Minister: Hospitals that try to be 'islands of autonomy' will fail

Lord Prior made the comment to HSJ in his first interview since his appointment as a health minister in May.

The former Care Quality Commission chair refused to confirm that the government’s planned cap on agency fees would cut the NHS’s total agency bill this year, although he said there would be a “downward trend” from September.

• Prior ‘not at all against’ procurement ‘Sunshine Act’

He told HSJ he expected further savings could be found from tackling delayed discharges, despite cuts to social care budgets.

Lord Prior said the £22bn of efficiency savings the NHS needed by 2020 could not be made by continuing the approaches taken in recent years.

He said: “We’re not going to get [these savings] by squeezing the lemon any tighter, the lemon has already been squeezed.

“We’re only going to do this by real transformational system-wide change….This is about really joining up the cracks in the system, [and] about having a system, not a series of institutions within the system.

“Actually, if an acute trust thinks they’re an island of autonomy then forget it frankly, they are not, and they never have been in reality. And as far as they’ve tried to pretend they’re an island and haven’t integrated with the system around them, then they’re going to fail.”

Improved procurement, estates management, workforce planning and medicines optimisation can deliver £5bn savings by 2019-20, according to a report published by Lord Carter last month. Lord Prior said further gains could be made by improving patient pathways and cutting delayed discharges.

When asked if this was realistic, given huge cuts to social care budgets, he said: “I don’t think it’s so much that the constraint is finance, funnily enough. This is one of the huge benefits that will flow from accountable care organisations and more integrated structures.”

He also argued the £5bn better care fund “could be directed towards delayed transfers of care”, but acknowledged it is not “new money” for the system.

The government’s plan to introduce tight controls this year on NHS agency spending would also contribute, Lord Prior said.

He refused to say whether this would deliver a year on year reduction in the agency bill – which was £3.3bn in 2014-15. He expected the spending to be on a “downward trend” from September.

At an event at the King’s Fund on Tuesday, Sir Robert Naylor, chief executive of University College London Hospitals Foundation Trust said 2015-16 will “probably be the first time the NHS has broken its cash limit”.

Lord Prior said it would be “really serious” if the Department of Health overspent its 2015-16 budget. He added: “We’ve got to come in at a break even position at the end of this year….No ifs, no buts. I feel committed to getting those savings.”

Asked if he believed provider forecasts of a £2bn deficit for 2015-16, he acknowledged that “if we carry on as we are at the moment there will be a significant deficit in providers”. However, he said he did not yet know the forecast position for commissioners, and therefore did not know what the net position might be. He added: “There’s going to be a lot of pressure on providers to reduce those deficits at the back end of this year.”

Meanwhile, Lord Carter has warned that the metric his review team is designing to rate hospital productivity should not be used as a “crude weapon” for trust regulation.

And although Lord Prior said there would be a move away from the “hard fisted approach” to regulation, he added: “In the NHS things like league tables have become a sort of pejorative word, because they’ve been associated with sort of very hard performance management.

“But I think boards needs to know where [they’re] sitting against other people, and so I’d expect boards to be able to look at the ranking if you like, and see where their hospital sits and then be able to hold the executive in the hospital to account for why they’re not doing relatively better.

When HSJ suggested the press and public will inevitably use the metric to create rankings, Lord Prior said: “I know, I realise that. Transparency can be quite cruel, but on balance the benefits of transparency far outweigh keeping it quiet.”

He also said the CQC was likely to incorporate the metric into its own efficiency measures, which are currently being developed.