Policy paper

Health Bill: oversight of the health system - fact sheet

Published 19 May 2026

Applies to England

Introduction

This document explains how the Department of Health and Social Care (DHSC) will set direction and maintain oversight of the health system, once NHS England has been abolished.

Background

As outlined in the 10 Year Health Plan for England, through this legislation and other interventions, the government is giving organisations throughout the health system clearer roles and more focused accountabilities. This applies to both national and local organisations. We will remove the duplication and blurred responsibilities that exist between DHSC and NHS England by abolishing NHS England and moving its functions to integrated care boards (ICBs) or the Secretary of State (to be exercised through the restructured DHSC).

For national level functions, this will strengthen accountability to Parliament as ministers will be clearly and unambiguously responsible for those functions. The Secretary of State for Health and Social Care will take on responsibilities that previously sat with NHS England. DHSC will work through 7 regional teams (East of England, London, Midlands, Northeast and Yorkshire, North West, South East, South West) to manage day‑to‑day relationships with local NHS organisations.

The reforms will also support ICBs, which will be responsible, as strategic commissioners, for planning most local NHS services. The Secretary of State will have new powers which will complement and support local autonomy by:

• setting clear national standards linked to ICBs’ functions
• strengthening financial responsibility
• improving oversight and accountability of NHS providers

Overall, the changes will make the health system simpler, more consistent and more financially sustainable, freeing local organisations to focus on improving outcomes for patients, families, carers and communities.

Objectives of the bill

The Health Bill (‘the bill’) will transfer and reform the main functions and powers NHS England currently holds in its role overseeing the NHS to the Secretary of State. This includes:

• transferring responsibility for NHS England’s ICB accountability functions to the Secretary of State including with respect to appointments, guidance and oversight. The bill will also introduce a new general power of direction with respect to the exercise of ICB functions and create a power for the Secretary of State to direct ICBs to take on Secretary of State delegated functions
• transferring responsibility for NHS England’s provider regulation functions to the Secretary of State including with respect to the provider licence and foundation trust authorisation, appointments and creating a new power to convert foundation trusts to trusts
• transferring NHS England’s responsibilities for financial directions and resource allocation to the Secretary of State including amendments to support Better Care Fund reform

See Health Bill: roles and functions of the restructured DHSC - fact sheet, Health Bill: ICBs as strategic commissioners - fact sheet and Health Bill: providers - fact sheet for more information.

As numerous reports and consistent feedback from NHS organisations have shown, the system has been hampered by an excess of ineffectual supervision and oversight. By contrast, the restructured DHSC will provide proportionate, targeted and impactful oversight and intervention. The bill, alongside other changes we are making, will help to ensure that we get the balance right between local freedom and innovation, especially for the highest performing and/or best led organisations, and national support and intervention where needed. This will require significant change at local and national levels.

The bill provides for the incorporation of many of NHS England’s functions into the department by making them functions for which the Secretary of State is statutorily responsible. In parallel we are reforming the way those functions are discharged so that the new DHSC (including those functions taken from NHS England) operates in a fundamentally different way from now. The bill therefore creates a proportionate legislative framework for the Secretary of State to ensure standards are upheld nationwide, without stifling local innovation and leadership - further autonomy will be a reward for high performance and strong leadership.

Improved oversight and accountability of ICBs

We expect ICBs to ensure the consistent delivery of national standards. For the most part this is best secured not through national action or direction but through local innovation and commissioning services in line with local needs. Our strongly local approach will be complemented by the use, where necessary, of the Secretary of State’s general power of direction over how ICBs exercise their functions.

A direction creates a public law duty that ICBs will be required to follow. Directions may be issued by the Secretary of State to one ICB, several ICBs or all ICBs. These powers will support the effective day-to-day operations of ICBs and will be used to set and update national standards relating to ICB commissioning functions. This is particularly important in specialised commissioning, where services are often complex or clinically sensitive and standards may need to be refined frequently. This will also allow the Secretary of State to intervene in a situation where an ICB is at risk of failure or is failing to discharge any of its functions.

