The challenge currently facing the provider sector is substantial. In NHS Providers' new report NHS reality check: the financial and performance ask for trusts based on a survey of over 100 trusts, we take stock of the operational and financial pressures trusts are contending with as they recover care backlogs across all services. We explored the ask of trusts in 2022/23, whether it is realistic, and what trusts and systems need to ensure we recover performance as quickly as possible.
Before setting out the findings, it's important we consider the picture before the pandemic and pre-existing long term fault lines. There was already a growing mismatch in capacity and demand. A lack of long-term workforce planning had exacerbated significant staff shortages. The NHS had also just endured the longest and deepest funding squeeze in its history, and England's social care system was (and continues to be) woefully underfunded.
There is however a need for a reality check about what the additional funding, including the recent rise in national insurance contributions, can achieve in the short-term.
Interim Chief Executive
When the pandemic began, the government provided unprecedented levels of financial support for the provider sector. The payment system was also simplified: all providers moved onto block contracts to guarantee a minimum level of income. This was a 'needs-must' approach but wasn't sustainable or appropriate for longer than was absolutely necessary. The funding settlement announced in last year's spending review was welcomed by health leaders. This settlement, measured against other public services, represented a relatively generous investment in social infrastructure. There is however a need for a reality check about what the additional funding, including the recent rise in national insurance contributions, can achieve in the short-term.
Now that trusts have begun the process of delivering the ambitions that were set for them in this year's planning guidance, where do we stand?
It is testament to the hard work of trusts and their frontline staff that activity levels across services are improving, and in some specialities are exceeding pre-pandemic levels, particularly across mental health, diagnostics and cancer services. This is impressive given the complex and challenging operational context. Similarly across elective care, the majority of trusts are on track to treat all patients waiting over 104 weeks by July 2022 and are turning their attention to eliminating waits of over 78 weeks. However, it will be difficult for many trusts to deliver 104% of pre-pandemic elective activity by the end of 2022/23. Indeed, our survey highlights a range of long-standing barriers preventing trusts across all sectors from delivering significant activity gains across elective and non-elective services.
In the context of these complex operational pressures, trusts are working to meet patient need within the current funding envelope and deliver stretching efficiency savings.
Interim Chief Executive
Severe workforce shortages are being exacerbated by high sickness and absence rates. Trusts are seeing an increase in the acuity and complexity of patients across mental health and community health services which is impacting their ability to speed up recovery. The inability of trusts to discharge medically fit patients in a safe and timely way is constraining their capacity to deliver activity gains, and there are currently unprecedented blockages across the urgent and emergency care pathway. In the context of these complex operational pressures, trusts are working to meet patient need within the current funding envelope and deliver stretching efficiency savings.
Provider leaders are concerned about the degree of the reduction in COVID-19 funding in 2022/23. While it is early in the financial year, trusts are anticipating additional cost pressures generated by potential rises in COVID-19 activity and the associated disruption to services in winter. There is also concern that funding for growth in elective activity has come at the expense of addressing the backlog across mental health and community services.
Given the current economic climate, trusts welcomed the recent announcement by NHS England and NHS Improvement that an additional £1.5bn will be made available in 2022/23 to alleviate inflationary cost pressures. This will go some way to making the financial ask of 2022/23 more feasible. However, this is not new money from the government, and means more pressure will be put on the wider health and care budget in England. We also do not know at this stage in the financial year whether the funding injection will be enough to fully account for these inflationary pressures, and what trade-offs trusts may have to make in-year to ensure they live within funding envelopes.
It is vital that unrealistic demands are not placed on an already pressured and over stretched workforce, and that staff wellbeing is prioritised.
Interim Chief Executive
Trusts are doing all they can to deliver efficiency savings. However, given the operational and financial pressures facing trusts, it is unclear to what extent they can cut costs at the level expected by government via cost improvement programmes. There is a risk that high efficiency savings targets might force trusts to deliver undesirable, non-recurrent cost savings which are not sustainable nor conducive to overall recovery. This could impact on the quality care for patients, and access to services.
It is vital that unrealistic demands are not placed on an already pressured and over stretched workforce, and that staff wellbeing is prioritised. Trust leaders strongly support a meaningful pay rise for staff who have worked flat out during the pandemic. And, if the upcoming pay review body's recommendations exceed trusts' budgeted allocations for 2022/23, they will want reassurances the additional costs will be funded centrally.
Greater support for social and domiciliary care is now urgently needed to help improve patient flow across systems and alleviate pressures on the urgent and emergency care pathway. This means significant investment in the social care infrastructure and its workforce.
Trusts are doing all they can to recover performance and meet patient need. However, there must be a shared understanding across government that the task of balancing the operational demands and financial ask of trusts and systems remains challenging.
This blog was first published by HSJ.
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