10 things providers want from the imminent 2018/19 planning guidance

Amber Jabbal profile picture

29 January 2018

Amber Jabbal
Head of Policy and Strategic Projects


The next big policy announcement on the horizon is the planning guidance for 2018/19. Already much later than usual, and with the next financial year starting to loom large, this document will be key to understanding what the NHS will be asked to deliver next year.

It is a document that will need to carefully balance the needs and requirements of the frontline and the arms length bodies along with the expectations from the Department of health and social care (the Department) and wider government. 

Here we set out 10 things trusts tell us they want and will be looking for in the planning guidance.

  1. The budget in 2017 gave the NHS more than was expected, but less than needed. This means that difficult judgements about priorities need to be made. The government will want to demonstrate that the additional funding is being used to recover NHS performance, but given the severe operational performance and workforce pressures facing the NHS, we need to be realistic about what is possible. At this stage, holding the current position on finances and performance should be at the top end of realistic expectations next year. This won’t be an easy pill for the government to swallow – the Department will no doubt have made their budget case to the Treasury on the basis that performance in the NHS could be improved with additional funding. Another year of missed constitutional standards will also raise more difficult discussions about what the long term status of the key targets should be. Regardless of this, it is essential that the ask of the sector is realistic and deliverable.

  2. Key to setting a deliverable ask for the sector are realistic assumptions about demand growth and efficiency savings. Too often in the past, providers have been set unrealistic assumptions about the level of efficiencies they are able to deliver and the level of demand they can absorb. The sector has been asked to deliver around 2-3% in efficiency and productivity improvements, but we know the NHS is currently only able to deliver around 1-2% annually, which is still above recent whole economy productivity improvement rates and above the NHS long run average. In terms of demand growth, although there are pockets of promising practice across the NHS, we need to be realistic about how much demand can be moderated next year. The planning guidance needs to set out clearly what level of activity growth is funded, and then linked to that what the performance trajectory should be.

  3. The national bodies are trying to finalise the planning guidance as the 2017/18 plan is starting to come off the tracks and we still don’t know what the year end will look like. Even before winter started, provider finances were starting to slip. The expectation that the sector would be able to recover A&E performance this year also seems a distant memory now. The planning guidance therefore needs to be set in the context of this year’s actual performance, rather than the performance we had hoped to see at this point. As we argued last year, we were always concerned that the sector was being set a delivery task that was Mission impossible, and this has turned out to be the case. So the guidance needs to set out what will happen if, as we expect, financial performance deteriorates in quarter 3/quarter 4. Failure to do so just leaves a gap.

  4. For 2018/19, we need to see continued and additional investment in mental health and community services, if we are to meet the Five year forward view ambition of moving care into the community and the mental health standards set out in the mandate. This will mean that the planning guidance has to strike a balance between focusing on the acute targets, where government will want to focus most and which are the most visible – A&E, treatment to referral and cancer – with the need for growth in community services and ensuring that the mental health investment standard is met, with funding actually reaching frontline services.

  5. The financial ask for the provider sector next year needs to be updated in light of the 2017 budget settlement. With an extra £1.6bn of revenue funding, crucial decisions are required about how it will be allocated, to whom, what conditions will be attached, how much will be needed to mop up underlying provider deficits, and what the implications are for control totals and sustainability and transformation funding (STF). Trusts tell us that the control totals originally set for 2018/19 are too ambitious and need revisiting. At the moment, trusts believe their control totals do not adequately reflect the underlying financial pressures which have continued to build this year. We might also need to review how much is available in the STF pot, recognising the continued financial pressures mean that £1.8bn is no longer enough. We do not believe the STF and control totals are sustainable ways of managing NHS provider finances in the long term, but for next year they will represent a crucial component in the planning guidance. We also need to resolve the capital allocation for next year, so that the sector has upfront clarity over how much capital will be available for transformation and day to day maintenance.

  6. Linked to this are the financial pressures which cannot be accounted for in the planning guidance, but which will be front of mind for the sector. For example, the cap on NHS staff pay is planned to be lifted for 2018/19, which will increase NHS’s costs substantially. According to the IFS a 2% pay award would cost the NHS around £1bn, which is why the government’s commitment to 'fully fund' the main pay uplift is so crucial. Although the pay review bodies are yet to report, the planning guidance should set out the assumptions trusts should be making for 2018/19 contracts, detail on how additional funding might reach the sector and the associated timings. Clarity will also be needed about whether funding will apply just to agenda for change contracts, rather than doctors and dentists, as the budget announcements implied. If the latter is not funded, appropriate adjustments would need to be made to control totals to reflect this.

  7. Last week the National Audit Office raised concerns that funding intended for transformation is being used to prop up day to day operations. The STF, for example, was supposed to switch from sustainability to transformation as we moved towards 2020, but we are further away than ever on this. Given where we are, this is the right prioritisation for next year but there is a danger that this is not matching to the national level narrative on transformation. We need to be honest with the public that we cannot currently invest in transformation to the scale required across the NHS, and as a result we need to adjust expectations placed on the service about how fast change will happen.

  8. With the shift to accountable care and more collaborative ways of working through STPs we are moving away from the traditional provider/commissioner split to more emphasis on local systems and local system wide financial management. However the majority of trusts still tell usthat provider/commissioner financial flows, contract terms and negotiations are a key determinant of trust financial health. Also, despite a move towards system control totals, in reality providers are still held to account by NHSI for the financial position of their own individual organisation and the performance against their organisation’s control total. The same applies to CCGs. So the relative financial balance and risk allocation between CCGs and trusts remains of fundamental importance. Trusts will be concerned, for example, if all of the extra £1.6bn is routed through CCGs with vague and unclear conditions and the potential for the money "to get lost along the way".

  9. There is an ongoing lack of clarity about what STPs are for, whether it is still the expectation that all 44 STP footprints will become accountable care systems and how the ALBs expect the system architecture to unfold. There is a need for the centre to acknowledge that the direction of travel remains unclear and that they recognise the governance and legal risks that are arising as move from a structure focussed on individual institutions to one focussed on local systems but can’t change the underlying legislation. It is also important to recognise that STPs are, for good reason, progressing at different rates across the country and the limited amount of transformation funding – whether that is capital or revenue – tends to be increasingly focused on the most advanced . This risks leaving those areas at an earlier stage in their journey or tackling more complex challenges being left further behind. The planning guidance needs to strike the appropriate balance here, enabling the most advanced to progress at pace but ensuring those who, for good reason, are struggling don’t get left behind.

  10. Trusts will inevitably be reading the guidance for signals on the emerging regulatory landscape and the future of provider autonomy. The planning guidance is also going to be the first signal, following the appointment of a new NHS Improvement leadership team, about how and at what speed NHS England and NHS Improvement will work closer together, what this will look like in practice and what it will mean for providers.

The planning guidance will be crucial in setting out a clear and realistic ask of the sector and therefore taking the time to ensure it is accurate and achievable is the right thing to do. However, while organisations will have already begun developing their own internal planning, it is important to recognise that this guidance is coming out very late in the day and the timelines associated with submissions should reflect this.


This article was first published by the HSJ on 29 January 2018.

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Amber Jabbal
Head of Policy and Strategic Projects

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