HSJ’s weekly email briefing on NHS finances, savings and efforts to get the health service back in the black
Stevens’ change in tone
In November last year, the government and NHS England presented a strong united front over the “frontloaded” spending review settlement.
Announcing the £8bn real terms increase in funding by 2021, including an extra £3.8bn in 2016-17, ministers claimed the “unprecedented investment” proved they were “fully backing the NHS’s own plan for the future”.
That plan for the future, the Five Year Forward View, is of course closely associated with Simon Stevens, so did he agree with the ministers?
Well, the NHS England chief executive’s words were in the November press release, describing the settlement as a “clear and highly welcome acceptance of our argument for frontloaded NHS investment”.
“In the context of constraints on overall public spending our case for the NHS has been heard and actively supported,” he added.
Skipton House and Richmond House appeared to be speaking as one. But in the last few months, clear daylight has begun to emerge.
The first example of this came at the NHS Confederation conference in June, when Mr Stevens reminded everyone that the forward view said the NHS would need between £8bn and £21bn.
He added that an increase at the lower end of that range would require adequate levels of social care, enhanced efforts on prevention, and extra funding for transformation support.
Then in July, Mr Stevens pops up in The Daily Telegraph suggesting that the government should take advantage of low borrowing costs and give the NHS a big 70th birthday present in the shape of an infrastructure fund for capital projects.
August was quiet, but then last week Mr Stevens went further, explicitly telling the Commons public accounts committee that the NHS ”didn’t get what we originally asked for” in the middle years of the plan.
He also agreed the financial situation would lead to controversial decisions, and suggested the country may wish to spend a higher proportion of GDP on healthcare in future.
At this rate, Mr Stevens could reach full-on open revolt by Christmas.
But there has, of course, been a change at the top of the government – and we probably shouldn’t underestimate Mr Stevens’ political nous.
His statements are likely to have been carefully planned, and with the new prime minister and chancellor biding their time before revealing their first proper assessment of the NHS, these summer offensives might reap rewards.
A great unravelling
A closer look at NHS provider performance in the first three months of 2016-17 shows that dozens of NHS trusts will have to significantly improve their monthly “run rates” in order to meet their financial targets.
While the sector’s performance was in line with financial plans in Q1, those plans assume that significant efficiency savings can be delivered in the second half of the year.
In many cases, those savings have not yet been identified or there is a high level of risk that they will not be delivered.
There’s nothing particularly unusual about trusts’ “back-loading” their efficiency savings to the latter half of the year – the same thing happened in 2015-16.
But in all likelihood, many of the savings will have been back-loaded because they are difficult to achieve, and there will be a significant degree of risk involved.
And remember – trusts on average are having to find savings of 4 per cent this year, a figure widely deemed unachievable.
So while the plans and forecasts look all right for now, national leaders should probably be prepared for a great unravelling later in the year.