Comment / The right number

30 May 2014 Andy Hardy

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Image removed.What is the right number? This question has been rehearsed a little in the recent local and European elections – across wide-ranging topics. But we are going to hear it a lot more in the run-up to the expected general election in May next year.

For the NHS, I think the question will relate to three things. How much money do we need to spend in 2015 and beyond? What is the right number of commissioning organisations in the NHS? And what is the right number of provider organisations?

All three questions are massive and not easily answered. But if we start to address these questions now, as finance professionals, they will provide a real opportunity for us to step up and, to reference my theme for the year, to ‘lead by numbers’.

On the funding issue, we know the NHS has been relatively ‘lucky’ during the current parliament to enjoy real-terms growth (however minute). The fact is, even with this growth, we are seeing an increasing number of organisations – and in particular many in the acute sector – falling into deficit.

I cannot believe this is a result of falling standards in financial control and management. I am sure it reflects the increasingly challenging financial environment.

This, then, is the baseline for moving forward. There has been a recent focus on UK healthcare spending as a proportion of gross domestic product. We spent a decade increasing this key metric, moving towards the European average. But this has started to fall back and there are now suggestions that this could reduce more drastically over the five years from 2015 if we assume zero real increases in funding.

Clearly, any decisions about NHS funding beyond 2015/16 will be for the new government, but there are commentators who think the special ring-fence for healthcare won’t continue. We know such a scenario will lead to questions over what and where we can provide services moving forward. As finance professionals, we need to be leading the debate on how much money is needed for the NHS and what those funds can deliver.

I also believe it is inevitable that, following the massive restructuring within health and social care, post-election there will be calls to review the commissioning and commissioning support architecture. Do we have the right number of clinical commissioning groups and how should NHS England be setting up its area offices and teams? It is imperative that we, as finance leaders, face up to these questions, and ensure that we are around the table to contribute to this debate.

But this is not just a commissioning issue; we also need to ensure we have the right number of NHS providers. It is already clear, as a result of clinical and financial sustainability issues, we will see a reduction in the number of provider organisations during the next government. This does not necessarily mean a reduction in sites or hospitals, from which services are delivered to patients. But it may involve services moving to more appropriate settings. The debate is politically sensitive, locally and nationally, but that doesn’t mean we can shy away from these decisions.

It is a difficult path to tread at any time, but more so in the run-up to an election. We need to lean on our professional training and ensure there is a good evidence base for these important, wide-ranging discussions. Our role in the run-up to, and following, the general election remains exactly the same – to ensure we gain the most value for every pound spent on healthcare.