of the Defendants to adopt the ACO policy. If the Claimants had been correct it would have had the effect of rendering the consultation pointless and based upon a false legal premise (that the ACO model was lawful). Although the issuance of the consultation has been postponed it remains the intention of the Defendants to consult on the proposal including its max version. And it is inherently unlikely (and not suggested) that the consultation would start by asking the question: Is the proposed ACO contract lawful? A Government department or agency putting out a proposal for consultation will have, by that point in time, taken its own legal advice and be presenting options to the public upon the premise that they are all lawful.

I draw a distinction between this narrow but important issue of law and the many other perfectly good and sensible questions that have been raised and articulated in the Claimants’ witness statements and submissions about the ACO policy and the limitations of the terms and conditions in the draft ACO model. These can, and properly should, be raised in the course of the consultation. In particular it seems to me that the Defendants would be wise to consult on the adequacy of the provisions in the draft ACO model contract which are designed to ensure that CCGs do have adequate on-going powers of supervision, monitoring and enforcement.

Moreover, the issue is sufficiently crystallised that I have been able to express a conclusion. I have been able to delineate the ACO policy. If I had considered that the proposal was inchoate or subject to such a degree of change that the policy was incapable of proper identification, then my conclusion would almost certainly have been different.

Finally, I am not seeking to provide any sort of advisory judgment. Dealing with the matter now upon the basis of the very full and helpful written and oral submissions that I have received has enabled me to conclude that the ACO policy is lawful. I consider that in the circumstances of the case there is real utility in determining the point; it is not by any means academic. Having said this I recognise that the terms of the draft ACO model contract could change as a result of the planned consultation. This judgment does not in any way prevent or preclude any changes considered appropriate.

It follows that in relation to the core issue in this case (Issue II), concerning the vires of the ACO policy, that the claim was not premature. As set out in relation to issue III, I take a different view in relation to the ground concerning the application of the principle of clarity and transparency.

Next, the Defendants argue that not only is the application premature, but it is also late in that the present ACO draft was first promulgated in August 2017 and the Claim was issued some weeks outside of the 3 month limitation period under CPR 54.5(1). I do not accept this objection.

First, between August 2017 when NHS England first published its draft ACO contract and supporting information a considerable amount of water passed under the policy bridge including disagreements as between NHS England and the Secretary of State about the draft implementing regulations; about whether the ACO model was capable of being used by early adopters; and, as to the nature and extent of the consultation. All of these matters were the subject of prompt correspondence between the Claimants and the Defendants. Whilst strictly the claim was more than three months after the initial NHS England publication in August 2017 it was within three months of the Secretary of State’s draft regulations and the disagreement between the Defendants as to the scope of the role of an ACO and as to various statements by the Defendants as what it was that was to be consulted over. This was, fairly analysed, a moving target. In my view it is artificial and not conducive to justice to say that in these circumstances there was delay.

Second, if I am wrong in this I would have readily have granted an extension of time. There has been no prejudice to the Defendants in any (slight) delay which might have occurred. The issues are undoubtedly important. Permission has been granted. The points have been fully argued. There is utility in the determination of the issues.

Finally, NHS England argues that the Claimants’ standing is relevant to the court’s discretion to grant relief (see Walton v Scottish Ministers [2012] UKSC 44 at paragraphs [95] and [103]). The Claimants do not have “sufficient interest” in the matters identified by them as the subject matter of their claim. The Claimants allege general personal experience and interest in the NHS but these connections are too vague, generalised and inchoate to be sufficient for the purposes of launching and maintaining such a challenge as this. The true nature of the Claimants’ interests is political. The Claimants have used the media to draw public attention to the claim. Judicial review is not apt for the resolution of these concerns.

I do not accept this objection.

First, the Claimants are all persons who work in the NHS and/or are intimately interested by developments in the NHS. Their professional and/or personal lives could be affected by the emergence of ACOs as the NHS Constitution expressly refers. The Claim concerns a matter of national importance. In such matters the Courts are slow to deny access to persons seeking to raise arguable grounds of review.

Second, permission has been granted and it was recognised at the permission stage that the case raises issues of wide importance. In R (Chandler) v Secretary of State for Children, Schools & Families [2009] EWCA Civ 1011 at paragraph [77] per Arden LJ it was stated that:

"… where permission to bring judicial review proceedings has been given, then, unless it is appropriate to deal with standing as a preliminary issue, there is likely to be little point in spending valuable court time and costs on the issue of standing.  In that situation, we would not encourage the court to embark on a complex argument about standing".

