Long-term plan: trust deficits targeted

The plan also said no clinical commissioning group should have a deficit by 2023/24 and targets a year-on-year reduction in the number of trusts and CCGs in deficit.

Though the FRF will impact on local systems as a whole, it will target trusts with financial difficulties that could have a knock-on effect on service continuity. Separately, an accelerated turnaround process will focus on the 30 trusts with the worst financial performance. These trusts account for the net total of the provider sector deficit.

The FRF is expected to have an immediate impact, with the number of trusts reporting a deficit in 2019/20 to be reduced by more than half.

Only trusts with deficit control totals that indicate a risk to financial sustainability and continuity of services will be able to access the FRF. They must also have agreed multi-year financial recovery plans with their NHS Improvement and NHS England regional team – and these plans must deliver additional efficiencies of at least 0.5% a year over and above the 1.1% required of all trusts.

FRF recovery plans will seek to make services sustainable at trust and system level, setting out responsibilities at integrated care system (ICS) and sustainability and transformation partnership (STP) level. Though plans must be tailored to local needs, it is expected trusts will implement initiatives such as the Model Hospital, Rightcare and Getting it right first time (GIRFT), as well as savings opportunities identified in the long-term plan, such as reducing face-to-face outpatient appointments.

No figure was given for the size of the FRF. However, the amount allocated to the fund is expected to fall over the next five years, with funding ‘replaced by recurrent efficiency improvements delivered through multi-year recovery plans’. The NHS long-term plan said, where possible, funds released through over-delivery against planned financial improvements will be redeployed locally.

The FRF will mean the end of the control total regime and the provider sustainability fund for trusts the deliver against their recovery plans by 2021 at the latest, the long-term plan added.

The return to financial balance is one of the five tests for the long-term plan that were set by the government. The second test is the delivery of at least 1.1% cash-releasing productivity growth per year. The plan said the NHS will focus on 10 priority areas over the next two years to increase efficiency. The priority areas include some programmes already in motion – such as pathology and imaging networks and centralised procurement. There are also plans to make further administrative savings and increase the efficiency of community, mental health and primary care. In the former, the plan targets commissioners and provider administrative efficiencies totalling more than £700m by 2023/24 (£290m from commissioners and more than £400m from providers). Contracting processes will be simplified, supported by changes to payment mechanisms, while all transactional services, such as invoice payments, will be automated over the next five years.

Health Foundation chief executive Jennifer Dixon (pictured) said productivity improvements would be essential to the delivery of the plan.

'The extra £20.5bn by 2023/24 promised by the government is a substantial investment. But without a step change in productivity, or in managing demand for care, trade-offs are inevitable. These need to be spelled out clearly so the public know what they can expect from the NHS.’