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Editorials

Government and national bodies take charge of decision making as NHS crisis grows

BMJ 2016; 352 doi: https://doi.org/10.1136/bmj.i658 (Published 03 February 2016) Cite this as: BMJ 2016;352:i658
  1. Chris Ham, chief executive
  1. King’s Fund, London, UK
  1. C.Ham{at}kingsfund.org.uk

Central controls will not be sufficient to restore financial stability and sustain performance

The financial crisis engulfing the NHS in England is leading to fundamental changes in how services are managed and where decisions are taken. These changes follow from planning guidance issued in December1 and letters on the use of additional funding issued in January. The language being used by national bodies emphasises control and compliance as concerns grow about deteriorating performance.

The last vestiges of the former health secretary Andrew Lansley’s ambitions to liberate the NHS by devolving responsibility for decision making have in effect been removed as NHS England and NHS Improvement increase their grip on commissioners and providers. The autonomy of foundation trusts has all but been eradicated, with all NHS providers required to achieve centrally set financial targets and no longer free to decide how to use their cash reserves, where these exist. For their part, commissioners have been required to produce plans showing how they will implement national priorities and have a long list of “must dos” to deliver.

Another fundamental change is the requirement for NHS organisations to submit five year sustainability and transformation plans by July. These plans will cover all the services provided to people living in defined areas of England and will require providers of these services to work together and with commissioners to agree on their aims and how they will be delivered. Collaboration rather than competition is now seen as the best way of enabling the NHS to sustain and transform care in a further reversal of Lansley’s ambitions.

The actions taken by national bodies reflect growing anxiety in the Department of Health and especially the Treasury about the loss of financial control in the NHS. One consequence is that the Treasury will sign off financial support plans for NHS providers in deficit along with the Department of Health, NHS England, and NHS Improvement. Additional funding will be used mainly to eliminate deficits in acute trusts, which will be required to deliver key targets for patient care in return for funds to keep them solvent.2 Conditionality—interpreted as funding tied to improvements in performance—has now entered the lexicon of NHS leaders.

These changes are occurring at a time when NHS providers face the prospect of a combined deficit of around £2bn (€2.6bn; $2.9bn) in 2015-16, just over halfway through a decade of austerity in which funding increases have been tightly constrained. Providers are also failing to deliver key targets—for example, on waiting times for treatment—and they are under continuing pressure from the Care Quality Commission (CQC) to meet its standards for care. A major dilemma will be how to achieve financial balance when so much NHS spending goes on paying the workforce and the agencies who supply temporary staff.

This dilemma has been recognised in a recent letter from the CQC and NHS Improvement which states that there should be no conflict between improving the quality of care and restoring financial control.3 Leaders of NHS providers, who are under enormous pressure to use every means available to cut costs and to improve their balance sheets in the last quarter of 2015-16, will feel that financial control is now paramount. The contrast with the period before the 2015 general election, when the coalition government in effect turned a blind eye to overspending that resulted from decisions to hire more staff, could hardly be greater.

Seasoned observers will recognise recent developments as the latest manifestation of a recurring cycle of decentralisation followed by recentralisation dating back to the origins of the NHS.4 They will also recognise the shift from competition to collaboration as part of a familiar pattern of changing beliefs about the best way of improving care. Many will hope that substantial savings can be realised by reduced reliance on tendering as planning replaces markets as the policy instrument of choice. Few will believe that plans to devolve responsibility for decision making in Greater Manchester and other areas will deflect national leaders in the drive to strengthen their grip on performance.

The approach being taken by government and national bodies has several risks. These include the use of additional funds mainly to reduce deficits in acute trusts rather than investing them in primary care and mental health services, and the likelihood that the number of staff working in the NHS will fall in order to cut costs. If there is a “headcount reduction,” as outlined in a recent letter from NHS Improvement to providers, then performance on waiting times and other aspects of care could decline even further, as well as putting quality at risk.5

Equally worrying is the prospect that a focus on reducing costs will fail to engage and motivate clinical staff. This matters because many of the opportunities to release resources depend on changes in clinical practice that cannot be mandated by national bodies or government.6 High performing healthcare systems that deliver better outcomes at lower cost7 do so by building cultures of commitment to improvement among clinical staff rather than relying on control and compliance. A summit of NHS leaders on 11 February offers an opportunity to reframe the response to the crisis in this way and to be honest about the limits of central controls.

Underlying all of these issues is the adequacy of the additional funding for the NHS announced in November’s spending review. Despite the NHS continuing to be protected relative to most other public services, austerity is set to continue for the rest of this parliament. Even if the actions being taken by government and national bodies have the desired effect on finances and performance, and this is by no means certain, pressures are bound to return in 2018-19 when planned real terms growth is only 0.2%. At best, therefore, current measures will only postpone a more fundamental assessment of the resources needed to sustain the NHS in the face of rising demands.

Footnotes

  • Competing interests: I have read and understood BMJ policy on declaration of interests and have no relevant interests to declare.

  • Provenance and peer review: Commissioned; not externally peer reviewed.

References

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