Trusts and CCGs face crack-down in ‘reset’ on NHS finances

Five trusts have been put into a new ‘intervention’ special measures regime and a further 13 could follow, NHS England and NHS Improvement have announced.

The move is part of the financial reset announced at the NHS Confederation’s annual conference last month, and timed to coincide with the publication of the Department of Health’s annual report and accounts today.

It also coincides with the publication of the first ‘Ofsted-style ratings’ for clinical commissioning groups, 26 of which have been rated ‘inadequate’ and nine of which have been put into special measures.

In a sign that the commissioning board and the NHS’ main regulator are losing confidence in the ability of local commissioners and providers to resolve their performance and financial issues, the reset document – 'Strengthening Financial Performance and Accountability in 2016-17' – says NHS Improvement will visit trusts in special measures and agree a recovery plan within a month.

It suggests that trusts in this position may be stripped of key powers over spending and may see their managements replaced. CCGs in special measures could be disbanded or reconstituted as an ‘accountable care organisation’.

And all NHS bodies have been set ‘control targets’ that outline the ‘minimum level of performance’ that their boards are expected to deliver, and are being reminded of their legal duty to live within their means.

NHS England chief executive Simon Stevens said: “Most trusts and CCGs know what needs to be done to release funds for local reinvestment in better patient care and now is clearly the time to fire the starting gun.

"These individual accountabilities will be supplemented by the sustainability and transformation plans now being developed in communities across England, which will set out the wider, shared action they will take together to unleash broader improvement on health, care, and financial sustainability to 2020.”

The NHS has been facing a worsening financial situation for the best part of a decade. In 2008, the former chief executive of the NHS, Sir David Nicholson, warned that it was facing a likely gap between funding and demand of £20 billion by 2014-15.

This triggered the ‘Nicholson Challenge’ to find savings via quality, innovation, productivity and prevention initiatives. But when Stevens arrived at NHS England in 2014, the projected gap had grown out to £30 billion by 2020-21.

At the end of 2014, Stevens published the ‘Five Year Forward View’ to try and make £22 billion of savings over the course of this Parliament via prevention initiatives and new ways of working; with the remaining £8 billion coming from the Treasury.

This was backed on the IT front by a new IT strategy, ‘Personalised Health and Care 2020’. However, the acute sector finished the last financial year £2.4 billion in deficit, even if today's DH accounts suggest the NHS as a whole managed to squeak in on break-even, in part thanks to higher than expected National Insurance contributions.

Reviewing this background, the health select committee warned earlier this week that the NHS not only faced a “colossal” financial challenge, but that it had no detailed and deliverable plan to address it.

Sustainability and Transformation Plans to implement the Forward View, into which local digital roadmaps have been rolled, are not due until October onwards.

The reset document says the £1.8 billion Sustainability and Transformation Fund that NHS England has carved out of the ‘frontloading’ of the Treasury's £8 billion will be available in 2016-17; but that access to the fund will be linked to the achievement of financial and waiting time targets.

However, it also sets out three areas where it expects specific action to be taken to improve the financial position this year. The first is pay growth, which may affect IT because trusts are already complaining that low pay bands and a curb on contractor rates is making it hard to recruit staff.

The second and third are consolidating back office and pathology services, in line with the latest Carter review of NHS efficiency, which will also require considerable changes to IT in these areas.

The reset document concludes by warning: “The future success of the NHS depends on providers and CCGs using this year to ‘reset’ their performance. NHS Improvement and NHS England will not hesitate both to support people in doing so and to step in where needed to ensure this is secured.”

The five trusts put into the new special measures regime are: Barts Health, Croydon Health, Maidstone and Tunbridge Wells, Norfolk and Norwich University Hospitals, and North Bristol NHS trusts.

The nine clinical commissioning groups put into special measures are: Coventry and Rugby, Croydon, East Surrey, Enfield, North Somerset, North Tyneside, South Gloucestershire, Vale of York and Walsall.