There is a danger that, because there is no immediately obvious solution to replace control totals and STF, what was conceived as a short-term solution becomes a long term design feature of the system. While it may be appealing to the national level to have this degree of control over individual providers, we believe it is deeply corrosive and incompatible with the principles of appropriate delegation and autonomy that should sit at the heart of the NHS. These principles are essential for organisations and systems to be effective, engaged and empowered in a rapidly changing and complex system.
As this report identifies, there are also consequences of continuing with the current approach that could undermine the longer-term sustainability of the sector. Providers need a clear public commitment from government that the current financial framework will only be short term and that a new approach will support appropriate local autonomy by the beginning of 2019/20 at the latest. The government also needs to commit to full provider involvement in the development of the new approach.
We need to get back to a sustainable approach to managing the provider sector. The average well-run trust, should be able to deliver its operational targets and make a sufficient surplus to invest for the future. This should incorporate delivering an appropriately stretching but realistic level of savings based on improving efficiency and productivity. Failing to hit operational targets or make a surplus should be an exception, but at the moment, it is the rule. It is now exceptional for a trust to hit its operational targets and make a surplus, and this cannot continue.
The only way to address this is either to recognise that additional funding is required or to reduce the delivery ask. We cannot carry on expecting that the significant demand, funding and workforce pressures can be absorbed by the sector on current budgets.
Providers ultimately need greater realism and honesty about what can be delivered in the short-medium and long term. The current financial framework involving greater central control and grip served a necessary purpose following 2015/16, but we now need to think long term and strategically about the financial challenges facing the sector.