Daily Insight: Government won't budge on NHS spending claims

The letter’s not for turning

The NHS and its interested parties seem to be hitting a wall with their protestations over the government’s funding claims.

There is no doubt the “extra £10bn” claim is misleading, but however rational the argument, the new administration has taken its position and ain’t gonna budge.

Chancellor Philip Hammond has reinforced the government’s argument in a letter to the Commons health committee.

He wrote: “The government has not claimed that the Department of Health itself would receive £10bn above inflation; it has always referred specifically to the NHS. Our decision to focus investment on the NHS is deliberate – it reflects our desire to prioritise frontline services.”

While the NHS England budget is set to increase by £10bn – from a 2014-15 baseline and over the six years to 2020-21 – overall spending by the DH will only increase by £6bn, due to other budgets, such as public health, being cut.

In last year’s spending review, the government redefined the ringfence around “NHS spending” to only include the NHS England budget, which left the door open for cuts to other health budgets.

Looking back at the 2015 Conservative manifesto, it appears to have been carefully worded with this in mind.

It noted how “health” spending had increased by more than £7bn in the previous parliament – referring to the overall DH budget – but it then said: “We are able to commit to increasing NHS spending in England in real terms by a minimum of £8bn over the next five years.”

It did not explain the change to the ringfence, or suggest that other DH budgets would be cut in real terms.

Meanwhile, an NHS England report that set out the financial gap that was cited in the Five Year Forward View assumed the “health budget will remain protected in real terms”.

No matter how you define the ringfence, successful delivery of the forward view was always predicated on social care being protected and prevention services being upgraded.

Simon Stevens will no doubt be tempted to keep reiterating this point, but will be conscious that the new regime may quickly grow tired of these protests.

Big beasts offer NHS insight

The House of Lords isn’t where you would always look for insight on the NHS.

But the peers took evidence on Tuesday from three Shelford Group chief executives of long-standing.

Sheffield boss Sir Andrew Cash answered baldly that payment by results had outlived its usefulness and that only a capitated system would work longer term.

The Shelford Group trusts have long argued that the tariff, based on average costs, disadvantaged them as providers of expensive specialist care (although there are plenty who believe teaching hospitals are inefficient and hide behind the “complex casework” defence).

All agreed that circumventing the competition focused Health Act 2012 was a “fiendishly” difficult and expensive process.

But money was the big issue, with Central Manchester chief Sir Mike Deegan telling the peers “the current path is taking us rapidly to an unsustainable position”.

At one point, former Labour health minister Lord Warner gave Sir Mike a hard time, bizarrely asking him what public services should be cut in order to pay for an NHS with funding rising by 4 per cent a year.He stopped short of demanding to know what Sir Mike would do about Brexit or Syria.

Birmingham chief executive Dame Julie Moore told the committee Brexit had started to cause problems in the workforce, with some Irish nurses at her trust considering moving home.

The shortage of middle grade doctors is well known in the NHS; less obvious is the difference at teaching hospitals and smaller trusts. On the latter, Dame Julie was talking nurse workforce and has lots of experience, running UHB and having supported Medway, George Eliot and now also running Heart of England.

The difficulty of sustaining a high quality supply of nurses was even harder in small towns, she said, and this was the case even before the global undersupply of health workers.