Stevens considers 'freeing up' funds for 'service change'

The comments by the NHS England chief executive, speaking to the Commons health committee last week, indicate money may be separated from normal allocations to form a fund to support the reform of service models proposed in the NHS Five Year Forward View.

Mr Stevens said: “We have got to ask the question, where we need to kick start service change, ‘Is there a case for freeing up some of the cash from day to day operations in order to lever in some of these new models and deal with the double running costs?’”

Mr Stevens added: “That’s certainly something that we will be looking at.”

It is unclear what form the arrangements would take or how much money would be involved. In the past, commissioners have been required to designate small proportions of their allocations for non-recurrent investment in service transformation. It is also believed the idea of linking parts of providers’ income to transformation has been floated among national officials.

NHS England finance director Paul Baumann told the committee the organisation was considering whether some clinical commissioning groups should get priority access to funds from previous years’ surpluses in order to drive service change.

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Mr Baumann said: “Every year we have a degree of what we call drawdown – the bringing forward of previous year’s surpluses and investing of those.

“We have a cash limited drawdown every year. Part of the question we are currently addressing is how we prioritise which clinical commissioning groups gets priority access to that drawdown amount.”

Mr Stevens also said his view was that the rate of real terms funding growth required to meet the service’s needs in the next five years would be “about twice” the rate currently delivered during the current parliament.

This contrasts with comments by chancellor George Osborne last week who indicated a “similar increase” to that achieved in this parliament could meet the requirement of the forward view.

Mr Stevens was also asked about a single budget for health and social care.

He said: “Should there be a single budget? It depends. For many of our service users what’s health and what’s social care is a distinction without a difference and the way we have historically organised services no longer makes sense.

“From a patient’s point of view we have got to dissolve those distinctions.

“However, we should not kid ourselves that simply combining two pressured funding streams by itself will mean we have well funded, well functioning services.

“We would want to ensure both sets of the funding equation were properly resourced.”