NHS funding: a good time to listen

Chris Hopson profile picture

20 November 2017

Chris Hopson
Chief Executive


The clamour of competing claims ahead of a Budget often creates a kind of white noise. It’s hard to be heard above the din. This year feels different. Health has cut through. That doesn’t mean the chancellor is ready to roll over and agree to whatever the NHS asks of him. But there is a new consensus behind the case for the NHS – a palpable recognition of the challenges the NHS faces, and the risks we run if we continue to ask more of the health service than it can deliver within the current budget constraints.

 

A tipping point

The tipping point came at the recent annual conference of hospital, mental health, community and ambulance service leaders hosted by NHS Providers. For the first time, national NHS leaders spelled out with absolute clarity what current spending plans mean for patients and service users. The head of NHS England, Simon Stevens, warned that, without extra funding, the NHS waiting list will grow to five million people. Much-needed programmes to improve cancer and mental health services will be put at risk. And there could be cuts to the numbers of nurses and other frontline staff.

There is a new consensus behind the case for the NHS – a palpable recognition of the challenges the NHS faces, and the risks we run if we continue to ask more of the health service than it can deliver within the current budget constraints.

Chris Hopson    chief executive

At the same time, three independent health think tanks came together to echo the Office of Budget Responsibility’s warning of a £20 billion NHS funding gap by the end of the parliament. The King’s Fund, The Nuffield Trust and The Health Foundation said at least £4 billion would have to be found next year to stop care deteriorating. These fears were reinforced in a budget briefing by NHS Providers which highlighted concerns over slipping performance, a £1 billion safety critical maintenance backlog, and the need to fully find the end of the long running NHS pay cap.

Speaking at the same conference, Jeremy Hunt told NHS trust leaders he got it. He acknowledged the NHS needed more money. But how much? And with what strings attached? The health secretary spoke of the need to improve productivity. This concern was echoed by the chancellor over the weekend when he suggested the NHS had not delivered on the “deal” enshrined in the Five Year Forward View, published in 2014. 

But he will be aware that the NHS has made extraordinary progress, improving productivity at more than four times the rate of the wider economy over the last few years. NHS trusts made more than £20 billion of cost improvement gains in the last parliament, and just last year realised another £3.1 billion, equivalent to more than 3.5% of annual turnover.

In a sign that the NHS case is getting through, Jeremy Hunt told parliament that the government had “listened carefully" to trusts saying they would not be able to make further efficiencies to fund the lifting of the pay cap. He acknowledged they were already under pressure to make “very ambitious efficiency savings”.

 

Welcome recognition

For NHS Providers, this is not a ‘we told you’ moment, but a welcome recognition of what has been patently clear to frontline trust leaders for the last three years. Performance has been slipping, funding falling back, and brilliant staff who have held things together through all the tough times have been turning their backs on the NHS. It’s vital that the chancellor heeds these warnings and delivers a sustainable funding settlement for the NHS in the Budget.

For NHS Providers, this is not a ‘we told you’ moment, but a welcome recognition of what has been patently clear to frontline trust leaders for the last three years.

Chris Hopson    chief executive

But there’s a further, more positive argument for health spending which we think has been under-played.

 

A win-win investment

As demand for treatment grows, reflecting an ageing population, some have portrayed the health service as a bottomless pit, draining money away from other, more productive, priorities. Now more than ever, it is time to realise that, far from acting as a drag on our national finances, the NHS is a powerful economic asset which rewards investment.

We should see the value it creates. The NHS is the biggest employer in the country, providing more than a million good quality, full time, high-skill jobs. No other employer offers such a large number or wide range of jobs with clear progression opportunities and the chance to learn more and build skills. It’s significant, too, that these jobs are spread evenly across the country, including in areas of significant economic deprivation. 

Now more than ever, it is time to realise that, far from acting as a drag on our national finances, the NHS is a powerful economic asset which rewards investment.

Chris Hopson    chief executive

And investment in the NHS is investment in the life sciences industry, a crucial strategic sector which contributes £14.5 billion a year to the UK economy, with an additional £16 billion through the supply chain and employee spending. This sector provides 140,000 jobs directly, each worker adding more than £100,000 to the UK economy. It’s also one of the key areas where the UK has an opportunity to build a globally competitive position.

There is an opportunity ahead of the NHS’ 70th anniversary next year to recognise and respond to the gravity of the challenges faced by the NHS – never more so than now, as we head into winter. But also to harness the NHS’s power to generate growth, jobs and prosperity. There’s a win-win if ever I saw one.

 

Read our budget submission.

 

 

 

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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