The planning guidance comes amid a backdrop of balancing finances and patient safety, but there are positive developments, too, writes Helen McKenna

This year’s planning guidance for the NHS once again illustrates the cyclical nature of health policy. The dire state of the NHS’s finances and the drastic measures now being taken to fix them mark the end of some of the signature policies of the last five years.

The first casualty is the Health and Social Care Act 2012. Although the death knell has been tolling for a while on some aspects of the Lansley reforms – in particular, the emphasis on choice and competition at the core of the Act – the idea that the NHS ought to be given greater ‘autonomy’, with professionals and providers ‘liberated’ from central control had broadly survived.

The planning guidance and other recent documents from the national bodies - with their emphasis on control, compliance and national plans - bring this chapter firmly to a close.

Clarity of focus

At the same time, it signals the end of the post-Francis era. In the wake of his predecessor’s reforms and the report into the tragic events at Mid Staffordshire Foundation Trust, Jeremy Hunt made it clear that patient safety and quality of care were paramount.

This welcome clarity of focus (underpinned by the Care Quality Commission’s new inspection regime) resulted in providers going on a recruitment drive to ensure safe staffing on the wards – something which the coalition government were happy to sanction, despite the upward pressure it placed on the NHS wage bill.

’Leaders of NHS organisations can no longer regard failure to ensure safe staffing as more serious than failure to balance budgets’

Now, with financial problems endemic among acute providers and with deficits across the sector expected to reach around £2bn by the end of this financial year, ministers are emphasising the need to restore financial control.

Various measures have already been implemented to manage down deficits, including controls on agency costs, restrictions on the use of management consultants and increased scrutiny of senior salaries. While there are savings to be made in these areas, it is clear they will not be enough to bring spending back under control.

Huge challenge

With so much of NHS spending going on pay, attention has inevitably turned to staffing, as the recently unpublished letter to all chief executives from Monitor and the NHS Trust Development Authority confirms. By indicating that they would be meeting a number of ‘challenged’ providers to agree actions, including headcount reductions, the regulators could hardly have made the position clearer.

Despite their efforts to balance this message, it is clear that priorities have shifted and that leaders of NHS organisations can no longer regard failure to ensure safe staffing as more serious than failure to balance budgets.

Maintaining quality in these circumstances will be a huge challenge – as the CQC itself noted in its most recent State of Care report, a major reason for the failings in safety it observed during its inspections was an insufficient number and mix of staff.

’If implemented well, these changes will provide the NHS with strong foundations from which it has a chance of achieving sustainability in the long term’

Despite these concerns, the planning guidance contains some welcome changes. The introduction of multi-year funding allocations and moves to get under-funded areas closer to their target allocation more quickly are very positive.

Long-term sustainability

So too is the shift towards place-based systems of care and the recognition that funding is required to support transformation (even if this will only be made available in a meaningful way once deficits have been cleared). If implemented well, these changes will provide the NHS with strong foundations from which it has a chance of achieving sustainability in the long term.

It is important to put all this in perspective. Although in the context of deficit reduction and significant cuts to some departmental budgets, the NHS received a comparatively favourable spending review settlement, it is now clear that health spending will rise by an average of less than 1 per cent a year over the parliament – almost exactly the same as the increase during the last parliament.

With the NHS only just over half way through a decade-long funding squeeze, it is clear that this latest phase in the cycle of health policy may have some way to go yet.

What the Planning Guidance Means for the NHS: 2016/17 and beyond can be downloaded here.

Helen McKenna is Senior Policy Adviser at The King’s Fund