CSR must deliver five-year deal, says HFMA

In its submission to the spending review, the association highlighted pressures in both sectors that pre-existed the pandemic. And Covid-19 has introduced additional costs.

‘The NHS was in a difficult financial situation before Covid-19 and local government has been badly hit by austerity, which has had a direct impact on social care and an indirect impact on the NHS,’ said Emma Knowles (pictured), director of policy and research at the HFMA. ‘Any settlement in the Covid-19 world needs to consider the fact that all health and social care services will have to be delivered differently for the foreseeable future.’

The NHS will need more staff and more space to meet social distancing requirements. And dealing with both new Covid patients, while restarting other services was ‘not possible within the current financial and workforce constraints’, she added.

Recognising that it was unlikely that both sectors’ funding requirements would be met fully, the association said it would be important to consider where investment would have the biggest impact.

A long-term settlement was key to support planning – transformation was not possible when the funding for the following year was not known, the association said. The five-year settlement for the NHS announced in June 2018 had been welcome, but it excluded social care budgets and wider health department funding streams. The HFMA said a five-year settlement was now needed for both health and social care and a longer settlement for capital – covering 10 years for example – would be ideal

Addressing the underfunding of social care was also an essential foundation for the move to true system working. But other parts of the public sector, such as housing and criminal justice, also impacted on the wider determinants of health. ‘Unless all parts of the system are adequately funded, there will be little benefit for the NHS as the overall health and wellbeing of the population will decline and demand will increase further,’ the association said.

Barriers presented by the different NHS and local government legislative and regulatory frameworks should also be removed. The recent proposal to reform the VAT refund rules, which have hindered collaboration in the past, was welcomed as a good step forward.

Staff will be vital to meeting the challenges in health and social care over the coming years. And the association stressed the importance of retaining existing staff and attracting new entrants. The national appreciation of staff was welcome and new ways of working collaboratively had been well received. However, staff needed to be ‘appropriately rewarded’ and the NHS needed to ensure it provided a ‘great place to work’.

The HFMA also reiterated calls to reform funding flows and improve the mechanisms for system-based funding. ‘The simplification of the NHS finance regime during the pandemic has shown how financial flows can support, or block, system working,’ the submission said. ‘The lessons learnt from temporary changes to governance and working arrangements must be incorporated into the future financial regime.’