Adequate funding to deliver NHS constitutional standards

NHS trust leaders are strongly committed to providing the best possible care for patients, meeting their NHS constitutional performance standards, reducing unwarranted variation and achieving financial balance, including an appropriate degree of performance, efficiency and financial stretch.

While delivery of the constitutional performance standards imposes a significant delivery challenge, there is widespread recognition among trust leaders that, taken as a set of standards, they provide a clear, easily understood, proxy for the access to treatment and quality of care the NHS should provide. There may be some need to update some standards to reflect the development of new clinical pathways. However NHS trust leaders have a strong and clear preference for their trusts to be funded at a level that enables them to both deliver the standards and achieve financial balance.

As this analysis clearly shows, the NHS has now reached a point where this is impossible without realism, flexibility and support. The vast majority of trusts did not achieve that task in 2016/17, despite a 4% NHS funding increase, and we have shown that the required performance improvement will be impossible on a 2017/18 2.6% NHS funding increase.

As the 2017/18 financial year begins, NHS Providers believes that the NHS now has to make some rapid, difficult, choices.

NHS Providers believes that the NHS now has to make some rapid, difficult, choices


Two approaches in the absence of the funding needed

There are two broad approaches.

The first is to act as though delivery of all the requirements set out in the 2017/19 planning guidance is still possible. The principal argument in favour of this is that it provides an appropriate degree of stretch for NHS trusts to aim for.

NHS Providers believes there are several risks to this approach:

  • It sets an impossible delivery task for NHS trusts: there is clear difference between appropriate stretch and “impossible to deliver”. This risks eroding the relationship between trust leaders and NHS system leaders and risks disincentivising trusts as they try to chase delivery requirements they can never deliver.
  • It risks misleading the public, who pay for the NHS, as to what is deliverable on the funding levels available. It also prevents mature debate that is now needed about how, as a nation, we will meet rapidly growing healthcare needs on an inevitably constrained amount of public expenditure.
  • It risks undermining public confidence in the way the NHS runs, as it may look as though NHS providers are incapable of meeting a delivery task that system leaders are publicly arguing they should be able to achieve.
  • It prevents the NHS from properly planning and allocating scarce resources where they could provide maximum benefit. If trusts seek to meet a range of different, impossible to deliver, targets they are likely to miss all of them. Delivering a smaller range of priorities is much more likely to maximise overall benefit for the money spent.
  • It risks placing an unsustainable burden on frontline staff, adversely affecting their morale and engendering a constant sense of failure as they work harder but fail to deliver requirements that NHS system leaders publicly argue are deliverable.

The second approach is for the NHS’s political and system leaders to openly recognise that delivery of the requirements set out in the 2017/19 planning requirements is now impossible and that a more flexible and realistic approach is needed. NHS Providers believes this approach should have three elements.

Realism and flexibility

NHS England and NHS Improvement have already started to recognise that the requirements set out in the 2017/19 planning guidance are undeliverable.  In a letter to trusts and CCGs in March 2017 on getting A&E performance back on track they set out a target to “achieve performance before or in September that is above 90% [against the 4 hour A&E standard], sustaining this and returning to 95% by March 2018.”

  • This approach now needs to be developed across the full range of 2017/18 delivery requirements. The NHS England mandate and the Five year forward view delivery plan, both due to be published in March 2017, should: explicitly focus on a smaller number of priorities with a realistic delivery trajectory for each priority.
  • assure trajectories against both funding and workforce levels that are demonstrably achievable by the average trust operating at an appropriate degree of stretch.
  • Involve trusts in this assurance so that there is appropriate ownership of the delivery task.
  • There should be an explicit statement of what will be deprioritised. We recognise the risk to performance that is likely to follow from deprioritising a particular requirement. This can, to some extent, be mitigated by continuing to robustly manage performance, albeit to realistic performance levels set below the current standards.

NHS Providers is reluctant to anticipate the results of this reprioritisation as the best result will emerge through the right quality of rigorous dialogue between national and local NHS leaders.