Third, case law shows that locus is not denied to a legal person simply because it is a representative body, at least where declaratory relief is being sought. In R v Secretary of State for Employment Ex p. Equal Opportunities Commission [1995] 1 AC 1 (hereafter "EOC") the House of Lords considered the locus of the EOC which brought proceedings by way of judicial review for a declaration that provisions of the Employment Protection (Consolidation) Act 1978 (that limited the rights of employees not to be unfairly dismissed and to redundancy pay to those employees working continuously for a specified number of years and hours a week and excluded altogether those working less than 8 hours a week) were unlawful. It was submitted that this regime discriminated against women because considerably more women than men worked part-time. The EOC sought a declaration in broad terms that the United Kingdom was in breach of its obligations under Article 119 of the EEC Treaty and the Equal Pay Directive. The Secretary of State contended that the EOC had no locus to proceed. Lord Keith delivered a judgment with whom the remainder of the Committee (save Lord Jauncey) agreed. He held that the EOC had locus:

"In my opinion it would be a very retrograde step now to hold that the EOC has no locusstandi to agitate in judicial review proceedings questions related to sex discrimination which are of public importance and affect a large section of the population. The determination of this issue turns essentially upon a consideration of the statutory duties and public law role of the EOC as regards which no helpful guidance is to be gathered from decided cases. I would hold that the EOC has sufficient interest to bring these proceedings and hence the necessary locusstandi".

In R (on the application of Save Our Surgery Limited) v Joint Committee of Primary Care Trusts [2013] EWHC 439 (Admin) ("Save Our Surgery") Nicola Davies J was required to rule upon the locus of a corporate vehicle incorporated for bringing the claim for judicial review challenging a consultation process which led to a decision to close a hospital. The Defendant submitted that the claim should be dismissed because the Claimant had an insufficient interest: the Claimant was a shell company formed solely for the litigation; it had taken no part in the consultation process; it had no involvement in the provision of paediatric cardiac services; and, it was not affected by the decision which it sought to challenge. At paragraphs [101] and [102] Nicola Davies J rejected this submission:

"101.

The claimant contends that it has sufficient interest. Sufficient interest is the remedy afforded by judicial review; in this case the quashing of the reconfiguration decision on the grounds that the consultation process was unfair and flawed. The claimant plainly has an interest in that remedy. The majority, if not all of the individuals who have contributed to the fighting fund, together with the Directors of the claimant, would have a direct sufficient interest in their own right had they brought the claim as individuals. Some of those individuals are clinicians, others are members of the public. The adverse costs in litigation are such that no citizen of ordinary means would prudently contemplate bringing this litigation as an individual. Incorporation was and is the proper means of allowing the interests of a substantial number of persons who consider the defendant's position to be unfair and unlawful to be jointly represented. There is no better placed challenger, in fact there is no other challenger.

102.

I am satisfied that the claimant has sufficient interest in these proceedings. The claimant represents many individuals who have contributed financially in order to bring these proceedings. It includes individuals who have been or could be directly affected by the closure of the Leeds Unit and clinicians who work within the unit. Incorporation, following the intervention of the Charity Commission, was a proper means of allowing the interests of a substantial number of such persons to pursue this litigation".

In Miller and others v The Secretary of State for Exiting the European Union [2016] EWHC 2768 the Divisional Court (in the context of the Article 50 litigation) held, in relation to locus that the breadth of the issue being adjudicated upon was potentially capable of affecting the legal rights of almost everyone in the United Kingdom or with British citizenship:

“7.

It is not difficult to identify people with standing to bring the challenge since virtually everyone in the United Kingdom or with British citizenship will, as we explain at paragraphs 58 and following, have their legal rights affected if notice is given under Article 50. The claimants and interested parties comprise a range of people whose interests are potentially affected in different ways.”

The Claimants are not a single legal representative “body” but they reflect and represent a wide community of like-minded professionals within the NHS. They have raised serious and important points which affect them and others as professionals and as actual or potential patients.

As to the objection that the Claimants’ interest is political, the fact that the Claimants might have a “political” interest (whatever that means) is irrelevant. The Claimants have been vigilant to focus their analysis and submissions upon matters of law. They made it clear in the opening paragraphs of their written submissions that their complaints were applicable regardless of the merits of the ACO model and Ms Richards QC carried this through into her oral submissions. The mere existence of a background “political” interest is neither here nor there; indeed, it is routine in cases before the Administrative Court that the parties have some sort of a “political” concern that exists away from the Court, but this has no bearing upon the issues of law to be resolved inside the Court.

In my judgment the Claimants had clear locus to bring this claim.

For all the above reasons the claim for judicial review is dismissed.