HSJ Catch Up: NHSI board shake-up and the coming funding row

Changes at the top of NHSI

Changes at the top of NHS Improvement.

Bob Alexander, deputy chief executive and director of resources, is leaving later this month to lead the Sussex and East Surrey sustainability and transformation partnership, though he will formally remain in post until January and initially work for the STP three days a week.

The news follows Baroness Dido Harding being confirmed as the preferred choice to be next chair of the regulator and take over from Ed Smith (see below).

Mr Alexander has been a “very important cog” at the centre of the system, especially in financial management, so his absence will be felt.

He’ll be taking on a challenge with his new role – Sussex and East Surrey STP was one of five (out of 44) rated “needs most improvement” by NHS England in the summer.

Mewanwhile, Jim Mackey, the NHSI chief executive, has extended his tenure and could stay until Christmas.

Dido’s new gig

The Department of Health’s choice for the new chair of NHS Improvement provided ample opportunity for scoffing on social media.

Baroness Harding is probably most famous for her time as chief executive of TalkTalk, which under her leadership suffered a major cyberattack in 2015 in which 4 million customers’ data was accessed by hackers.

The NHS’s recent and high profile vulnerability to cyberattacks provides an obvious sense of irony.

Then there’s the politics. Baroness Harding is a Conservative peer and married to a Conservative MP. Therefore she must hate the NHS and it’s obviously all part of the party’s secret privatisation plan.

In reality, this might be a positive appointment from the NHS’s perspective. She will clearly bring a wealth of experience and know how from the retail and technology sectors.

Funding fight

As if choreographed, hours after health secretary Jeremy Hunt opened a can of worms over the funding of an NHS pay increase in Commons health questions on Tuesday morning, the chief executives of NHS England and NHS Improvement appeared for a two and a half hour question session with the Commons health committee.

Thus far the row over health funding ahead of the November budget has been fairly civilised.

As HSJ has written, though, the question of day to day spending could never be avoided in this autumn’s budget as, without diversion from the current plan, the NHS hurtles towards the bottom of a funding U-bend in which it would receive a cut in per head of population funding in real terms. Even less now the pay cap is off, as Mr Hunt confirmed in Parliament.

Helen Jones, Warrington North MP, asked Mr Hunt whether a rise would be funded by cuts in services. He responded: “That is something I can’t answer right now because the latitude the chancellor has given me in negotiating future pay rises is partly linked to productivity improvements that we will negotiate at the same time. The fact is we do have that flexibility and I hope we can get a win win.”

That is a very long way short of a “no” – leaving the door wide open for the NHS to, indeed, be required to fund a pay rise with further cuts to services.

Fast forward to the afternoon and Simon Stevens and Jim Mackey were both very clear this could not happen.

In one of several mentions for HSJ, Mr Stevens was asked about our revelations about the capped expenditure process earlier this year, and the consequences of ongoing funding constraint. The CEP was a result of the NHS trying to live within its voted resources, was his basic message – so it was up to Parliament (rather, the government) to find some more.

CEP begins to bite

When NHS England announced the 14 areas that would go through the capped expenditure process, the national commissioner indicated primary care would be protected from the national savings drive.

Simon Stevens told HSJ in the summer that around £250m in savings would need to be identified in these areas and that areas would “need to get on with” making “hard choices”.

Although plans are yet to surface for all 14 regions, there are hints that the plans may begin to bite for primary care – but not necessarily through the usual service cuts route.

HSJ has learned that North Lincolnshire Clinical Commissioning Group has told GPs it will not be able to spend transformation money, as previously promised, in 2017-18.

Instead the CCG has said it will defer the £270,000 and add it to 2018-19 allocations.

Last month we reported that two other CCGs had to cut the growth in primary care investment for 2017-18, effectively meaning anything not already budgeted for would not be funded.

If national NHS leaders want more services delivered in primary and community care, is it really a good idea to delay funding needed to improve those services?

Ethical finance

When it comes to NHS finances, the ethics issue is not going away.

Many finance directors will sympathise with Rick Tazzini, formerly of Basildon and Thurrock University Hospitals Foundation Trust, who warned his trust not to accept a savings target that he felt was unachievable and would jeopardise patient safety if agreed.

Leaked papers seen by HSJ show that the trust rejected his advice and accepted the control total anyway. He appears to have left the organisation shortly afterwards.

It’s clear there’s a range of views across the system, and some finance directors feel the ethics issue is sometimes used as an excuse not to take the tough decisions.

But when a professional body carrying the authority of the Chartered Institute of Public Finance and Accountancy starts raising concerns on the issue, it is worth taking seriously.