- NHS Improvement to run new finance turnaround programme for struggling trusts
- New finance recovery fund to be set up
- Providers asked to deliver majority of £700m administrative savings
The 30 worst financially performing NHS trusts will be subject to a new regulatory regime as part of plans to bring the provider sector into the black by 2020-21.
According to the NHS long-term plan, NHS Improvement will deploy an “accelerated turnaround process” for the 30 trusts which combined account for the net total of the trust provider deficit.
The provider deficit after the second quarter of 2018-19 stood at £1.23bn.
No further details of the new process have been announced. It follows similar financial improvement programmes in recent years.
The long-term plan also confirmed the creation of a new “financial recovery fund”, which is expected to lead to the number of trusts reporting a deficit in 2019-20 to be reduced by more than a half. The NHS is aiming for all its organisations to be out of the red by 2023-24.
The fund, thought to comprise around £1bn, will only be accessible to trusts whose deficit control totals indicate a “risk to financial sustainability and continuity of services”, and where agreement has been reached with regulators over financial recovery plans.
These plans must deliver at least 0.5 per cent extra efficiency savings on top of the sector’s 1.1 per cent minimum requirement.
“The fund will mean the end of the control total regime and provider sustainability fund for all trusts which deliver against their recovery plans by 2021 at the latest,” according to the long-term plan.
Amounts released from the fund will reduce during the next five years as the extra £20bn announced by the government last summer is spent.
Meanwhile, the NHS will also be expected to save around £700m from administrative costs during the next five years. Of this sum, commissioners will be expected to save £290m and providers more than £400m. One target is automating all “core transactional services” (such as processing invoice payments) within the next five years.
Chiefs also plan to “simplify costly and overly bureaucratic contracting processes, supported by reforms to the payment system”.
Those reforms include moving away from activity-based payments to “ensure a majority of funding is population-based”. For elective care, “appropriate volume-related payments” will be retained “for now”, but new incentives for quality improvements will be drawn up.
An updated “market forces factor” will also be phased in during the next five years, and NHS England will continue to “target a higher share of funding towards geographies with high health inequalities” (amounting to at least £1bn by 2023-24) – confirming a series of trailed changes to NHS payment systems.
Further financial reforms will be carried out after 2019-20 to “support integrated care systems to deliver integrated care”.
A separate settlement for capital funding is being considered for this year’s government spending review – likely to take place later in the year – also including reforms to the way capital funding is prioritised and allocated, and remove the “existing fragmentation of funding sources, short-termism of…decision-making and uncertainty for local health economies”, according to the plan.
The plan committed the NHS to implementing the ongoing premises review for primary care.
In its “next steps” section, the long-term plan said the NHS would set out a list of “essential interventions” such as effective e-rostering, and e-job planning and processes for standardising and aggregating procurement demand for products and services to “make the most of the NHS pound”.
NHS organisations will be “required” to adopt interventions proven to deliver benefits for patients and staff.
NHS long-term plan
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New regime revealed for trusts with biggest financial holes