There will be explicit exceptions which relate to areas where it is not appropriate for the Secretary of State to intervene, as well as areas where there is an existing process which means there is no need for a power of direction. These exceptions include:

• using the power in relation to the appointment of a particular individual
• intervening in individual clinical decisions
• intervening in any drugs, treatments or diagnostic technique where the direction is inconsistent with National Institute for Health and Care Excellence (NICE) recommendations or guidance

As a consequence of the transfer of functions, the Secretary of State will take on NHS England’s existing responsibilities regarding ICB appointments and oversight. The bill will also enable the Secretary of State to provide guidance to ICBs on their board membership.

Alongside the general power of direction over ICBs, the bill will expand the existing power that allows the Secretary of State to delegate their public health functions to ICBs, to include all of the Secretary of State’s health service functions. The ability to delegate is an important tool to ensure national oversight, while retaining flexibility to ensure functions are operationally delivered by the most appropriate local body. It allows health organisations to work together to provide services for their patients and supports integration at a local level so functions and services are best tailored to meet local needs and demands.

See the ‘Health Bill: ICBs as strategic commissioners - fact sheet’ for more information on the changes to ICBs through the bill.

Oversight and accountability of providers

The 10 Year Health Plan outlined a vision of an empowered NHS, at the forefront of a reinvigorated and reinvented foundation trust model. Critical to the success of this is proportionate national oversight, enabling a culture of improvement among providers. To achieve this, NHS England’s existing provider oversight functions will be updated and transferred to the Secretary of State.

NHS England currently oversees the provider licence regime for NHS trusts, NHS foundation trusts and independent providers. The provider licence is a core regulatory tool that sets conditions underpinning the delivery of NHS services that providers must comply with. Following the abolition of NHS England, this oversight function will transfer to the Secretary of State. The bill will also add a new purpose for setting or modifying provider licence conditions to ensure compliance with existing legislation.  

In line with the removal of the requirement for NHS foundation trusts to have councils of governors, most of the existing governance functions of council of governors will be transferred to the Secretary of State. This will include appointing and removing the chair and non-executive directors, and approving chair and non-executive director remuneration. The approach for how the appointments processes will be delivered by the restructured DHSC is being developed and details of the appointments process will be published in due course.

Foundation trust chief executive officer (CEO) appointments will be the responsibility of foundation trusts’ non-executive directors through the trust’s appointment committee, which approves other executive director appointments. NHS England currently has no role in CEO appointments at NHS trusts, and the Secretary of State will play no role in this in the future.

See ‘Health Bill: providers - fact sheet’ for more information on the changes to providers through the bill.

Improve financial direction and resource allocation

With the abolition of NHS England, changes to the role of ICBs and the removal of local system balance requirements, we are placing increased emphasis on financial accountability at both an individual provider level and ICB level. DHSC will therefore need the appropriate backstop tools to maintain effective oversight and financial discipline across the NHS, and ensure overall spending remains within the limits set by Parliament.

Current legislation provides powers to set controls on both revenue and capital expenditure for ICBs and NHS trusts, and the capital expenditure for NHS foundation trusts. These powers will transfer to the Secretary of State. To bridge the gap in the national centre’s oversight framework, the power to impose limits on the capital expenditure of NHS foundation trusts will be extended so it may also cover revenue expenditure. The existing power to control NHS foundation trusts’ capital expenditure has never been exercised, and likewise, the proposed expansion of the power so that it may apply to oversee revenue expenditure will be used only as a last resort in exceptional circumstances.

For ICBs, NHS England currently sets and adjusts the annual funding allocations. These powers will transfer to the Secretary of State. The Secretary of State will take on NHS England powers to impose financial requirements on ICBs so that they can be held to account for their financial performance. This will ensure the national centre continues to have the necessary statutory tools to set budgets for ICBs for each financial year and hold them to account for the financial performance to ensure the government can maintain effective financial oversight across the system.

Alongside holding ICBs to account for financial performance, the Secretary of State will assume the power currently held by NHS England to direct ICBs to ringfence funding for service integration. Currently, funding directed towards service integration (for example through the Better Care Fund) must be placed into a pooled budget between the ICB and their local authority partners. The bill will amend this requirement so that the decision on whether service integration funding must be pooled will be at the discretion of the Secretary of State on an annual basis. This will introduce greater flexibility as the Better Care Fund is reformed, allowing DHSC to determine when pooled budgets are the most effective mechanism for joint delivery, and when alternative approaches may be more appropriate. The option for local areas to voluntarily enter into a Section 75 agreement would remain.