This Spending Review needs honesty and realism, not panic and denial

The deteriorating state of NHS finances is leading to panic and denial in Whitehall. Panic best describes the mood in the Department of Health, where the prospect of a £2 billion deficit among providers is of growing concern. While some of the forecast deficit may be reduced by commissioner underspends and capital-to-revenue transfers, it is inconceivable that it can be eliminated by the end of the financial year.

Over the road in the Treasury there is denial about the scale of the problem, in part because of a belief that the NHS is receiving more favourable treatment than most other public services. Why, it is argued, can the NHS not get its own house in order when its budget is not only protected but also continues to increase in real terms? Denial is also borne of a belief that the Chancellor is not for turning when deficit reduction is the government’s overriding priority.

The NHS’s national leaders find themselves in a difficult position, with the government having committed to finding the £8 billion additional funding identified in the NHS five year forward view by 2020/21. Health Secretary Jeremy Hunt has argued, with some justification, that this commitment means the government is willing to fund ‘the NHS’s own plan’. The difficulty with this argument, of course, is that the Forward View is NHS England’s plan,  supported by other national bodies, not that of the NHS itself. It is based on the heroic assumption that £22 billion of productivity gains can be made in this parliament.

Conflict over the tariff and the funding of specialised services in particular is widening the gulf between national and local leaders in the NHS. The result is an uneasy alliance between George Osborne, Jeremy Hunt and Simon Stevens – who came together to put their weight behind the Forward View – and growing opposition from NHS providers and the organisations that speak for them. The unanswered question is where David Cameron is positioned in this debate, given his frequently expressed personal commitment to the NHS but also his close relationships with the Chancellor and the Health Secretary.

The answer may not be known until the conclusion of the Spending Review in November. The Fund has argued that the NHS will need an emergency injection of funding this year to deal with forecast deficits, perhaps amounting to £1 billion. The Spending Review would provide an opportunity to announce this funding, but it is more likely that the government will seek to ride out the storm in the hope that controls on the agency staff and management consultants and pressure to increase productivity will bring spending back in line with available funding.

If more funding is not made available, the key turning point will be the arrival of the next NHS ‘crisis’, most likely during the winter when many hospitals run out of money and all other budgets have been raided to the point of exhaustion. With NHS hospitals unable to go bankrupt and having to find ways of paying staff and creditors to maintain continuity of service to patients, the Treasury will be forced to intervene or accept a rapid and serious decline in performance. This will pose a personal challenge for Jeremy Hunt, who has led the drive to improve patient safety and quality of care over the past three years. At that point the Prime Minister will have to show his true colours.

Our submission to the Spending Review calls on the government to provide adequate funding for both the NHS and social care throughout this parliament, as well as in the current year. We also argue that if this is not done the government should be honest with the public about the inevitable fall in standards of patient care as NHS organisations cut their costs to cope with constrained budgets. There is a need too for greater realism about the time required to realise the opportunities we have identified for improving productivity, and the support NHS staff need to do so.

Honesty and realism, rather than panic and denial, are a better basis for deciding how much funding is needed and when it should be made available. Calm heads and clear thinking are needed now more than ever.

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Comments

#544571 Pearl Baker
Independent Mental Health Advocate and Advisor/Carer
Independent

We speak of 'integration's constantly, but no mention of this here! NHS are keen to discharge patients from hospital sooner rather than later, however the support service in the community are often ignored, until we start talking about 'integration' in real 'terms' ie LA funding nothing will change for the better.

'integration' is exactly that, all in it together, you are in danger of 'fragmenting' a service that is supposed to be delivering a seamless service.

Example. mentally ill individuals with complex needs, discharged from hospital, will require equal support from the LA to deliver health and social care, this is where the 'gap' is widening.

The above is a good example ,and my recent 'tragic' case of my client living with no money in the community for three months, and taken to court for non payment of her rent, cost against her of £140 plus rent to be paid immediately, and often 'forced' to live 'rough' is a perfect example of a failed system.

Nothing can improve until you start 'monitoring' the delivery or 'non' delivery of health and social care.

The CQC gave a 'good' rating to the GP Practice, despite the above example, and I have two other examples from the same GP Practice.

The Kings Fund have received information on the above, and should take note of this response, and the evidence now on their files!

#544573 Duncan Keeley
General Practitioner
Rycote Practice Thame

This situation is the inevitable, predictable and predicted consequence of marketisation, the PFI, and the disastrous NHS and Social Care Act 2011. The first two must be ended and the Act repealed if there is to be any hope of avoiding the introduction of a wasteful and inequitable insurance based system.

#544581 Muriel
Hospital Consultant

'the hope that controls on the agency staff and management consultants and pressure to increase productivity will bring spending back in line with available funding'.

Has anyone inquired about spending on Legal fees by Trusts? There seems to be no constraint on money spent on legal advice in my Trust especially if it involves fighting against contractual law and whistle-blowers.

Is it possible to find out how much Trusts have paid to firms such as to Beachcroft LLP and for what?

#544583 Terry
Member of the public

The NHS needs good business practices. To do this it needs competent managers and leaders and a system that prevents under achievers 'surviving'.
I am getting more than a little tired of it with it wanting more and more money when it cannot effectively manage what it has .
It often cant swop information effectively or give the very basic of care of giving a patient a drink and it doesn't take extra money to do that.
I can understand government wanting more for less and I guess its the case that as it is protected, those who can change it adopt the principle why bother - ' Im OK Jack - we can always claim lack of money and when problems are found say 'practices are now in place to prevent a reoccurrence' ......... and get away with it.
Sorry to be so cynical but enough is enough.

#544895 Julie Ann Racino
President and Principal
Community and Policy Studies

On health care spending in intellectual and developmental disabilities (IDD), see the new report, State of the States in Intellectual and Developmental Disabilities: Emerging from the Great Recession (2015) by emminent Dr. David Braddock with a state-by-state review of governmental fiscal effort, deinstitutionalization and institutional closures, and community development.

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