However we observe that:

  • the greatest patient safety risk appears to be in those local systems unable to cope with winter pressures and this winter’s performance suggests failure to address these now constitutes an unacceptable risk
  • realistic performance trajectories for the 4-hour A&E and 18-week elective surgery standards, are likely, at best, to involve a gradual return to the required performance levels over an extended period
  • while it is tempting to treat performance against the 92% 18-week elective strategy as a “balancing item”, many district general hospitals, including those under significant A&E pressure, have relatively small amounts of elective surgery, so deprioritising the 18-week standard may have less effect than presumed
  • mental health has long suffered a structural disadvantage in the NHS and investment in mental health pays for itself, and more, through less physical ill health and enabling people to return to work
  • given that funding increases and an ambitious efficiency target do not cover the forecast cost and demand increases, a stretching financial performance target for the provider sector would be to reproduce the £800-900 million deficit likely to be recorded in the current financial year.
  • Any targets set must be realistic and achievable, particularly if they are linked to access to funding. Trusts were set A&E performance targets they had to hit in each quarter of 2016/17 to access a £1.8bn sustainability and transformation fund, designed to assist in the elimination of the provider sector deficit. In January 2017 only three trusts hit their target. Yet, in 2017/18, acute hospital trust access to 30% of the sustainability and transformation fund will be dependent on hitting A&E targets. If those targets are unrealistic, then it will be even more difficult for trusts to achieve financial balance.

Reallocation of resource

The NHS needs to treat 2017/18 as a year when patient safety will be put at unacceptable risk unless the service mobilises all the resources available to it. The NHS spends an estimated at least £5.65 billion on non-frontline care in the form of:

  • spend on the Department of Health
  • spend on the arms length bodies like NHS England, NHS Improvement, the Care Quality Commission, Public Health England, and Health Education England
  • spend on the administration of CCGs.

NHS Providers believes the NHS should conduct an immediate review of this spend to see how much can be reallocated to frontline care, building on earlier reviews that have reduced spending in this area. The review should be completed by the end of quarter 1 2017/18 and it should target a specific amount of money to reallocate to front line care.

A concerted approach to supporting trusts to improve performance

If the NHS is to close the gap between funding and desired performance levels, NHS trusts need to be supported to deliver as much performance improvement as possible as quickly as possible.

Several major pieces of work – for example the Carter Review, the Get it right first time programme and the CQC trust inspection regime – have shown that there is significant unwarranted variation in performance between trusts across a range of different areas including clinical outcomes, use of staff and procurement of supplies. Reduction of these variations represents a significant opportunity for the provider sector. However, securing this opportunity requires a different approach to delivery.

Trusts report that they consistently lack the capacity and capability to deliver improvement given the complexity and difficulty of delivering the required changes, reliant as they often are on changing  long held clinical practice. Trusts report that they lack capacity as leadership and management focus is almost entirely used up keeping an increasingly unstable system upright. They report that they lack capability as previous rounds of cost improvement programmes have stripped out the analytical, change and project management resource required to support changes to clinical and other practices.

If the NHS is to close the gap between funding and desired performance levels, NHS trusts need to be supported to deliver as much improvement as possible as quickly as possible


The approach of NHS system leaders to support change is, too often, to provide data showing variation and then create central teams to monitor and measure elimination of that variation. This does nothing to invest in the capacity and capability to drive the required change at trust level, or to share best practice between trusts.

We therefore need NHS leaders, particularly NHS Improvement, to quickly review what support and investment is needed to drive the required change at trust level. This review should, again, be completed by quarter 1 2017/18 and involve frontline trusts.

Driving the required change at trust level will require NHS system leaders to significantly shift the balance of time, energy and resource they spend, away from measuring and controlling performance towards supporting improvement. This will provide a significant organisational challenge for those organisations. NHS Improvement has begun this journey, for example through its accident and emergency care support programme, but this needs to be speeded up.

As the beginning of the 2017/18 financial year approaches, it will be impossible for the NHS to gain the full year benefits of these three approaches, making delivery of 2017/18 even more unlikely. The sooner these exercises are completed the better, not least because the prospects for 2018/19 look even more difficult as NHS England’s real term funding increases are scheduled to drop even further from 1.3% in 2017/18 to 0.4% in 2018/19 and 0.7% in 2019/20.