Daily Insight: Inflation trounces allocation

More “good” news for ICSs on the back of HSJ’s editorial earlier this week – they are set to begin their lives as statutory organisations with a real-terms budget cut.

Analysis of allocations published by NHS England shows that an average 3.3 per cent spending rise for systems will be outstripped by public sector inflation, which is thought to be running at 4 per cent.

Economists fear the outlook will only get worse, as the 4 per cent inflation rate forecast for public services – different from the better known consumer price index that currently stands at 8 per cent – is almost certainly underestimating the true impact of rising costs on the health service.

Against this backdrop, NHS England’s core budget is still set to rise above the rate of inflation, prompting questions about where that extra cash is going. Various people suspect the regulator is holding some back to plug future gaps in budgets, although NHSE points to additional investment in other priorities not covered by core budgets.

In any case, system finance bosses would have an extra £1.3bn to play with if their core budgets grew at the same rate as NHSE’s.

The Messenger mystery

The most “far-reaching” review of NHS leadership since the late Sir Roy Griffiths’ report nearly four decades ago may not be the management-bashing exercise it was hyped up to be.

Last October, it was announced that former vice chief of the defence staff, General Sir Gordon Messenger, would lead the probe and deliver his findings in “early 2022”.

While initial newspaper briefings gave a negative perception of what was to come, such as hospital managers being sacked for failing to clear waiting lists quickly enough, HSJ understands these messages did not feature in his observations.

Senior sources say General Sir Gordon feels NHS management and leadership are heavily “task focused”, with too much emphasis being put on getting things done rather than the how.

Another finding was that leaders were put off going into challenged trusts and better “support packages” were required to encourage the health service’s best to work there.

The government has delayed publishing the review until after the May local elections, but it is expected to be followed with an implementation programme of its findings.

However, its final conclusions are not yet certain, and nor is what capacity General Sir Gordon will be involved in during its second phase.