Essential insight into NHS matters in the North West of England, with a particular focus on the devolution project in Greater Manchester. By Lawrence Dunhill

Pulling the plug on mental health

The NHS’s financial woes have been largely contained to the provider sector so far, but changes in the tariff mean the axe is increasingly swinging towards commissioning budgets.

As well as the 3 per cent average efficiency requirement in 2016-17 (up from 2 per cent last year), clinical commissioning groups have been forced to hold back 1 per cent of their total allocations in case of continued overspending in the acute sector.

Simon Stevens himself has warned this “contingency fund” – worth around £800m – may need to plug holes in the hospital deficit, instead of being spent on mental health, community or primary care.

Mental health services in Eastern Cheshire have already lost out, however, with a children’s and adolescent mental health provider having to turn patients away after planned investment was suspended.

The CCG had planned to invest an extra £409,000 this year, but pulled the plug on the extra cash once it became clear that effective savings of 6 per cent would be required by NHS England.

An NHS England spokeswoman was factually correct in saying it had not prevented the CCG from spending money intended for CAMHS, and that “it’s for the CCG to decide the actions required to meet its financial and statutory obligations”.

But with a new savings requirement of £16.4m against an income of £276m, that doesn’t quite give you the whole picture.

Justify your paybill

The pressure on NHS trusts to control their finances has ramped up another notch in the last fortnight, with regulators openly talking about the possibility of reducing staff numbers.

This is a significant change in tone, but with the Department of Health under severe pressure from the Treasury, “smarter working” and “doing things more efficiently” just don’t cut it anymore.

Twelve trusts in the North West (see list below) are among the 63 nationally that will have to justify their paybill increases to NHS Improvement as part of the financial “reset” announced last month.

North West trusts with “significant growth” in their pay bill

  • Aintree University Hospital Foundation Trust
  • Bridgewater Community Healthcare FT
  • Countess of Chester Hospital FT
  • Lancashire Teaching Hospitals FT
  • Liverpool Heart and Chest FT
  • Liverpool Women’s FT
  • Mid Cheshire Hospitals FT
  • Salford Royal FT
  • Tameside Hospital FT
  • University Hospital of South Manchester FT
  • University Hospitals of Morecambe Bay FT

The decision to publish the list – and imply the organisations may have over-recruited – was heavily criticised by some local leaders, not least Karen James at Tameside Hospital, who told HSJ “we are not over-staffed whatsoever”.

NHSI has since clarified the message, saying it only intended to “start a discussion”, but trusts will still need to persuade the regulator that the increases were necessary. What is “necessary” will be far from clear in many cases, and there is a risk of this being driven from the financial side.

Others will follow Stockport

Meanwhile, Stockport Foundation Trust has actually gone ahead and outlined plans to reduce its paybill, revealing that it may have to cut its workforce by 7 per cent, or 350 full-time posts.

Stockport was not among the 63 identified by NHSI, but has been working with KPMG as part of the regulator’s turnaround programme.

Credit should go to Stockport for being open with staff about the plans, rather than gradually shedding posts and hoping no one noticed.

I understand there has been some unease at the council at the perceived lack of engagement over the plans, however. Given the two organisations are closely involved in the borough’s ”Stockport Together” vanguard project, this is perhaps more worrying than it would otherwise be.

It seems likely that more trusts will start coming forward to announce similar workforce reductions, starting with others in the turnaround programme and on the NHSI list.

With the prospect of a series of high profile “save our NHS” campaigns spreading across the country, it will be interesting to see the government’s response.

North by North West takes an in-depth fortnightly look at one of the NHS’s most challenged and innovative regions. There will be a particular focus on the devolution experiment in Greater Manchester, but my scope will also include Merseyside, Lancashire, Cheshire and Cumbria.

Please get in touch to let me know how I can improve it, and to tip me off about stories you think I should cover: lawrence.dunhill@emap.com. If someone forwarded this to you, sign up to get your own copy here