• Treasury spending review leads to 2 per cent cut in education and training cash paid to NHS providers in 2016-17
  • Health Education England will offset the cut this year as a one-off move to prevent destabilisation
  • NHS Providers warns cuts are not sustainable in light of wider financial pressures

The funding used to support NHS trusts for training nurses, doctors and other healthcare staff is being cut by millions of pounds by the Department of Health, HSJ can reveal.

The education and training tariff, worth approximately £2.4bn, is used by Health Education England to pay NHS trusts for the costs of training staff, and includes contributions to junior doctor salaries. HSJ has learned it is being cut by 2 per cent in 2016-17, following a 1.9 per cent cut in 2015-16.

To prevent the £48m cut from “destabilising” some providers, HEE will offset it this financial year with a one-off payment to trusts. However, the calculation for next year’s tariff will start at the 2 per cent lower level, meaning a direct loss in funding for NHS providers in 2017-18 before any further reductions are calculated.

The reduction is a result of the Treasury’s decision to remove HEE from the ringfence around health spending in last year’s spending review, which left the education and training body needing to make £70m of savings this year.

In its latest tariff guidance document, the DH said HEE was facing significant cost pressures due to a 4 per cent increase in the number of trainees in the system since 2014-15. “These pressures, coupled with other unavoidable cost pressures, such as the impact of tuition loans increasing from £3,000 to £9,000 for medical and dental students, results in HEE having to make some difficult choices to enable it to live within this settlement,” it said.

“As a result, there is a requirement for HEE to reduce each of the 2016-17 tariff prices by 2 per cent against the equivalent 2015-16 prices.”

It added: “The tariff price will be the starting point for the calculation of the 2017-18 tariff prices to ensure that HEE remains within its funding settlement.”

Paul Myatt, workforce policy adviser at NHS Providers, said: “As provider trusts face the huge challenge of achieving financial balance, maintaining quality and delivering new care models, any reduction in the education and training tariffs which enable them to fund the training of frontline staff will make that task harder.

“While it’s welcome that for this year the 2 per cent reduction in training tariffs will be offset by cash payments, we are concerned that trusts will now have to deal with a potentially bigger drop in the tariffs next year.

“This would come at just the moment during the middle years of this Parliament when NHS funding will be at its tightest and start to tail off from the ‘year of plenty’ in 2016-17. Pushing down the training tariff must therefore be avoided.”

The education and training tariff was set up in 2013 to tackle variations in funding across the country for non-medical staff and was extended to medical posts in 2014.

An impact assessment on the creation of the tariff in 2013 said medical students costs varied by between £10,000 and £90,000 per placement. It said introducing a national tariff would result in “a fairer reimbursement” for providers to create a “fair playing field” across the NHS.

Last year HSJ revealed the impact of the tariff on trusts. Some of the country’s largest teaching hospitals had seen their education and training income fall by millions of pounds.

One NHS workforce director told HSJ: “Education quality is being squeezed through unrelenting rising demand for hospital care, against the backdrop of a lack of workforce supply in certain specialities and unrealistic funding settlements (not just the tariff) and is relying on the goodwill of committed and dedicated clinical and managerial staff to protect it.

“This will not be sustainable if tariff continues to reduce and HEE educational quality standards remain unchanged.”