Capital constraints pose risk to safety and transformation

In a survey, 82% of chief executives and chief finance officers said the limited availability of capital was posing a medium or high risk to patient safety. Almost all of those surveyed (97%) said capital constraints were hampering the delivery of transformed services, as set out in the NHS long-term plan. The survey received 200 responses from 143 trusts.

NHS Providers called on the government to address the issue of capital funding in the forthcoming spending round.

The NHS had been waiting for the outcome of the spending review to receive news on capital funding over the next five years. However, with the uncertainty over Brexit, the Treasury decided to limit the review to a single year – 2020/21 – with a multi-year review to take place in 2020.

Chancellor Sajid Javid was due to announce the results of the one-year spending round on 4 September, but as Healthcare Finance went to press, it was unclear what would be announced.

The Treasury said the spending round would deliver on the prime minister’s priorities, including health. But it added that Mr Javid’s announcement would focus on revenue spending – capital budgets are already in place for 2020/21, it said.

However, the government has already revised capital funding since Boris Johnson took power in July. In one of his first policy announcements, the prime minister pledged £1.85bn in capital for the NHS – £1bn was allocated as a one-off capital boost for 2019/20, with the remaining £850m to be spent on 20 capital projects.

NHS Providers insisted this funding could only be considered a first downpayment on the funding required. It called on the government to set out a multi-year capital settlement; commit to bringing NHS capital budgets up to levels in comparable countries; and establish an efficient, effective mechanism for prioritising, accessing and spending NHS capital based on need.

Next year, 2020/21, is the final year of the 2015 spending review period and figures for the final year are often revised in a new spending review. According to the last Budget, the overall capital available to health (the capital departmental expenditure limit) in 2020/21 – before the recent boost in funding – was due to be £6.8bn.

HFMA members are not only concerned about the overall limit on capital spending, but also about the availability of capital funding. Not all bodies have internally generated resources to fund capital projects or the freedom to use them. Many also point at the complexity of the system for managing capital, which often involves bidding for separate pots of funding.

In its 2018 briefing, NHS capital – a system in distress, the HFMA called for a simplification of the system that allows NHS organisations access to capital and for the process to be made more transparent.

NHS Providers chief executive Chris Hopson said a capital funding settlement was needed to rebuild the NHS. He highlighted the impact of capital constraints, citing the A&E department at Kettering General Hospital NHS Foundation Trust, which was seeing three times more patients than its intended capacity. This was compromising care, NHS Providers said.

Mr Hopson added: ‘We know the government shares our aim of a properly funded, well-designed system of capital funding, but this support needs to be translated into urgent action because the risk to patients is rising every day.’