Chris Hopson discusses the recently released 2019-20 planning guidance, which aims to help providers start recovering their financial performance
The NHS has published two planning documents this week – the long term plan and the 2019-20 planning guidance. Whilst most of the attention will be on the long-term plan, next year’s planning guidance will have a more immediate impact on the provider sector. What will providers think of it?
The context is important. NHS trusts have been struggling for four years with a difficult combination of rising demand, the biggest financial squeeze in NHS history and growing workforce shortages. Despite frontline staff working flat out, the NHS has fallen behind.
Patient access to care has suffered, trusts have been running persistent financial deficits and frontline staff have had an unsustainable workload. Trusts needed to see how the first year of increased NHS investment could start to deliver the linked objectives of recovering performance, addressing workforce shortages and heading back to financial balance.
Providers will welcome the new financial regime, designed to move from a position where financial deficits have become the norm, especially in the acute sector, to one where the vast majority of trusts are in surplus.
Moving from deficits to surplus
The guidance seeks to achieve this in two ways. First, by “reflating” the provider sector: increasing tariff prices by 3.8 per cent (though this mostly goes on pay inflation), redirecting £1bn from the Provider Sustainability Fund into emergency care prices, and abolishing the marginal rate for emergency admissions.
Control totals will be rebased to 2017-18 outturn, funding routed through commissioning for quality and innovation is halved and there’s a lower 1.1 per cent efficiency requirement compared to previous years. This package should start to undo the financial damage that’s been caused by deliberately pegging back the tariff and setting unachievable efficiency targets.
But some trusts will remain in deficit. So there’s also a new £1bn provider recovery fund to support their return to surplus.
Control totals will be rebased to 2017-18 outturn, funding routed through commissioning for quality and innovation is halved and there’s a lower 1.1 per cent efficiency requirement compared to previous years
There’s a lot of detail to agree here, much of it tricky, such as who accesses the fund, to what extent, and how to tell the difference between a legitimate structural deficit and one where it’s reasonable to expect the trust to do better.
NHS Improvement/England will need to work hard, in close collaboration with trust leaders, to create a fair and consistent approach that commands support across the sector.
Over the last few years, providers have been set an impossible task and, when they inevitably failed, NHS England came to the rescue with the provider sector deficit offset by an NHS England/commissioner surplus.
The welcome new approach – shifting the commissioner surplus to the provider side to help give trusts a reasonable task – provides a great opportunity to return to surplus. But it also brings new risks.
Every single trust will need to make its own contribution as there will be no NHS England back pocket to cover anyone who falls behind. We also shouldn’t underestimate the size of the task, so the recognition that returning the sector to surplus cannot be achieved overnight, and could take some trusts five years, is also welcome.
Two quick final observations on the money. It’s not going to be easy to balance the competing long-term plan commitment to invest more in mental health and community / primary care and recovering financial deficits which lie in the acute sector.
And there’s also an important balance to strike between individual institutions and systems – for example, the efficiency requirement sits with individual providers despite trust leaders believing the biggest opportunities now lie in better system working.
Workforce and performance
On workforce, trusts will welcome the intent to rapidly address current staff shortages. But they’ll be concerned that some issues, and a full plan, will need to wait for the spending review.
It’s welcome that the new national workforce group will take quick, co-ordinated, purposeful action in areas that trusts and NHS Providers have been highlighting for some time.
These include speeding up overseas recruitment, quickly maximising the clinical permissions that newer job roles can exercise and tackling long standing pension issues. The new group must fully involve frontline trust leaders and their representatives in its work.
On recovering performance, the guidance acknowledges that current performance is short of where it should be but says that a recovery plan needs to wait for a new set of performance targets that reflect up to date clinical practice.
Every single trust will need to make its own contribution as there will be no NHS England back pocket to cover anyone who falls behind. We also shouldn’t underestimate the size of the task
Trusts are ready to look at modernising targets but will not want to abandon the hard won improvements in waiting times and patient care the NHS delivered in the 2000s. Any recovery trajectory needs to be properly planned and fully funded and staffed.
We will also need a full, evidence based debate to change the current NHS constitutional standards and appropriate time to operationalise any new targets. The six month timetable suggested for achieving this seems ambitious.
It’s worth adding that the single biggest factor affecting the NHS in 2019-20 may well be the impact of Brexit, should it proceed, particularly if there is a no deal Brexit. Trusts tell us they are completely reliant on national level contingency planning and remain concerned at the short timetable and the range and complexity of tasks that need to be managed.
In short, the planning guidance sets out the first steps on the path back to a sustainable NHS, with the right care for patients and a reasonable workload for staff. Good work has been done to enable providers to start to recover their financial position.
But there is a lot of hard work to do and we must remember that the extra financial investment is not a bonanza – there simply isn’t enough to meet every aspiration.
- Acute care
- Finance and efficiency
- Foundation Trust Network (NHS Providers)
- Mental health
- NHS England (Commissioning Board)
- NHS Improvement
- NHS long-term plan
- Planning guidance
- Policy and regulation
- Primary care
- Quality and performance
- Waiting lists