Key questions remain

In making his Budget speech last month chancellor Philip Hammond insisted there was ‘no single magic bullet’ to solving the housing crisis. There was also no evidence of the much talked about magic money tree when he turned his attention to the Budget’s other key issue – the NHS.

There were extra funds – this year and for the next two years. But the sums fall far short of the amounts needed to face the service’s urgent and growing financial challenges.

The £335m ‘to help the NHS increase capacity over winter’ in the remainder of this year is undeniably welcome. However, the context, as is underlined by the HFMA’s latest NHS financial temperature check, is that this figure represents less than half the deficit/overspend that providers and clinical commissioning groups were forecasting for the year-end at the half way point in the year.

Some commentators have pointed out that the late allocation of the funds makes it harder to spend in a value-for-money way than if local organisations had been able to plan for the extra funds. This is definitely the case. However, even if in reality the extra funds go straight to the bottom line, reducing those forecast deficits, it will be of value. 

Quarter two figures show that 111 providers were (pre-Budget) expecting to be in deficit by year-end. Month seven commissioning sector figures from NHS England make similarly uncomfortable reading. 

Extra funding that moves organisations closer to control totals will reduce the pressure on organisations that are battling pressures and demands, many of which are outside their direct control.

If nothing else, that should lift morale a little and maybe stave off some – but not all – difficult decisions on further cost improvements in the remainder of the year.

The additional funds for 2018 and 2019 are also clearly welcome, although there are lots of questions still to be answered about the seemingly non-recurrent nature of these funds and the realism of tying them to improvements in efficiency and productivity. 

There will be a lot of head-scratching about the government’s plans to meet the capital investment requirements identified in the Naylor review – particularly around the level of ambition in asset sales and on the role of private finance.

The additional funding certainly improves the service’s prospects, but in no way does it solve the sustainability question. Providers will carry underlying deficits into the new financial year and be expected to make progress on access targets while also targeting moves towards a reduced deficit or balanced position. 

There is good agreement that new models of care – more prevention, more support in community settings and earlier intervention when appropriate – hold the key to delivering more sustainable services. 

The debate continues to be around how quickly the NHS can be expected to deliver these new models and how it copes with very significant demand pressures in the meantime. Having to continually firefight in-year finances is not the best platform on which to develop plans for transformation. 

The question about funding and timeframes has not been changed by the recent Budget announcement. The pitch of the warning bell has merely dropped a notch or two.

The reality is that the NHS faces difficult decisions about what it can deliver with the money available – a point underlined in NHS England’s pragmatic board paper at the end of November setting priorities for next year and being clear about what can’t be achieved.

NHS England chief executive Simon Stevens evoked the Brexit battle bus in a pre-Budget presentation, suggesting that Leave Europe voters would expect promises to better fund the NHS to be honoured. The point is that a properly resourced health service is a key priority for the public and it now needs to continue to be engaged in the very real challenges facing the NHS.