Spending review ‘must find NHS cash’

The government needs to provide additional funding for the NHS, over and above the £8 billion it promised during the general election campaign, or tell the public that waiting lists will get longer and the quality of care will deteriorate.

That is the stark message from the King’s Fund think-tank, in its submission to the Treasury on the short, medium and long-term funding needs of the NHS.

The King’s Fund, the Nuffield Trust, and the Health Foundation have all published formal submissions to the Treasury’s spending review this week, warning that the NHS has run out of “low hanging” savings and that it faces immediate financial pressures that are being made worse by cuts to social care.

All three think-tanks have warned this means there is little or no “headroom” to invest in the new models of models of care set out in the ‘Five Year Forward View’ published by NHS England last October, to help close a projected £30 billion gap between funding and demand by 2020-21.  

In response, the King’s Fund and the Health Foundation have renewed calls for a transformation fund to support innovation and the joint running of existing and new services.

New models of care will require investment in IT, to improve access to records, financial and planning data. This has been recognised by NHS England, which has just given clinical commissioning groups responsibility for drawing up digital roadmaps focusing on interoperability by April next year.

Although the think-tanks do not focus on the IT aspect, NHS England director of digital technology Beverley Bryant told the NHS Expo that the commissioning board was drawing up its own business cases for Treasury.

The results of the spending review are due to be announced on 25 November.

The King’s Fund submission says “the challenge for the spending review is to provide adequate resources to maintain high quality care and to enable change to happen” and that if the government is unwilling to do this it should “spell out the consequences for patients and users.”

The Fund says the £8 billion promised by the Conservatives during the general election campaign “is the absolute minimum required to maintain standards of care” and agrees with the Nuffield Trust that it will not pay for new promises, such as seven day working or ‘parity of esteem’ between physical and mental health services.

Instead, the two think-tanks argue that with the acute sector as much as £2 billion in deficit, the NHS faces a set of short-term cost pressures that mean the £8 billion needs to come on stream immediately, and not be delayed to the second half of this Parliament. 

These cost pressures include the diversion of cash to the Better Care Fund, the government’s living wage commitment, further cuts to council-funded social care, and continued growth in demand. 

With all this to contend with, the Nuffield Trust says the Department of Health needs to stop raiding the capital budget and public health budgets that could otherwise be used to support investment and cut long-term demand. 

And the King’s Fund argues that a transformation fund will be required to support change. It backs a Health Foundation report arguing that £1.5 billion to £2.1 billion a year will be required from 2016-17.

The Health Foundation says a “single body” should oversee this fund, that it should bring together all the transformation funds now running in the NHS, and that it should focus first on paying for new initiatives and then on rolling-out good ideas.

In the longer term, however, the King’s Fund argues that the government should bite the bullet and aim to raise spending on health and social care to around 11-12% of GDP; or the proportion of national output that is spent in France, Canada, and the Netherlands.

Similarly, the Nuffield Trust has urged all the main political parties to commit to a “fundamental review of health and social care funding”. This seems unlikely to happen, and at the moment the government is playing tough on both an immediate bailout and its election pledges.

During an appearance at the Commons’ health select committee this week, health secretary Jeremy Hunt admitted that financial pressure on the NHS was “the worst it’s ever been in its history” and that morale across the service was low.

But he also told MPs “we don’t have the resources for very generous double running costs”, that the Better Care Fund is here to stay, and that public health will have to “make its share” of efficiency savings.