Mental health trusts provide about 80 per cent of all mental health care. Our 2015 briefing outlined the financial pressures that those trusts are experiencing. For the first time in a decade funding for mental health (adult and older people’s services) fell in 2011/12. Data from 2013/14 and 2014/15 shows that around 40 per cent of mental health trusts continued to experience year-on-year cuts to their budgets (see Figure 1).
In 2014, NHS England backed up its ambition to achieve genuine parity of esteem by 2020 by outlining an expectation that clinical commissioning groups (CCGs) would increase mental health spending in 2015/16 in real terms by at least the same proportion as each CCG’s allocation increase. However, one year on, analysis of mental health trust annual accounts demonstrates that 40 per cent of trusts have in fact seen reductions to their income.
The failure to increase funding for many mental health trusts comes despite assurances from NHS England that almost 90 per cent of plans submitted by CCGs for 2015/16 reflected the mandated increases. NHS England has maintained that investment in mental health cannot be equated with the revenues in mental health trusts as some services are provided by other organisations. However, given that mental health trusts provide a large proportion of mental health care, and with little evidence that demand for these services has fallen, it seems likely that for many CCGs, overall spending on mental health has been lower than planned.
This raises serious concerns. Many of the recommendations from the independent Mental Health Taskforce, published earlier this year, call for increased investment in core mental health services. The implementation plan that accompanied the taskforce report demonstrates that many funded programmes, such as vital improvements to crisis and acute care, will be included in CCG baseline allocations, or through centrally allocated funding from NHS England that will be switched to CCG baseline allocations at a later date. Experience with previous initiatives, including the Improving Access to Psychological Therapies programme, highlights the challenges of getting funding to the front line of care, with an evaluation led by the London School of Economic and Political Science attributing the failure to scale-up services as planned to commissioners not using available funding for the intended purpose.
The disparity between planned investment in mental health and actual investment could be attributed to a number of factors, including the need to tackle deficits among NHS providers, which have been largely concentrated in the acute sector (see Figure 2).
Although many mental health providers did not see an increase in income during 2015/16, the majority of acute providers did (see Figure 3). Future plans continue to reflect an emphasis on managing the financial pressures in the acute sector with almost all the sustainability and transformation funding being used to tackle acute sector deficits, an approach that could backfire given that the number of mental health trusts in deficit is increasing (see Figure 4).
Another key issue is the difference in payment systems. Mental health providers continue to be paid predominately through block contracts. These not only fail to reflect increases in demand, which must be met by the provider, but are also more vulnerable to cuts which can impact across the range of services that the contract covers.
How mental health trusts have maintained their financial performance for so long despite having their income cut is an important question. Our own analysis highlighted provider-led service transformation as an important factor in this but also raised significant concerns about the impact this has had on quality of care. Workforce transformation has featured as a key aspect of many of these plans, with significant reductions in the number of experienced nurses. This trend looks set to continue – our latest survey of NHS finance directors found that 40 per cent of respondents from mental health and community trusts plan to reduce the number of permanent clinical staff over the coming year. This suggests that many mental health providers are continuing to reduce their headcount, despite the risks this brings to quality of care.
These local plans have important implications for improvements at a national level. Work by NHS England to support implementation of access standards for early intervention services flagged insufficient staff and staff skill-mix as a key barrier to delivering the full package of care. Since the new standards were introduced in 2016, an FOI request by the Liberal Democrats to CCGs found that services commissioned by a quarter of the 170 CCGs that responded did not meet the relevant target.
It may be early days for the use of access standards in mental health, but alarm bells should be ringing if services commissioned by CCGs are not meeting the targets set, especially given the emphasis placed on this approach as a means of driving increased funding and improvements in care. And there is little evidence that things are going to get easier. The Mental Health Taskforce implementation plan outlines the workforce requirements to deliver each of the funded recommendations, which in some cases are considerable. Although funding has been allocated centrally for workforce development, ultimate responsibility for funding these staff will lie with commissioners and providers.
Funding good mental health care has always been perceived as an uphill struggle. There have been efforts to ensure funding is invested appropriately including getting CCGs to develop plans outlining how extra funds will be committed support improvements, development of national metrics to monitor progress, and increased reporting requirements on how funds have been allocated. But commissioners have already flagged concerns that the incorporation of targeted investment for mental health into baseline allocations for 2016/17 make it difficult to clearly identify the amount available for development of services making it vulnerable to pressures elsewhere in the system.
The NHS planning guidance for 2017–19 restates a requirement for CCGs to increase funding for mental health services in line with increases in their funding allocations and the national mental health director has pledged to take action in areas where funding has not reached the front line. This is very welcome but experience so far suggests that further directives will have little impact until significant progress is made in tackling the wider financial pressures in the NHS and implementing an alternative payment mechanism for mental health providers. Unless this happens implementation of the Mental Health Taskforce recommendations – and the ambition to achieve parity of esteem – will remain under threat.
The data is presented as proportions to reflect changes in the number of trusts and from which data could be obtained. Data for 2012/13 to 2014/15 includes all trusts for which data was available, while data available for 2015/16 includes all mental health trusts and more than 95 per cent of acute trusts.
- Read the 2015 report referenced, Mental health under pressure
- See how the NHS is performing in our latest quarterly monitoring report