Simon Stevens, one of the most influential individuals in Whitehall, has issued a warning over the NHS spending settlement for the next two years. Dave West says front-loading funding in the next two years would give the NHS a shot at success.
Two weeks on Wednesday will almost certainly prove the most important day for the NHS in this parliament, if not beyond.
The government’s spending review on 25 November will fix the health service’s funding envelope for each of the next four years – a period that will be its most straitened ever.
Given this, it is deeply worrying that, just over two weeks ahead of the review, Simon Stevens has said he is not confident he will secure the “frontloaded investment” he believes is necessary in the first half of the period covered, up until March 2018.
The fact that the NHS England chief executive – a man described recently as more powerful than some cabinet ministers – was willing to comment about this problem represents a remarkable frankness in the run-up to a spending review. It serves to emphasise the seriousness of the situation.
There is severe concern in the health service that the Treasury, having committed to provide £8bn real terms growth, in stark contrast to the cuts currently being imposed elsewhere, believes it has done its bit for the NHS, and is overlooking the requirement for frontloading.
The Treasury may be asking, why is the first half of the settlement so important anyway? Is the NHS plotting to survive on the frontloaded growth; then come back to renegotiate for more when the 2020 general election appears on the horizon and with public finances potentially healthier?
Mr Stevens’ public argument is that the money is needed in the next two years to kick-start reforms that will deliver savings in the second half of the parliament, enabling the service to survive on less. In particular, for establishing new, more efficient models of care while serving existing demand. More prosaic initiatives like service and estates consolidation, procurement savings, and curbs on workforce spending – whether temporary staff or in general – may have made an impact by 2018, too.
Another important reason is a frontloaded deal could give national leaders just enough wriggle room to make the next few years look manageable, and remotivate the people they will need to make it so.
Their strategy for doing so – indicated in Mr Stevens’ comments to HSJ and to be elaborated in coming days – is to recognise the demands made of providers in recent years have been unrealistic, and set a less demanding tariff for next year. This will be paired with telling trusts they are not expected to eliminate deficits overnight, but instead will be measured against milestone improvement targets set in whole system “financial sustainability and service transformation” plans.
The national chiefs will argue that while the NHS provider deficit will not disappear overnight, 2015-16 is its high watermark – after then it will fall year on year instead of growing.
This strategy would have extremely slim credibility if Mr Stevens can only secure wafer thin growth for the next two years; with costs having increased substantially over the past 20 months, and new ones, including increased pension contributions, due next year.
As ministers balance the NHS’s requests against the deep cuts in other services (which are also affecting health services), perhaps the more practical realities are most likely to get attention.
A first is the prospect of more quality and waiting times problems, or a national breach of the NHS budget, in the next two years. A second is that, if government wants Mr Stevens to continue backing its claim to be supporting his plan for the NHS, it may have to actually do that.
Exclusive: Stevens issues warning over government's NHS funding deal
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Analysis: Frontloaded funding deal would give the NHS a shot at success