The Budget provided an additional £1.6 billion for the NHS in 2018/19 to which the Department of Health and Social Care has added £540 million from its other resources (which we will class as good news, hoping it does not turn out to have been cut from public health, workforce training or other key areas of Departmental spending). This takes the real-terms growth in funding for NHS England to 2.4 per cent, a shade higher than the 2.0 per cent it got in 2017/18 but still well below the 4 per cent historical average for the NHS. Once upon a time, extra money for the NHS usually meant extra money for frontline commissioners (primary care trusts and later clinical commissioning groups (CCGS)) but no longer. Of this extra resource only £600 million goes direct to CCGs, repeating the experience in recent years of holding back funding growth in national bodies, which I’ll return to later. On the plus side, the growth for CCGs is allocated in proportion to a CCG’s overall fair share of funding. This is important as NHS England has made great strides in getting CCGs close to their fair shares.
The £1.8 billion Sustainability and Transformation Fund is no more. This provided support to providers (with strings) to offset their deficits. For providers there is now the Provider Sustainability Fund which inherits the existing £1.8 billion and gets another £650 million to make £2.45 billion. This reflects current forecasts that providers will not live within their control totals in 2017/18 even after including money from the current Sustainability and Transformation Fund. The purpose of the Provider Sustainability Fund remains the same as its predecessor’s but drops the claim that the money is for transformation, reminding us that the original ambition was that, over time, the need for sustainability funding would decline and the money would fund service transformation. This has, of course, not happened.
In addition, we now have a new Commissioner Sustainability Fund which gets £400 million. This has a similar purpose to the Provider Sustainability Fund but is directed at commissioners instead. At the same time NHS England has dropped the requirement that CCGs hold back 0.5 per cent of their total allocation as a risk reserve. This is surely a step forward and end to the habit of issuing money to commissioners and then telling them not to spend it.
Remember, however, that the strings attached to sustainability and transformation funding, and, potentially, to the money from the two new funds, are onerous. In addition, the variable receipt of sustainability and transformation funding, as we have set out before, has led to great variation in financial performance across organisations. Variation that is not always easy to explain and is unlikely to be sustainable (an irony, given its name).
The remaining money is spread across various pressures in direct commissioning – ie, is held by NHS England. There is also additional money for capital spending, but this is also wrapped up in the response to the Naylor review, which we will cover at a later date.
On performance, the old guidance expected the majority of providers to achieve 95 per cent for the four-hour A&E waiting times standard by March 2018. This has now become March 2019 instead and similarly the expectation that aggregate performance would be above 90 per cent in September 2017 (which is wasn’t but only by the tiniest of margins) is now expected in September 2018. Although growth of 2.3 per cent in non-elective admissions has been built into the assumptions, this is still clearly a tough ask and fundamentally, it is hard to see why it will be easier in 2018/19 than 2017/18 given the wider context. Unsurprisingly reducing delayed transfers of care remains a focus, while there are new efforts on reducing long lengths of stay in hospital.
All the previous commitments on mental health, cancer, primary care, maternity and learning disability remain (with the detail in an annex: there are a lot of commitments). The rules on mental health get tightened such that every CCG must meet the Mental Health Investment Standard (which states that spending on mental health must rise faster than their allocations) and the results will be audited. This no doubt underlines NHS England’s commitment to mental health. However, as in previous years the investment standard is a commitment around CCG spending and yet most of the growth in funding does not go to CCGs. As long as deficits persist and overall spending growth is low, it isn’t easy to find the headroom for service development whatever it may be. Before blaming the acute sector for running deficits and eating up the money, remember they are in the eye of the storm of rising emergency demand and A&E targets. It is simply not possible for the NHS to continue to do everything on such limited funding growth.
It is perhaps this fundamental fact that leads to the most startling ‘commitment’, which is around referral-to-treatment waiting times. The document states that the NHS should look to halve the number of people waiting more than 52 weeks (1,750 on latest (December 2017) data) and should plan that the number of people on the waiting list in March 2019 no higher than it will be in March 2018 (trickier than it sounds given draft plans must be submitted on 8 March before the NHS knows the size of the March 2018 list). Commitments on waiting list size haven’t been used since the 1990s and were abandoned for good reason as they provide little guarantee around how long any patient may wait. Given that 52 weeks is an awful lot longer than 18 weeks, this could be interpreted as a major relaxation of the target and at least means the NHS may have just given itself a lot of wriggle room on elective care.
