A system in crisis

NHS reorganisation

The 5 Year Forward View (5YFV) from 2014 set out the policy for the NHS within a context of the wider care system. It argued that by 2020 the NHS required additional funding of £30bn pa; which was to be met by £22bn of efficiency savings leaving £8bn for additional government funding. Key assumptions were that demand will grow at 3%pa (half through demography and half as quality improvement); provider efficiency will be at 2%pa rising to 3%pa in last 2 years; provider cost inflation at 3%pa. A key feature was “Transformation” with big changes to introduce a range of new care models – to be tried out initially in Vanguard projects across the country and with some funding specifically to support this transformation.
Based on the rationale of the 5YFV the Spending Review in 2015 agreed to a funding settlement for the NHS which did provide the £8bn increase in 2020 with a significant amount of front loading. This was widely promoted as being the government agreeing to fund the NHSs own plans for sustainability.
Investigations in particular by the Health Committee, Kings Fund and Nuffield Trust have all shown considerable scepticism over the reality of the assumptions behind the 5YFV and the progress so far has been limited. There was little confidence that the efficiency gains could be made even if funding was available for transformation. The £8bn promised turned out to be more like £5bn.
Tin 2015/15 there was the biggest deficit in the history of the NHS with provider recurrent deficit at £3.7bn; made worse by the dreadful state of the social care system. Funding for social care has not had the same public attention but the concerns are even greater.
Progress with the 5YFV is being developed through 44 local Sustainability and Transformation Plans (STPs) which carry some funding for localities that agree on a broad approach to resolving long standing issues. The STP process brings together local stakeholders, especially local authorities, and each STP has a Chair and an Executive Lead (variously from NHS and from LAs) as figureheads. STPs come in all shapes and sizes.
STPs have no actual statutory or other powers or duties and operate alongside the current legal frameworks and guidance. They are there to facilitate difficult change programmes which cross organisational boundaries. Most of the funding allocated for Transformation, to allow significant reconfiguration of services, flows via these STPs but this money has had to be used to plug deficits in the acute sector.
With one exception details of the STPs are being kept secret. Such summaries as have been prepared for the public to be allowed to see show all STPs rely on assumptions about moving care closer to home; reducing A&E attendances and emergency admissions; and making services better integrated – all changes to be welcomed but which have been shown to be very hard to deliver and very unlikely to produce any costs savings even in the longer term. The plans appear to be simply an exercise in showing unrealistic paths to bring financial sustainability.
The governance around STPs is opaque and there is little or no evidence of participation by staff representatives and patient groups. An assurance has been given that once the STPs have been agreed (expected to be in October) then they will be published.
Alongside the 5YFV is the Better Care Fund which relies on funding from both the NHS and Local Authorities. By 2017 there has to be a plan for full integration between health and social care by 2020 – there are 150 Better Care Plans in line with authority boundaries. Again access to the “pooled” funding depends on approval of plans. It remains unclear how Better Care Plans align to STPs as they cover different footprints and are based on different assumptions.
A recent development has been what appears to be a Treasury led initiative, “the Reset”, which has the main aim of bringing the providers back into financial balance as soon as possible. Of special significance is the setting of control totals for both providers and commissioners with threats of severe consequences for those that do not meet the targets. This fits into a planning cycle which is also geared to delivery of the 5YFV and the STPs and the operation plans of the myriad NHS bodies.
The reset approach required specific attention to three areas; tackling pay bill growth, implementation of Lord Carter’s recommendations on back office cost reductions, and the consolidation of unsustainable services. This is backed by a wide-ranging seven-point set of actions being taken by NHS Improvement, NHS England with the support of the Department of Health and the Care Quality Commission (5 separate autonomous bodies!!) which included the introduction of new intervention regimes of special measures which will be applied to both trusts and CCGs.
There is also, for no obvious reason, a new emphasis on involvement of the private sector. Whilst the trend for slow but steady increases in private sector provision of NHS services has continued most recent developments have been about failed procurements, failed contracts and poor delivery by private providers. The STPs appeared initially to rely on ignoring the previous enthusiasm for competition and market forces with instead moves to integrate, consolidate and collaborate.
In the real world no serious commentator (and no senior NHS manager) believes the NHS can deliver the current services, function safely, improve quality, move to 24/7 working and be financially sustainable. Something has to give and the current approach with an emphasis on finances implies service cuts and reductions in standards.
It is worth stating that STPs have neither powers no duties and so all the duties placed on CCGs and Trusts remain – specifically around engagement and consultation on any service changes – the STPs offer no route to remove what will inevitably be resistance to cutting services.
So in short the £8bn deal was a rip off – there is no £8bn. Cuts to capital spending, public health, social care and health education and training are all impediments to the delivery of the 5YFV. The first year of the plan has gone the wrong way. A reintroduction of a regime of targets and terror is just more bullying and counterproductive. More use of the private sector will be a continuing disaster. Failure regimes will fail.
The local STPs are mostly wishful thinking and lack credibility even amongst those that contributed. Publication will lead to arguments and protests almost everywhere.
The real problems are lack of funding – especially for social care; lack of coherence in the system; instability and fragmentation – all linked to a lack of morale and other growing workforce issues. The 5YFV does not address the real issues so it will fail.