News / FYFV calls for higher funding and significant savings

While the forward view said the NHS must transform services and encourage greater population health, it concluded that extra spending would be required to close the £30bn funding gap up to 2020/21. It acknowledged the need for economic growth to fund spending.

NHS efficiency gains have averaged 0.8% a year over the long term, it said, but in recent years it has been 1.5%-2%. Making efficiencies of 2% a year for the next five years would be a strong performance and possible, it said. It could even rise to 3% towards the end of the period, if investment were made in new care models, action taken on prevention, social care services sustained and a bigger proportion of efficiencies came from wider system improvements.

The FYFV floated three funding and efficiency scenarios. In the first, flat real-terms spending (an extension of the current budget protection) and delivering the long-term efficiency average of 0.8%, would cut the productivity gap by a third to £21m. In scenario two, the budget remains flat, but the NHS delivers efficiencies of 1.5% a year. This would halve the gap to £16bn. In the third scenario, the NHS receives the investment needed to rapidly move to new
care models, which leads to demand and efficiency gains of 2%-3% net each year. Combined with flat real funding per person, accounting for population growth, the gap would be closed. In this scenario, the NHS would need an extra £8bn above inflation over the five-year period.

The forward view was endorsed by NHS England, Monitor, the Care Quality Commission, Public Health England, Health Education England and the NHS Trust Development Authority. They said that while England was too diverse for a one-size-fits-all approach, they would not allow a ‘let a thousand flowers bloom’ model. Each area would choose from ‘a small number of radical care delivery options’.

The forward view showcased two options:

•  Multi-speciality community providers, where GPs, hospital specialists, community health services and maybe mental health and social care providers integrate out-of-hospital services
•  Primary and acute care systems (PACS), integrated hospital and primary care providers combining general practice and hospital services, similar to accountable care organisations.

In some circumstances, foundation trusts would be allowed to open their own GP practices. FTs’ accumulated surpluses and borrowing powers would be harnessed to kick start primary care services in these areas. But there would be safeguards to ensure they did not become feeder systems for hospital services.

NHS England chief executive Simon Stevens said the NHS had weathered recent financial and demand pressures. ‘But the NHS is now at a crossroads – as a country we need to decide which way to go,’ he continued.

‘It is perfectly possible to improve and sustain the NHS over the next five years in a way that the public and patients want. But to secure the future that we know is possible, the NHS needs to change substantially, and we need the support of future governments and other partners to do so.’

HFMA policy director Paul Briddock said: ‘The HFMA welcomes the Five-year forward view and the recognition that the forecast £30bn shortfall by 2021 cannot be recovered purely through efficiency savings.’

The association also supported the call for major changes in the way services are delivered, in tandem with the additional funding.