NHS’s financial problems need one solution, not many

No mention of rationing or co-payments… this means the eventual solution will be more knee-jerk and less debated, and NHSreality feels the solution proposed will not be based on philosophical and moral/ethical criteria. Meanwhile denial will continue.. and rural areas will suffer….and the charities will deliver more core services

Image result for financial problems cartoon

Chris Hopson reports 24th July 2015: NHS’s financial problems need one solution, not many – A collaborative approach is needed between local and national systems to ensure the NHS stays within its 2015-16 budget

The latest evidence, such as the King’s Fund Quarterly Monitoring Report (QMR) published last week, shows that the NHS faces a significantly more difficult challenge to stay within its budget this year than it did last year.

There are a number of possible responses from NHS frontline leaders to this problem. One would be, “The only way we can manage 2015-16 without the system crashing is for the government to inject more money and admit the current challenge is undeliverable”. Another might be, “Making the NHS numbers add up is a system level responsibility of the department of health and the arm’s length bodies, not ours”. A third would be, “We can only deliver by forgetting about everyone else and sorting out our own problems”. These responses are understandable and justifiable, but they ignore the risk the NHS runs by missing its 2015-16 targets. The NHS, along with social care, is the only public service to experience 4% increases in demand annually. But it’s also the only one to have the combination of its budget being ring-fenced; an extra £2bn-ish for 2015-16 in the autumn statement; and the promise of real terms growth for the remainder of the parliament. Other Whitehall departments have had to contribute £3bn of in-year savings in 2015-16, admittedly boosted by a £200m raid on public health budgets. So the government has said there is no more money for the NHS in 2015-16.

Failure by the NHS to stay within its 2015-16 budget would risk a crisis of confidence in central government and across Whitehall. We need to be alert to the arguments that others will make. If the NHS can’t deliver financial balance with all these advantages, why put more money in? Why frontload the NHS’s extra £8bn (which we desperately need)? Let the NHS demonstrate appropriate financial discipline first. Why bother investing in an NHS transformation fund if the health service will always be a bottomless money pit that cannot transform? There have already been mutterings of this kind in the national media.

So there is a strong argument for the need for a concerted one NHS solution to a large one NHS problem – a collective responsibility and shared endeavour to ensure the health service stays within its budget. Our members tell us they need a number of things from national system leaders if they are to apply the in-year spending handbrake quickly and sharply.

They note that in many places there is a significant gap between commissioner and provider activity plans and budgets, which suggests that not all the extra autumn statement money is reaching the provider frontline as planned. This needs to be bottomed out quickly. System leaders are placing a lot of reliance on new agency staffing controls to reduce staffing spend but the QMR shows this may be overoptimistic. Our members tell us they need clearer and more obvious signals around the staffing/finance balance if they are to recalibrate in favour of the latter. They need to know that they won’t be at regulatory risk if they make sensible judgments to ensure this recalibration while continuing to deliver the right quality of care.

Our members tell us they could also look at delaying capital expenditure, which could be turned into local revenue. They also say it’s important for system leaders to be role models for the right behaviours – for example, by rapid vacancy control and delaying non-essential spending across the department and its arm’s length bodies.

The Five Year Forward View talks about the importance of a new relationship in which the national NHS system supports local leaders. A collaborative local-national partnership to ensure the NHS delivers its 2015-16 budget would be a great place to start.

This entry was posted in A Personal View, Post Code Lottery, Professionals, Rationing, Stories in the Media on by .

About Roger Burns - retired GP

I am a retired GP and medical educator. I have supported patient participation throughout my career, and my practice, St Thomas; Surgery, has had a longstanding and active Patient Participation Group (PPG). I support the idea of Community Health Councils, although I feel they should be funded at arms length from government. I have taught GP trainees for 30 years, and been a Programme Director for GP training in Pembrokeshire 20 years. I served on the Pembrokeshire LHG and LHB for a total of 10 years. I completed an MBA in 1996, and I along with most others, never had an exit interview from any job in the NHS! I completed an MBA in 1996, and was a runner up for the Adam Smith prize for economy and efficiency in government in that year. This was owing to a suggestion (St Thomas' Mutual) that practices had incentives for saving by being allowed to buy rationed out services in the following year.

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