Lord Kerslake’s resignation shows that speaking out is still hard for NHS leaders – and should be a red flag for ministers, writes Rob Whiteman

The resignation of Lord Bob Kerslake, one of the most experienced public finance professionals of recent decades, from King’s College Hospital Foundation Trust is a sobering reminder of the significant pressures being experienced in the health and social care system – and across public services more widely.

A former finance director, much lauded local authority chief executive, permanent secretary and head of the civil service, Bob appeared to have the ideal provenance to help bring trusts like King’s back from the financial precipice. An acknowledged national expert on housing too, he embodies the kind of system leadership needed to complement a track record of organisational grip. More importantly, as anyone who has worked with him will attest, the word that most springs to mind with Bob is integrity. He is just about the straightest, most honourable person you will come across. His resignation should serve as a warning to the government that urgent and drastic action is needed, otherwise the financial resilience of the system will continue to be undermined.

It is not just a matter relying on extra money – the NHS must continue to take measures to encourage good financial discipline

But his departure isn’t the only red flag. Highly publicised increases in emergency waiting times, delayed discharges, NHS staff shortages and the worst crisis ever in adult social care – brought about by the biggest cuts to local government in 70 years – cannot be swept under the carpet.

Last year, CIPFA estimated that on our present course there will likely be a £10bn financial black hole in NHS finances by 2020, as the floundering Five Year Forward View assumed there would be £30bn in pressures and £22bn savings, both of which now seem optimistic. Since then, STPs have come in but the broad nature of the problem has not materially changed.

So what can be done? An immediate cash injection, greater than the £1.6bn promised in the budget, would help alleviate some of the immediate pressures. Additionally, more resources for the NHS and social care over a longer period would also help sustain and transform the sector if used wisely.

Of course, as Jim Mackey pointed out in his recent interview with the HSJ, it is not just a matter relying on extra money – the NHS must continue to take measures to encourage good financial discipline. This should include a full assessment of pressures and savings plans, with sensitivity analysis, risk assessment, back up plans for worst case scenarios and explicit identification of the short, medium and long term consequences of decisions.

Furthermore, the fact that health spending has risen to 9.9 per cent of UK GDP, in line with the median of OECD countries, demonstrates that the issues the NHS are facing are not only to do with financial resources. Sadly, the Lansley reforms aggravated rather than solved the longer standing issues of the purchaser/provider split. A laudable strategy of whole population health, partnership working and accountable care systems is being crowded out by wasted effort and a lack of direction nationally and locally.

Some trophy scalps are usually deemed necessary pour encourager les autres

Organisations and local systems need strong, expert and fearless governance to get around the barriers to progress created by the Lansley reforms and the purchaser/provider split. Effective commissioning is vital to the future and it is not as simple as just giving the all the money to providers. That would only serve to make our lack of investment in prevention and public health even worse.

It is in this context that Lord Kerslake’s resignation is a concern and pointer to a tension that will not easily go away. The mood music maintains that his former trust requires special measures and needs national intervention or an assurance process to be considered a success.

There is no question that for decades this type of action has helped to maintain the national control total. Some trophy scalps are usually deemed necessary pour encourager les autres. Current policy dictates the NHS is not a single organisation but a system of organisations that need to work in partnership through effective boards and new, more local, accountability structures.

Lord Kerslake feeling the need to stand down, though driven by a lifelong desire to serve the public, shows that speaking out is still a damned hard thing to do for NHS leaders. They must be able to call out the pretence that failure is always the result of poor local leadership rather than, so often, a result of the disastrous Lansley reforms.

Rob Whiteman is chief executive of the Chartered Institute of Public Finance and Accountancy