NHS eyes foundations of recovery

by Seamus Ward

04 January 2021

The NHS in England must lay the foundations for recovery early in 2021/22, though the full financial settlement will not be known until close to the beginning of the new financial year, according to NHS England and NHS Improvement.

In a letter sent to service on 23 December, before the recent rise in cases, NHS chief financial officer Julian Kelly (pictured) and Amanda Pritchard (pictured, inset), chief executive of NHS Improvement and NHS chief operating officer, set out the position on recovery and the underlying financial framework for 2021/22.Julian Kelly l

‘We won’t know the full financial settlement for the NHS until much closer to the beginning of the new financial year, reflecting, in particular, uncertainty over direct Covid-19 costs. We will, however, need to start work early in the new year to lay the foundation for recovery,’ they wrote.

Underlying financial envelopes will be published shortly, with fuller planning guidance set out once further funding to reflect ongoing Covid costs has been settled. Further details of non-recurrent funding for elective and mental health services, announced in the spending review, will also be provided in the guidance.

Ms Pritchard and Mr Kelly added that the government will consider the additional funding needed to address Covid-19 cost pressures once more is known about the progress of the pandemic and the impact of the vaccination programme.

In the meantime, systems should continue to focus on six areas – recovering non-Covid services; strengthening delivery of local people plans; addressing health inequalities highlighted by Covid; accelerating the planned expansion of mental health services through delivery of the mental health investment standard and investing additional spending review funding for mental healthcare; prioritising primary and community care investment; and building on effective partnership working at place and system levels.

To maximise the recovery of non-Covid services, NHS England and NHS Improvement want all systems to ‘aim for top-quartile performance in productivity of high-volume clinical pathways’ where systems believe there is greatest opportunity for improvement. These include ophthalmology, cardiac services and MSK/orthopaedics.

The planning guidance will set out how the additional £1bn earmarked for elective recovery in 2021/22 will be targeted. System-based recovery plans will be developed, focusing on tackling treatment backlogs and long waits, and delivering productivity and outpatient transformation goals. Preparatory work on these areas should begin now, the letter said, with every trust and system appointing a board-level executive lead for elective recovery.

The underlying financial framework would include revenue allocated at system level. System revenue envelopes will be consistent with the long-term plan settlement, and based on the clinical commissioning group allocations and financial recovery fund payments that would have been allocated in 2021/22. Additional funding will offset some of the efficiency and financial improvements that systems were unable to make in 2020/21.

The letter added that systems must calculate baseline contract values that will align with the revenue envelopes. This will give a clear view of baseline financial flows. Planning guidance will suggest these are based on 2919/20 outturn contract values, which have been adjusted for non-recurrent items, 2020/21 funding growth and service changes, rather than nationally set 2020/21 block contracts.Amanda Pritchard 2 (200x200)

The letter called on systems to begin developing plans on how Covid costs can be reduced and eradicated once the pandemic is ending. It added that system capital envelopes will also be allocated based on a similar national quantum and using a similar distributional methodology to that introduced for 2020/21 capital planning.

For this winter, the letter encouraged trusts to increase available capacity by ensuring patients are discharged promptly; their staff flu vaccination programme is completed; minimise crowding in A&E; and maximise community pathways of care for ambulance services referral.

The national arrangement with the independent sector has been extended until the end of the financial year, guaranteeing access to 14 of the major independent providers. Further capacity can be accessed, though the letter insists the NHS must return to local commissioning from the beginning of April.