Healthcare leaders from across the community and mental health sectors have united against plans to cut the tariff price for their services by a fifth more than the reduction proposed for acute providers.

Monitor and NHS England have been accused of “institutional bias” against mental health and community services. The two bodies justified their more favourable treatment of hospital prices as a reflection of the costs of implementing Francis and Keogh report recommendations, which do “not apply to non-acute services”.

The extra burden of cuts applied to mental health providers appears to contradict the government’s stated policy intention of achieving “parity of esteem” between mental and physical health, set out in the government’s mental health strategy and NHS England mandate. It also contradicts the move towards investment in community care to reduce pressure on the acute sector.

Under the 2012 Health Act, Monitor and NHS England share joint responsibility for the NHS payment system. The two bodies have decided that in 2014-15 there will be an overall reduction in tariff prices of 1.5 per cent for acute providers and 1.8 per cent for non-acute trusts.

The reductions are intended to ensure the NHS meets its 4 per cent efficiency target under the quality, innovation, productivity and prevention programme after inflation pressures of 2.5 per cent are taken into account, the National Tariff Payment System report, published by the two bodies last month, said.

Monitor said the difference between the sectors related to acute providers needing to spend £150m in 2014-15 in order to meet the recommendations of the Francis report into Mid Staffordshire Foundation Trust and the Keogh review of trusts with high mortality rates.

The document said: “The nominal reduction for non-acute services is slightly larger than for acute services. This is because the £150m service development estimate that relates to the recommendations of the Francis and Keogh reports does not apply to non-acute services.”

That approach has sparked frustration among non-acute providers. They argue they face similar costs from implementing the recommendations, as well as taking measures to avoid a repeat of the Winterbourne View scandal, such as moving patients with learning disabilities out of hospital settings.

In August 2012, HSJ revealed spending on adult mental health services had fallen in real terms for the first time in 10 years, dropping by 1 per cent for adults and 3.1 per cent for older people in 2011-12. The Department of Health decided that in 2013 it would not repeat the study that revealed the fall.

Newly appointed NHS Confederation chief executive Rob Webster, currently chief executive of Leeds Community Healthcare Trust and chair of the Aspirant Community Foundation Trust Network, told HSJ the 0.3 percentage point difference equated to more than £300,000 for his trust, which is a relatively small organisation.

He said: “Taken at face value, the suggestion that Francis only applies to the acute sector is mistaken at best and shows institutional bias at worst.

“It really ignores what everyone else knows − these are system-wide issues.”

Mr Webster said it was not sustainable to expect mental health and community providers to continue saving money and doing more without “fair resources”.

The Mental Health Network will write to Monitor to challenge its assumptions. Its chief executive Stephen Dalton said: “You can’t doubt [care services minister] Norman Lamb’s commitment to parity of esteem, as reflected in the NHS mandate.

“But the system itself and the policy levers in the system that [could] move us closer to parity actually move us further in the wrong direction all the time. This is an example of the institutional bias and there is no basis for the differential deflator.”

Leeds and York Partnership Foundation Trust chief executive Chris Butler said the sector was “extremely concerned” about the loss of funds.

“There is no clear rationale for a differential tariff deflator,” he added. “NHS England and the Department of Health talk of ‘parity of esteem’. However, the differences in the tariff mean in effect more money is being taken out of mental health and community services.”

An NHS England spokeswoman said: “NHS England and Monitor are committed to moving towards an evidence based approach to pricing.

“At the time of making the decision, the only sector that had developed an evidence base regarding the additional cost burden associated with the Francis and Keogh reviews was the acute sector.”

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