NHS Providers: spending review must revisit NHS funding

by Steve Brown

06 October 2020

The NHS must be backed with extra financial support this year, if needed, and a revised long-term settlement that recognises current pressures, according to NHS Providers.

The representative body’s chief executive Chris Hopson (pictured) told the NHS Providers’ annual conference, held virtually for the first time, that the government had to stop pretending ‘the NHS can cope with all these pressures on its current budget’. ‘It can’t,’ he said.Chris Hopson

Mr Hopson reflected on the last nine months and the impact of the Covid-19 pandemic and considered the immediate and future challenges facing the service.

He paid tribute to frontline and support staff in meeting Covid demand and rapidly ramping up the service’s emergency response. The nation owed them a ‘debt of gratitude’ and the best way to repay that debt was to create a sustainable NHS workforce model. ‘Asking those staff to do the right job, on the right terms and conditions, in the right working environment,’ he said. ‘No longer asking them to go the extra mile and a half every single shift, every single working day.’

He called on the government to ‘fund and support the NHS to fill our current workforce gaps’.

Mr Hopson repeated his message that the NHS had never provided a Covid-only service and was now going ‘full pelt’ to recover service volumes – a statement he said would be backed up when performance data for September is published. However, he said this winter’s task was ‘significant’, particularly if there is a full second Covid surge alongside normal winter pressures.

As part of six of things that trusts required, he called for ‘flexibility and extra support, if needed, on finances’. ‘NHS England and Improvement know there are significant gaps in second half finances in some trusts, particularly for those with large amounts of non-NHS income,’ he said. ‘And we need government to cover all the extra costs resulting from any unexpectedly large second Covid surges.

Funding also needed to be reviewed for the long term. The NHS entered Covid-19 having faced its longest ever financial squeeze. ‘If funding between 2010 and 2018 had grown in line with the long-term average since 1948, the NHS would have had an extra £25bn to spend in 2018,’ he said. ‘Think what a difference that could have made.’

The five-year settlement for the core NHS England budget announced in 2018 – which averaged 3.4% real-terms annual growth – was generous compared to funding for the wider public sector. But it was still 0.3% below the long-term growth, ‘barely kept up with demand’ and ‘certainly didn’t pay for the transformation that was needed’. It also failed to set budgets for capital, education and training, and public health.

In its election manifesto, the government further committed to recruit 50,000 new nurses and build 40 hospitals.

Now Covid had increased costs. Care backlogs need to be recovered. There is rapidly growing mental health demand. Personal protective equipment and NHS Test and Trace are also significant costs. And cost improvement programme savings had also been lost, which were a fundamental part of making the books balance.

‘It is impossible to see how the NHS can deliver the long-term plan, meet the manifesto commitments and cover the costs of Covid-19 on the current NHS funding settlement,’ Mr Hopson said. ‘All three elements of NHS funding – the capital budget; the non-ringfenced wider departmental budget that includes NHS education and training spending; and the core NHS England revenue budget – all need revisiting.’

The call for a new settlement as part of this year’s comprehensive spending review echoed earlier calls from the HFMA and the NHS Confederation.

On top of this was the ‘most pressing problem of all’ – reform of the social care system. ‘Before Covid-19 arrived, the NHS was in danger of heading for the slippery slope of unsustainability down which social care has tumbled with ever increasing speed,’ said Mr Hopson. Demand outstripping capacity, staff asked to do more and more, finance failing to keep up with demand.

Covid-19 had increased these pressures. ‘Having driven social care into crisis by failing to fund it properly and sustainably, we must avoid driving the NHS into a similar fate,’ he said. ‘And we must rescue social care from its current state of crisis.’

His final message to the conference was about speeding up the move to system working. He warned against ‘turning systems into an all powerful quasi strategic health authority tier’ and argued that the unitary trust board was ‘the right governance mechanism, at the right level, on the right footprint and population size, to oversee the delivery of complex, high-risk, frontline care’.

And he said any new structure should ensure maximum efficiency. ‘[This means] avoiding going from a structure with two layers – Monitor and the Trust Development Authority and trusts – to one with four – NHS England and Improvement; NHS England and Improvement regions; systems in the form of sustainability and transformation partnerships and integrated care systems; and local trusts. Do we really need four finance and workforce teams where previously there were two?’ he asked.