Select committee inquiry
The Financial Sustainability of the NHS inquiry
Closed
What the inquiry looked at
“The financial performance of NHS bodies worsened considerably in 2015–16 and this trend is not sustainable, according to the National Audit Office . In 2015–16, NHS commissioners, NHS trusts and NHS foundation trusts reported a combined deficit of £1.85 billion, a greater than three-fold increase in the deficit position of £574 million reported in 2014–15. Provider trusts' overall deficit grew by 185% to £2.45 billion, up from £859 million in 2014–15, against total income of £75.97 billion. In addition, two-thirds of NHS trusts (65%) and NHS foundation trusts (66%) reported deficits in 2015-16, up from 44% of NHS trusts and 51% of NHS foundation trusts in the previous financial year. The number of clinical commissioning groups reporting cumulative deficits was 32 in 2015–16, up from 19 in both 2014–15 and 2013–14. National Audit Office report According to the NAO report, the NHS entered the current financial year from a worse than expected starting point. This year's plans were based on trusts ending 2015–16 with a combined deficit of £1.8 billion. The fact that trusts ended the year with an even larger deficit means that they will, overall, need to make more savings than planned to reach the intended starting position. Many of the savings made by NHS England in 2015–16 were one-off in nature. NHS trusts and NHS foundation trusts under financial stress continue to rely on financial support from the Department and NHS England. The total amount of financial support funding provided by the Department and NHS England in the last financial year was £2.4 billion. This was an increase of 32% from £1.8 billion in 2014–15. The Department has transferred £950 million of its £4.6 billion budget for capital projects, such as building works and IT, to funding for day-to-day spending. While this helped it to manage the NHS' financial position in 2015–16, it could risk trusts' ability to achieve sustainable service provision. There are indications that financial stress is having an impact on access to services and quality of care. Trusts' performance against important NHS access targets has worsened, and the NAO found an association between trusts' financial performance and their overall Care Quality Commission rating, with those that achieved lower quality ratings also reporting poorer average financial performance. The 14 trusts rated 'inadequate' had a net deficit equal to 10.4% of their total income in 2015–16. The Chair of the Committee of Public Accounts has raised some of these issues following the Autumn Statement and directly with the Prime Minister .”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of 43rd Report - Financial sustainability of the NHS ↗
The Committee’s evidence session began with the Head of NHS England speaking out against comments made in that day’s press by sources at No. 10. We believe that the Department of Health, NHS England and No. 10 must work together in the best interests of patients. The fact that key players running our NHS are bickering in public does little to inspire confidence that patients are at the heart of everyone’s priorities. As this report underlines, the NHS is facing huge challenges. This requires a united effort to resolve these for the long term.
Faced with these pressures, the Department of Health has resorted to raiding the separate capital budget earmarked for long-term investment and is using this to fund day-to-day spending. Reducing investment in the hospital estate and medical equipment risks making the NHS less sustainable in the longer-term and limits the funding for investing in new services in the community. Local sustainability and transformation plans are supposed to be a vehicle for creating a modern day NHS, but NHS England and NHS Improvement have much more to do before the public can feel confident that plans are achievable, especially when the Head of NHS Improvement acknowledges that the 4% efficiency savings required are so challenging. We recognise the unprecedented challenge of achieving financial sustainability when patient demand is rising, budgets are tight and pressures in social care are impacting on the NHS. But the Department, NHS England and NHS Improvement are asking local bodies to solve multiple problems and deliver a range of priorities, without a proper understanding of what they can realistically achieve. Transformation under such pressure is hard to achieve.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 14 December 2016 to its close on 4 January 2018.
- Oral evidence 11 Jan 2017
- Report 27 Feb 2017
What it recommended 4 recommendations · 21 conclusions
1Since our previous reports in 2015 and 2016 the financial performance of NHS bodies has...
Recommended (the committee's words)
Since our previous reports in 2015 and 2016 the financial performance of NHS bodies has worsened considerably and this trend is not sustainable. The financial health of NHS bodies has continued to deteriorate at an alarming rate, with trusts’ deficits reaching a colossal £2.5 billion in 2015–16, up from a £859 million deficit in 2014–15. Two-thirds of NHS trusts (65%) and NHS foundation trusts (66%) reported deficits in 2015–16, up from 44% of NHS trusts and 51% of NHS foundation trusts in the previous financial year. Furthermore, the number of clinical commissioning groups reporting cumulative deficits (the current year’s surplus or deficit added to the surpluses or deficits from previous years) was 32 in 2015–16, up from 19 in both 2014–15 and 2013–14. There has been progress in reducing the size of the trusts’ deficit in 2016–17, which is expected to be around £600 million by the end of the year. But the extra £1.8 billion of sustainability funding that trusts received in 2016–17 has not yet eliminated the trusts’ deficit as planned. The number of trusts in severe financial difficulty has also increased. Some 56 acute hospital trusts had deficits greater than 5% of their income in 2015–16, up from 26 the year before. The problems are not confined to trusts in difficulty as they may have a knock- on impact on the wider health economy. Specifically, in some sustainability and transformation plan areas, organisations with stronger finances have been grouped with those that are struggling, with the risk that some organisations may have to bail out others. Recommendation: The Department, NHS England and NHS Improvement should set out a clear and transparent recovery plan by March 2017 which targets those NHS bodies and health economies in severe financial difficulty.
2There are indications that measures taken to restore financial stability are affecting patients’ access to...
