Not just about change

The images of over-stretched A&E departments during January have made for harrowing viewing. We have known for some time that access targets are slipping. But patients held in queuing ambulances or waiting in busy corridors for a bed to become available are very visible indicators of a service not able to deliver the standards of care that it wants to.

And – as HFMA president Alex Gild says above –this is despite the often heroic efforts by staff and the deferral of elective procedures and treatments.

That, perhaps, should be all anyone needs to see to understand that changes are essential to help the NHS deal with current levels of demand. Yes the service needs to be transformed – new models of care supporting people out in the community and much greater levels of prevention – but it also needs more money right now. In fact, the failure to provide more funding in the short term is actively stopping systems from focusing on the hugely important task of making services sustainable for the future.

The latest report from the National Audit Office – Sustainability and transformation in the NHS – underlines the point. This is hardly a body known for hyperbole or emotive language. But its conclusion is emphatic. Funding that should have been used to move towards sustainability has had to be used to meet existing pressures.

‘Repeated short-term funding boosts could turn into the new normal, when the public purse may be better served by a long-term funding settlement that provides a stable platform for sustained improvements,’ the NAO’s head Amyas Morse said, as the report was published..

Commissioners and trusts reported a combined surplus of £111m in 2016/17, which looks commendable given that average real-terms growth between 2014 and 2021 is around 1.9% – well below the long-run average of 3.7%.

But you don’t have to look far beneath the surface for signs of extreme financial strain. Trusts reported an improved, but still sizeable, £791m deficit for 2016/17. While overall commissioner underspends offset this, more local commissioners reported a cumulative deficit than the previous year.

And short-termism was evident in measures such as the transfer of £1.2bn of capital funds to revenue budgets. This comes at a time when the service is in desperate need of capital funding to help make a reality of sustainability and transformation partnership system re-engineering plans.

(The NAO’s other report in January on the private finance initiative and its replacement, the PF2, did not set out to form a view of the value-for-money of PFI, but it did point out that there is still a lack of data on the benefits of private finance procurement. Private funding seems unlikely to fill the NHS capital gap any time soon.)

According to the NAO, national bodies gave £4.1bn in financial support to trusts outside of service contracts with commissioners, which it said ‘does not support effective planning’.

Delivering funds in this uncertain way can push trusts into making ambitious assumptions over capacity and workforce pressures and to operate without the necessary headroom to deal with one-off increases in demand – let alone the sustained increases we have seen over this winter.

The preoccupation with short-term funding is hardly a good basis for developing the right incentives in the system to drive the right behaviours. The current payment system is known to have flaws. At its heart, it doesn’t encourage system-wide responses to meeting patient and population needs. But no payment system will help deliver the right outcomes if the quantum of funding is insufficient.

There is huge potential for transformation – new models of care underpinned by capitation-based funding approaches – to move the NHS towards a much greater level of sustainability. But if we ask too much of it, it will fail before it has had a chance.