Record funding for NHS fails to dampen fears of trust pressures

Despite making its most generous financial allocation ever to the NHS, the government is being warned that the service is still facing 'real pressures' and there is a need to control both local and national expectations to fund new projects and latest treatments.

Managers meeting at the Health Financial Management Association conference as next year's health authority funding allocations were revealed, warmly welcomed the additional resources and the new freedoms with which they will be allowed to use them to meet targets. But concern remains about the pressures facing trusts.

Mark Miller, outgoing chair of the HFMA, described the average 9.9 per cent rise as 'a major investment in the NHS', but said the service targets for the coming year would be challenging, and maintaining a financial balance 'will demand rigorous control on the part of managers'.

An HFMA survey suggests that 40 trusts are facing financial pressures - although chair John Flook says the trusts are working with HAs and regional offices to manage the pressures, and the service is predicted to finish the year in balance.

Money has been earmarked for the clinical priorities of cancer and heart disease, plus IT and mental health, the areas which NHS finance director Richard Douglas acknowledged are the 'most easily squeezed'.

Mr Douglas said the Department of Health had responded to concerns from the service by hypothecating less money (22 per cent, compared with 36 per cent last year) and clearly labelling money for national programmes as it went down to local level to avoid wrangling between HAs and national programme managers.

'This is well above any realterms growth I have seen in 10 years. I see this as a vote of confidence in the NHS. Nowhere else do you see this level of investment, ' he said. But he admitted that there are major pressures caused by prescribing and agency staff costs, particularly in the south east, where 'a number of organisations are struggling'.

Health secretary Alan Milburn also allocated£425m for 'building capacity across health and social care', which will include expanding local capacity, buying-in spare public or private capacity, commissioning extra activity and paying for the subsequent costs in community health and social care.

But concerns persist that social care is not getting the funding it needs and that NHS priorities could be hampered by lower than expected allocations for local authorities.

A King's Fund spokesperson said: 'We are delighted the NHS is getting extra money, but we need the same political priority for social care, otherwise we'll see a real crisis in the next few years and that could imperil the NHS plan.'

The King's Fund estimated that just to keep up with the NHS, social services would need an extra£700m a year.

Local Government Association chair Sir Jeremy Beecham welcomed a 7.4 per cent overall increase in government support for local councils but said they would be 'extremely disappointed' that there was no new money for social services.

'It is clear that the allocation has not altered from that outlined in the 2000 spending review, despite the significant and highly publicised pressure that services for the elderly and children are under.'

NHS Confederation policy manager Janice Miles also expressed concern that NHS organisations would still have to find efficiency savings. 'We are disappointed that despite all the evidence about underinvestment in the NHS, the government is still requiring a 2 per cent efficiency saving. We will be watching closely to ensure that this is not increased as funds are allocated to primary care trusts.'