The main elements of the reform package in the guidance are the focus of a lot of The King’s Fund’s current work. I pick out just three elements here. First, that, as expected, accountable care systems (ACSs) now become integrated care systems (ICSs). Second, that the leaders of the first ICSs have (possibly) been granted an important new lever: NHS England and NHS Improvement commit to using their powers of intervention alongside ICS leaders – holding out the possibility that where intervention is needed ICS leads will decide what to do, and the national bodies will then carry out their instructions. Of course, we must now see how this new offer plays out, but it could be a game-changer in terms of ICS powers and the relationship with the centre. The same can be said of the financial arrangements for ICS where new system control totals could either encourage joint working or simply be a way of creating yet another layer of discipline over already tight financial targets. Third, although the document repeatedly says the roll-out of ICSs is voluntary, it also notes that they will replace sustainability and transformation partnerships.
The nod to engaging ICS leads in performance management is important as elsewhere the guidance maintains the spirit of recent years: control totals, substantial resources retained at the centre, performance management and intervention and at times it gets rather ‘shouty’: providers are expected to plan on the basis of 2018/19 control totals and the financial planning returns must show provider boards have accepted this. Failure to accept a control total 'is likely to trigger action'. You have been warned.
Overall, the guidance is a mix of continuity and change, but perhaps with more of an emphasis on the former than the latter at least when compared to the tectonic shifts set out in recent years. I said at the outset it was perhaps the silences in the guidance that are more telling. What are they?
What the guidance didn’t say
First, large parts of the NHS are in the middle of a workforce crisis, perhaps most clearly for general practice and nursing but also other key areas (not least mental health). Yet the guidance has little or nothing to say about recruitment, retention and workforce capacity (at a stretch it could be argued that some of the wider efficiency measures would raise workforce productivity). What the guidance does say is that agency controls must be maintained; that ‘provider workforce plans will need to consider the significant workforce supply and retention challenges in the NHS’; and that these plans must be detailed, well-modelled, align with financial and activity plans, affordable, efficient and sufficient to deliver safe care. I am sure provider boards will be very grateful for having this pointed out. Whether it’s possible is quite another thing. While the consultation on the future workforce strategy is still open, this can hardly be expected to deliver anything on the ground in 2018/19 and this makes the silence on workforce all the more deafening. Perhaps in the future, the planning guidance should not only set out what the centre wants of the NHS, but also provide a chance for the centre to respond to the burning issues faced by the NHS itself.
Second, the NHS now has £2.85 billion in revenue spending held centrally in sustainability funds and additional capital spending similarly held back. A system of control totals with detailed financial and operational plans expected, all heading to NHS England and NHS Improvement head offices for sign-off and the involvement of both the Department and HM Treasury. This is not the world of autonomous local organisations working within a relatively loose performance framework that either the reforms prompted by the 2012 Act or the ones before them envisaged. Is this to be the way of the future? Or will, at some point, national bodies try to revive foundation trust and CCG freedoms consistent with the strategic direction toward population-based health? Or will some evolution of integrated care systems lead to a re-write of the rules and a new autonomy? At the moment we are still in the design phase, but there can only be so much time before NHS England and NHS Improvement (with, presumably, the Department and HM Treasury) must set out how they see this system evolving that marries both short-term realities of the Provider Sustainability Fund, the Commissioner Sustainability Fund and control totals and the more strategic push toward devolved place-based systems.
Whatever the answers to these questions are, as each year the funding growth for the NHS lags behind the rising tide of demand, the challenge of providing high-quality care for all just gets harder.
In order that change is effectively undertaken all levels of government and other public funded organisations need to demonstrate good management
Independent management accreditation is required to achieve this
I am surprised that you don't mention the responsibility of councillors on Health and Wellbeing Boards for the budgets of CCGs totalling more than £70 bnpa. I believe that they could retain GPs by instructing CCGs to commission drug-free interventions that work (such as psycho-education courses to teach patients self care) rather than medication for high blood pressure and depression, which 'cure' is worse than the disease, and does more harm than good with side effects. This toxic environment is soul-destroying for GPs, making them feel guilty and ashamed, so they retire early, now at an average age of 55.