Since it became clear the provider sector deficit would represent a significant danger to the NHS’s ability to stop or even slow declining performance, as well as to deliver service change, a murmur began in senior circles that fixing the problem would mean addressing the previously taboo subject of the clinical pay bill.
The argument, now public, goes that trusts had and were still over-recruiting in response to the Francis report and new Care Quality Commission inspections. Last month’s financial reset was intended to be the vehicle to bring this to the attention of the service and begin to reverse the trend.
The stakes were high. The challenge set out in the reset was that the provider sector needed to close an in-year £330m gap to deliver the new goal of a year-end £250m provider sector deficit. Back office efficiencies and rationalisation of unsustainable services would help, but the only strategy that would really shift the needle would be action on workforce costs over and above the cap on agency costs.
NHS Improvement produced a list of 63 trusts whose pay bill growth – it strongly implied – may be unjustified and, as the tone of HSJ’s coverage reflected, the “crunch” had arrived. Except that, in fact – at least in terms of policy from the centre – it had not.
Given the pay bill analysis was a simplistic comparison of trust-level increases (in some cases with out of date information), it could never be a decisive cost-saving intervention. Official statements now emphasised that the numbers were only intended as a discussion point.
The centre’s key gambit was a busted flush before the game even began.
At this point it is important to say that NHSI chief executive Jim Mackey had never fully signed up to a blanket approach, or the “it’s time to stop recruiting nurses” line pushed by more bullish figures at the centre – his preferred approach is to achieve incremental change through peer challenge.
But regardless of whether constraining the clinical pay bill was ever workable, without the anticipated crackdown the provider sector deficit will not get anywhere close to the £250m target. Indeed, a new analysis by the Nuffield Trust suggests even the £580m deficit implied by aggregated control totals will take a heroic endeavour.
This leader column last month discussed the potential longer term implications of failure to control the provider sector deficit, and it is now clear that there will be an impact in the shorter term too.
Clinical commissioning groups can wave goodbye to the majority of the £800m ringfenced by the Treasury as a hedge against failure to control the provider deficit.
What cash may be released is likely to be used to shore up performance. Any plans for this pot to be used to development of primary, mental health or community services – as part of or alongside new care models – are now worth little more than the paper they are written on.
The second implication is that some trusts will presumably be accelerated into the new regime of “financial special measures”. That being the case, its rules and operation must be quickly made transparent.
A final observation is that the much maligned Care Quality Commission inspection system is, at the very least, guarding against staff cuts. It is very easy to imagine what might be happening right now under some of the lighter touch regulatory regimes of the past. Whether the CQC operates in a way which also enables the continuation of inefficiencies will be something tested as the commission expands its remit to look at the use of resources.