Thanks Chris. So obviously a very challenging environment financially for the NHS in England generally and for London in particular with a £4.1 billion gap emerging, quite a lot of that gap counter-factual in terms of what you will have if you don’t do anything. So some of this is driven by increasing demand and some of it by things that we’re choosing to do, like increasing screening, quite a lot of it calculated by projecting forward the historic rate of growth on top of the population change. So some of it is a matter of choice, some of it is driven by things happening in the wider environment. The major response to this is provider efficiencies, it’s by far the largest chunk of contribution here. And then a smaller amount of reconfiguration shifting work to the community.
The rate of provider efficiencies are between 2.3 and 3.7% per annum, that’s really quite demanding and that’s on top of the traditional NHS efficiency savings that we’ve had. And it’s probably fair to say that when these figures were calculated, the provider finances were not as good as they appeared, some very clever financial massaging across the NHS had been done to reduce the level of the apparent deficit. So it’s very demanding, and particularly demanding for community services when the assumption is that work is going to be shifted to community services, and most of their costs are of course staff, and then some savings from demand management, and activity reductions as a consequence of that. But in the face - we’ll show you in a minute - of rapidly growing population. A bit of a risk in double counting some of these savings in the way that they’re calculated, but we weren’t really able to unravel that.
So in common with England the population is growing. London’s population is growing very substantially faster than England’s at 6.5%, government strategy to make the UK a very unattractive place to come and migrate to, may ameliorate this number, but you can see it’s a very substantial increase. London is ageing less rapidly than the rest of the country but it’s still quite substantial, and there’s also very big growth in the nought to fourteens, in fact there’s an additional maternity unit worth of births in London over the next five years, so that’s quite substantial levels of change, and these are as you see quite big numbers with particular issue in North East London which is growing at an extraordinarily fast rate.
Not surprisingly when you take the changes in age structure, because once you get to 65 the curve becomes exponential in terms of your youth hostel services, so this converts into an 8.8% increase in hospital activity as a result of population change. This doesn’t take into account the fact that we have now started screening people for colorectal cancer, and a number of other changes which will drive increased activity. So there’s a sort of baseline figure of around 8.8, and that converts into a higher proportion in growth of bed days, because as the population ages, also patients do tend to stay in hospital longer. So there’s nearly 10% growth in bed day demand over this period, and it’s slightly greater than the rest of England.
I should say that if you went back to 2008 and did this same projection forward, you would get very similar sorts of results, and yet from 2008 to now the number of beds has actually fallen. We’ve managed to contain that growth, so it can be done, the question is how long can you continue to do that for and how long can you do it for in the face of not very much additional investment in other parts of the system? So we took some scenarios here and we said ‘Well what happens if you reduce demand and you reduce length of stay?’ And you can see that to get the sorts of reductions that people are postulating which were some quite substantial, up to 500 bed, reductions in North West London, the equivalent of about 450 beds in South West London, to give you a bit of a flavour for that, North Central is a little bit more stable. But you can see to get these sorts of numbers you’ve got to make some pretty aggressive assumptions about both length of stay and reductions in demand.
Now the length of stay has fallen since 1948 and you can almost draw a straight line. It has started to slow slightly over recent years which makes you slightly nervous about whether we can replicate the achievement 2008 to 2016 in the next five or so years, given the situation we’re in now. So this may be a matter of timing rather than end point. We are probably still on the downward trajectory of length of stay, but the question is when can you do this?
On demand, this is a little bit more difficult. The evidence that reducing demand is easy is not very encouraging. It’s also worth noting that a very substantial number of admissions to hospital in the UK now stay nought, one or two days. So reducing admission to hospital doesn’t do very much to your demand for hospital capacity. The major driver of hospital capacity are patients staying over seven days, and they constitute something like 70% of the total beds in hospitals, but they’re only 9% of the patients. A large number of those people are obviously elderly and a substantial proportion of them are over 85. They don’t necessarily need to be in hospital, but they’re not able to be sent home without some other form of care.
So we’ve got some very big ambitious targets for bed, cost and demand reductions. There’s a 2.5% increase in primary and community care over this period. There’s a shift in the proportion of spending planned in the STPs, that doesn’t seem to me to have quite the level of leverage that you would need to have to see the sorts of bed reductions that we’re seeing proposed. So there’s kind of an issue about both the scale of investment and the rate of change that will be required to make this happen. There is also a £5.7 billion capital bill which is more than the entire NHS’s capital allocation for one year, so it’s a fairly substantial chunk, about a third of that may come from land sales, but time may be against us in terms of realising some of this. I think you come to the conclusion to close this gap there’s probably less palatable measures not in the plans that might need to be considered, but all in all a hugely ambitious programme of change which as Chris was saying I think some reason to be nervous about whether it’s able to be delivered. And I think I’ve done my time, I shall therefore, stop, thank you very much.