• NHS Improvement discussing potential scheme with the Department of Health
  • Comes after regulators confirmed trusts able to meet or better their control total will receive “bonus” payment
  • Trusts have previously been warned over the scarcity of capital funding in coming years

Regulators are seeking to give “preferential access” to capital funding to NHS trusts able to better their financial targets in 2016-17, HSJ has learned.

According to a guidance document sent to providers, NHS Improvement is discussing the potential scheme with the Department of Health.

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NHS Improvement said it was ‘essential the provider sector delivers the 2016-17 control total’

It comes after regulators confirmed last month that trusts able to meet or better their financial control total this year will receive an additional “bonus” payment, on top of those due from the sustainability and transformation fund. This can be invested in capital projects in line with the relevant guidance.

Trusts have previously been warned over the scarcity of capital funding over the course of this parliament. The capital budget has been frozen in cash terms for the five years of the parliament, and will be reduced even further to prop up revenue budgets.

The guidance document, seen by HSJ, said: “We are in discussion with the Department of Health about the NHS provider capital strategy and have suggested that providers that outperform the 2016-17 control total should have preferential access to capital approvals. This has yet to be agreed.”

Concerns have previously been raised that rewarding organisations that meet their targets with additional funding could “exacerbate” problems for struggling trusts.

The document also stressed the need to ensure the “credibility of the provider sector”, adding: “It is essential that the sector delivers that 2016-17 control total, which is a £580m deficit on a turnover of circa £79bn.”

It says access to £1.8bn of STF support in each of 2017-18 and 2018-19 is “predicated on delivery of the 2016-17 control total”.

Midway through 2016-17 the provider sector was officially forecasting an outturn deficit of £670m.

Elizabeth O’Mahony, director of finance at NHSI, said: “Providers are working extremely hard to tighten their belts and deliver their 16/17 plans. 

“A revenue incentive scheme has been introduced to support providers that can outperform their plans to offset slippage elsewhere in the sector and, whilst it has not been agreed yet, we agree that trusts that perform well and meet their stretching control totals should have preferential access to capital approvals in future.”