Funding commitment welcome but the devil will be in the detail

Chris Hopson profile picture

10 April 2018

Chris Hopson
Chief Executive


The prime minister’s commitment to higher NHS funding is very welcome. But, as ever, the devil will be in the detail as there are some obvious, difficult, tensions to reconcile.

All of us in the NHS are clear that any long term settlement has to cover social care as well as the health service. They are two sides of the same coin and the knock on impact of the collapse of taxpayer funded adult social care is plain for all to see. Up to half the beds in some hospitals are now occupied by older people who are medically fit but face delays in getting into residential care or back home.

All of us in the NHS are clear that any long term settlement has to cover social care as well as the health service.

Chris Hopson    Chief Executive

There is also likely to be an uncomfortably large gap between the extra funding the NHS needs and what the government will think can be afforded. The last time there was a step change in NHS funding, in the early 2000’s, the NHS benefitted from lower defence and police spending, a surging economy and rising taxes. 2018 looks very different – myriad pressures to increase public spending; a lower, more fragile, tax base; and a range of potential economic risks on the horizon.

The independent Office of Budget Responsibility (OBR) spells out the size of the NHS funding need – immediate, real terms, annual increases of around 4.5%, just to keep up with increasing NHS demand and costs. That compares to an annual NHS funding growth rate of 1.2% since 2010.

 

Proper national debate

There will be inevitable pressures on a Brexit preoccupied government with a small majority, and a strong commitment to low taxes, to quickly allocate the minimum amount of extra funding needed to neutralise the NHS as an electoral achilles heel. But we need a proper national debate on how much to devote to health and care to meet rapidly growing demographic pressures and how we raise the increased taxation required.

We need a proper national debate on how much to devote to health and care to meet rapidly growing demographic pressures and how we raise the increased taxation required.

Chris Hopson    

The government, and the taxpayer, will also want significant, tangible, performance improvements for any extra funding. But the longest and deepest funding squeeze in NHS history has created a hole that needs to be filled and we have yet to fully acknowledge. There’s a £5 billion backlog maintenance bill to repair crumbling buildings and update crucial equipment. £3 to 4 billion to recover key A&E and surgery waiting time targets we’re currently missing. An underlying NHS trust sector financial deficit of around £4 billion and a £1 billion annual NHS pay rise cost that needs funding.

 

Realism is needed

The mantra is that extra funding must always be accompanied by reform. This winter showed, once again, just how difficult it is for the NHS frontline to provide quality care in the face of spiralling demand, insufficient capacity and large, persistent, workforce shortages. The last two hospitals I’ve visited had a 20% nurse and a 27% doctor vacancy rate respectively. So, realism is needed on exactly how much extra reform the frontline can absorb until operational performance is stabilised and workforce shortages addressed.

Realism is needed on exactly how much extra reform the frontline can absorb until operational performance is stabilised and workforce shortages addressed.

Chris Hopson    

The prime minister and the chancellor have both publicly criticised the NHS’s failure to deliver the last NHS plan – the NHS Five Year Forward View. Frontline NHS leaders always believed that the Forward View offered the right vision but was too optimistic about how rapidly the NHS financial gap could be closed and the proposed transformation delivered. The tensions described above are tailor made to repeat the same mistake – an NHS overcommitting to what can be delivered in return for extra funding and then getting locked into a cycle of perpetual failure, however hard the frontline works. That, above all, must be avoided.

 

This article was first published by The Times Red Box on 10 April 2018. 

 

 

 

About the author

Chris Hopson profile picture

Chris Hopson
Chief Executive
@ChrisCEOHopson

Chris Hopson is the chief executive of NHS Providers. He joined in September 2012 after a career in politics, commercial television and the civil service. Read more

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