Efficiency ask must reflect extreme pressures

The provider representative body this week wrote to members of the government, including prime minister Boris Johnson and health secretary Sajid Javid, and NHS England and NHS Improvement. The letter claimed that the overall level of pressure in the NHS was now similar to that in January this year, although it was different in shape.

While the service was at full speed in recovering care backlogs across hospital, mental health and community services, it was also experiencing very high levels of demand for urgent and emergency care. There are also growing numbers of Covid-19 admissions alongside a rapid growth in mental health and long Covid presentations. Infection control measures have led to reduced capacity and there are extreme staffing pressures, both due to self-isolation rules and staff taking extra leave built up during last year.

The letter, signed by chief executive Chris Hopson (pictured) and deputy Saffron Cordery, added that these pressures are set to increase, given the likely impact of the relaxation of social distancing restrictions in July, the continuing vaccination programme and winter pressures. ‘Given this context, it is vital that the government makes the right decisions on NHS priorities and funding for the second half of the financial year (H2),’ the representative body leaders said.

While NHS trusts recognise the need to return to ‘fixed annual budgets, agreed in advance, with stretching efficiency savings’, the transition must be managed carefully and realistically.  ‘Trusts will be working at full stretch to cope with the pressures in H2 and this will inevitably restrict their ability to make efficiency savings,’ the letter said. ‘The efficiency ask reflected in the H2 revenue allocations needs to be set accordingly.’

NHS Providers has also called for recognition that Covid costs will not reduce in linear proportion to reductions in community infection rates and admissions. ‘Living with Covid-19 long term and dealing with even low levels of Covid-19 hospital admissions will still mean considerable extra costs for trusts,’ it said. And it warned that if assumptions were too aggressive, the pace of recovery would inevitably reduce.

Among seven ‘clear requests’, trust leaders also want discharge-to-assess funding to be rolled over to support the recovery agenda and for the elective recovery fund to be replenished. A rapid emergency capital round would help providers prepare for winter and speed up backlog recovery and financial arrangements should be put in place to enable the NHS to make maximum use of independent sector capacity.

Trust leaders also want confirmation that the 3% Agenda for Change pay rise will be fully funded. And, given the complex challenges facing the service, the providers’ organisation is calling for an early announcement of the NHS budget for the second half of the year. ‘It is essential that we avoid a repeat of the H1 negotiations, which saw the NHS budget confirmed just 13 days before the start of the new financial year,’ the letter said. ‘Given what happened with H1, trust leaders would like you to make a joint public commitment to a date by which they will be informed of their H2 allocations.’

Writing in a blog, Mr Hopson said that the NHS had delivered in an extraordinary way over the last 18 months. ‘Many NHS chief executives believe the next phase of our fight against Covid-19 is likely to be the hardest yet given the scale and breadth of pressures they face,’ he said. ‘They are clear that, now more than ever, the NHS must get the funding it needs to win that fight.’

NHS England and NHS Improvement have officially confirmed that the payment arrangements for the second half of 2021/22 (H2). will ‘continue to be largely the same as those for the first part of the year’. The H1 arrangements involved systems issued with funding envelopes, comprising adjusted clinical commissioning group allocations, system top-ups and Covid-19 fixed allocations. Funding flows to providers were based on block payments including a general efficiency requirement of 0.28%. The H1 guidance promised a ‘continued efficiency requirement into the second half of 2021/22’.

The confirmation was included in a national tariff update, which also highlighted plans to publish the 2021/22 national tariff in the coming weeks. The tariff prices can be used for activity-based payments to independent sector providers and are ‘likely to form the basis of the proposals for the 2022/21 tariff’. The national bodies have already unveiled plans to move to an aligned payment and incentive mechanism when the current temporary payment mechanism comes to an end.