Today’s must read stories and debate

Block rocking

The slow death of payment by results continues

Those who remember that around this time last year the NHS was engaged in a bloody dispute over the payment by results tariff for 2015-16 will no doubt be amused to learn that in the end trusts opted to shift large amounts of elective care onto block contracts in any case.

Figures obtained from nearly every clinical commissioning group in England by the NHS Partners Network show a 37 per cent increase in the value of block contracts for planned care between 2013-14 and the current year.

Among the trusts that have shifted the largest amount of care, by value, on to block contracts are Shelford Group giants like King’s College Hospital, Guys’ and St Thomas’, and Cambridge University Hospitals.

Providers cited a number of reasons for the shift away from PbR, ranging from concerns about data quality to financial stability.

But a spokesman for Cambridge (which at last count was £47.9m in the red) gave the most succinct explanation, saying simply: “The block contract guarantees us an income, which is beneficial considering our financial position.”

Osborne’s axe

Last November, chancellor George Osborne announced a substantial cut to the “Whitehall budget” of the Department of Health in the government’s spending review.

The impact of that cut – expected to be about 30 per cent over the life of this parliament – is now being felt. The DH could lose up to 650 jobs, and it is planning to move all its remaining London based staff into a new office on Victoria Street (so au revoir Richmond House).

It’s not yet clear where the job cuts will fall or exactly what form they will take. Much depends on the arrival of new permanent secretary Chris Wormald, in April. Mr Wormald will redesign the executive committee of the DH, and those changes will filter down to the departments directors, deputy directors and “non-senior” staff.

The DH says the staffing reductions are part of a “modernisation” of the department, which is largely still configured in its pre-2012 form, prior to the substantial divestment of responsibilities to arm’s length bodies which occurred with the Lansley Act.

Money mystery

Nine months, two reviews and hundreds of pages later, the NHS is no wiser as to how St George’s University slid into a £17m deficit soon after it was authorised as foundation trust.

St George’s has refused to release a highly critical page report from PwC into how it came to fall suddenly into deficit last year – after telling Monitor it would achieve a surplus. The trust was authorised in January 2015 but finished the financial year in March with a £16.8m deficit.

The trust has put out a 21 page extract from the report, which makes serious criticisms of the trust’s financial management, but not the whole 350 pages. But these do reveal the FT’s non-pay spend was £29.9m higher than expected and pay costs were £10m higher than expected.

The authors add that “it is difficult to understand why the deficiencies in the trust’s systems, processes and controls have not been identified prior to this review”.

Monitor’s own “lessons learned” report doesn’t shed much more light, but is critical of the regulator, the trust and its auditors.

However, the watchdog was keen to point out that the review “found no evidence of a breakdown in Monitor’s provider appraisal process”.