10-year plan to focus on efficiencies

Over the weekend it emerged that the government will increase funding of the NHS in England by an average of 3.4% a year over the next five years. This was confirmed by prime minister Theresa May (pictured) today and it means the NHS budget will be £20.5bn higher in real terms by 2023/24.

The devolved nations will receive additional funding through the Barnett formula, though how it will be spent will be up to the local executives.

Further information was given today in a speech by Mrs May, though the NHS may have to wait until the Budget to hear the full details. However, the funding increases will reportedly amount to 3.6% in 2019/20 and then 3.6%, 3.1%, 3.1% and 3.4% in the following years.

She said the 10-year plan must ensure the additional funding is spent well: ‘It must be a plan that tackles waste, reduces bureaucracy and eliminates unacceptable variation, with all these efficiency savings reinvested back into patient care.’

Speaking at a Commons Public Accounts Committee hearing this afternoon, NHS England chief executive Simon Stevens confirmed the NHS will receive an additional £1.25bn in 2019/20 – on top of the 3.6% rise – to cover additional pension costs. Factoring that in, the growth in the NHS budget next year will be closer to 4.6%, he added.

And, while the service will receive additional funding this financial year to cover the cost of the new Agenda for Change pay deal, this would then be included in the NHS baseline for future years.

'On a like-for-like basis if you factor in the additional money we got for pay this year and compared that with our costs for next year, you could say we are at about 3.1% real growth this year compared with 3.6% growth next year,' he added.

The BBC said the 10-year plan, due to be published before the end of the year, will focus on four areas: workforce, technology, buildings and productivity.  

Writing in the Mail on Sunday, Mrs May said; ‘To deliver, this plan must be about more than money. If the NHS’s bureaucracy does not continue to become more efficient, some of our funding increases will be swallowed up before they reach the front line. So in return for the budget increases, we will hold NHS leaders to account for delivering even better services.’

She added there should be particular focus on prevention, mental health and cancer, with sharing of best practice to reduce waiting times for all services.

The government would support the introduction of new technology to transform services and there would be further integration of health and social care. ‘Too many vulnerable older people still cannot move seamlessly between health and social care services – and this is a problem we must solve. So as we develop our long-term plan we will bring forward new proposals to integrate services and put social care on a sustainable footing.’

HFMA chief executive Mark Knight said: ‘The announcement of extra funding for the NHS is much needed and welcome recognition from the government of the financial stress the NHS has been under over recent years.

‘However, it is less than we had hoped for. Any additional funding is welcome, but we need to recognise that an average annual real terms increase of 3.4% is below the average of 3.7% annual growth since the creation of the NHS in 1948. The extra cash will help address current shortfalls, but it is unlikely to be sufficient to meet ever-increasing demand, support the transformation and integration of services, and improve services such as cancer and mental health.’

It was important to look beyond the NHS, he added. ‘We also cannot look at the NHS in isolation, we need to see parallel investment in social care and public health. NHS organisations are also facing a lack of capital funds, with many struggling to operate with outdated buildings and equipment.

‘We look forward to seeing additional detail supporting the announcement, including the impact on the wider health budget. But it looks like the NHS is not out of the woods and difficult choices will have to be made – not only about how the new funds should be spent, but the entirety of the NHS budget.’

NHS commentators were unanimous in welcoming the funding increase – but there were concerns about the sufficiency of the settlement, the plans for the broader health budget and the lack of any corresponding investment in social care. 

NHS Providers’ chief executive Chris Hopson said ‘the immediate task ahead is significant’. ‘After almost a decade of austerity, the NHS has a lot of catching up to do, just to deliver the standards of care the NHS constitution requires,’ he added. We must be realistic about how far this funding, and productivity gains, will go – there will still be difficult choices to make about priorities. We must also recognise that, without adequate support for social care, the NHS will always be held back.’

Niall Dickson, chief executive of the NHS Confederation, gave credit to the prime minister and health secretary for securing a longer-term settlement but it would take time to turn services around. ‘We must be realistic – this sum falls some way short of the 4% extra-a-year figure which the independent report we commissioned said was required to bring even modest improvements given the huge additional demands on the NHS,’ he said. ‘The truth is that in spite of this welcome extra investment we will face hard choices. The government says it will make sure the NHS does not come under more pressure as a result of social care pressures - that must mean major public investment in social care - if it is serious about this, the government needs to put its money where its mouth is.’

Izzi Seccombe, chairman of the Local Government Association’s Community Wellbeing Board, was disappointed by the lack of a similar boost to social care funding. ‘By prioritising funding towards those who have hit a health crisis, rather than preventing it, taxpayers’ money is not being utilised in the most efficient way,’ she said. ‘Reforms promised in the forthcoming green paper need to address immediate sector pressures and the funding gap facing adult social care which is set to exceed £2bn by 2020, reductions in councils’ public health budgets, and set out proposals for the long-term reforms needed to put the sector on a sustainable basis.’

Nuffield Trust chief executive Nigel Edwards described the multi-year settlement as a big step forward. ‘But this increase is not quite all it seems … it leaves out spending on things like training staff, building hospitals and public health,‘ he said. ‘Leaving out these crucial areas will make it much harder for the NHS to realise its plans to tackle the growing crisis facing the NHS workforce and to shift towards a focus on preventing ill health. What’s more, this settlement is significantly lower than the 4% we, and many others, said was needed as a minimum.’

King’s Fund chief executive Chris Ham said it would be difficult to reduce financial deficits among NHS providers, get back on track in delivering national waiting time standards and bring about further improvements in services like cancer care, mental health and general practice. ‘It is essential that some of the extra funding is ring-fenced to support new ways of providing integrated care to improve patient experience and take pressure off hospitals. We welcome the commitment to publish a long term plan for the NHS later this year. This must also go hand-in-hand with a comprehensive strategy to tackle the crisis facing the health and care workforce.'