Concluded (the committee's words)
There are indications that measures taken to restore financial stability are affecting patients’ access to services and their overall experience of care. Performance against access targets continues to deteriorate, with worsening performance against the 4-hour waiting time target for A&E, the ambulance response time standard and the target to be treated within 18 weeks of referral. NHS Improvement is currently reviewing the 4-hour A&E standard to reflect latest clinical practices and help ensure that clinicians can focus on the sickest patients. The Department told us there was no intention to drop the target, but we remain concerned that the review might involve downgrading the target in certain areas. There is an association between trusts’ financial performance and trusts’ overall Care Quality Commission rating. Trusts that achieved lower quality ratings had poorer average financial performance, and the 14 trusts rated ‘inadequate’ together had a net deficit equal to 10.4% of their total income in 2015–16. The five top-rated trusts on quality had a combined net deficit equal to just 0.02% of their total income. Recommendation: The Department and NHS England should report back to us by July 2017 on what they have done to understand the association between financial performance and the impact on patient care. 6 Financial sustainability of the NHS
3The repeated raids on investment funds in order to meet day-to-day spending could result in...
Recommended (the committee's words)
The repeated raids on investment funds in order to meet day-to-day spending could result in ill equipped and inefficient hospitals. Capital budgets cover many essential areas of spending, ranging from keeping facilities up-to-date, rolling out new technologies and investing in new care models. It is therefore concerning that the Department moved £950 million out of its separate £4.5 billion capital budget to its revenue budget in 2015–16, to fund day-to-day activities. The Department accepts that moving money from capital to revenue is not a desirable or sustainable approach, but tells us it will need to do so again to balance its budget in 2016–17 and future years. NHS Providers, the representative body for trusts, expressed serious concerns about the restrictions on capital spending. They highlighted the findings of a Care Quality Commission report, which found serious issues at St George’s Hospital Tooting as a result of insufficient investment in operating theatres. Furthermore, NHS England admitted that capital investment has fallen short of what it had considered was needed to deliver the NHS Five Year Forward View. Reducing investment in this important area risks making the NHS less sustainable in the longer-term and limits funding for investing in new community services. Recommendation: The Department, NHS England and NHS Improvement should review and improve national and local planning for capital expenditure in order to call a halt to crisis driven transfers out of capital budgets to meet day to day revenue spending, which is not good value for the taxpayer or the future of the estate.
4NHS England and NHS improvement have much more to do before the public can feel...
Concluded (the committee's words)
NHS England and NHS improvement have much more to do before the public can feel confident that local sustainability and transformation plans are about delivering transformation and efficiencies and not just a cover for cuts in services. The sustainability and transformation plans that health and care leaders have been required to produce for their area are key to driving improvements in health and care services and achieving financial balance. However, very few trusts think they have a credible, robust and rigorous plan for their area which sets out how they will meet the financial targets they have been set. It is vital that the public understand the changes that are being proposed locally and are engaged in the implementation of plans if they are to secure local support and improve the quality of services for patients. But so far, there are no publicly available performance measures for assessing whether the local organisations that have been grouped together have a track record of success. NHS England and NHS Improvement accepted that the quality of plans is variable and said they would need to give “serious help” to those organisations that are struggling. They have not yet published their analysis of the 44 sustainability and transformation plans, but committed to doing so by March
5With extreme pressures on funding, the social care system is unable to meet demand, placing...
Recommended (the committee's words)
With extreme pressures on funding, the social care system is unable to meet demand, placing enormous extra pressure on NHS services. Social care services are under immense pressure as a result of increasing demand for services from an ageing population, combined with restrictions on funding. Local authority spending on adult social care fell by 10% in real terms between 2009–10 and 2014–15. NHS England confirmed that the social care system is not keeping up with demand and this is placing significant strain on NHS services. For example, the number of people experiencing delays in being discharged from hospital as a result of a lack of social care has doubled over the last three years. Both the Department and NHS England need to understand the true scale and nature of the problem if they are to manage these stresses, but there is currently no estimate of the financial impact of social care pressures on the NHS. Recommendation: The Department and NHS England should assess the impact that financial pressure in social care is having on the NHS, so that it can better understand the nature of the problem and how it can be managed. It should publish the findings of its analysis by July 2017.
6The Department, NHS England and NHS Improvement do not yet understand whether, and how, they...
Recommended (the committee's words)
The Department, NHS England and NHS Improvement do not yet understand whether, and how, they can realistically expect local bodies to deliver all that is being asked of them. We recognise the efforts by the Department, NHS England and NHS Improvement to develop a plan for closing the £22 billion black hole in NHS finances. However, we remain concerned about whether plans are really achievable. NHS Improvement admitted that trusts will need to deliver efficiencies of around 4% in 2016–17, 2017–18 and 2018–19, despite telling us in January 2016 that efficiencies of this scale were unrealistic. Plans also assume that the growth in trusts’ acute hospital activity can be reduced from 2.9% to 1.3% per year, although demand for NHS services continues to grow. To reduce the demand for expensive hospital care, the NHS needs to invest in alternative care models, such as primary and community services. But NHS England told us that us that the deficits in trusts mean there is £800 million less money in 2016–17 to invest in out of hospital care and offset the increases in demand. There has been limited testing by the Department, NHS England and NHS Improvement of their estimates for how much they can generate from their savings programmes. Furthermore, local bodies are now facing new challenges, such as the repercussions of Brexit and the challenge of implementing 7-day services and NHS England acknowledged that the national bodies would need to update their plans to take account of these pressures. NHS Providers told us that it was not possible for the NHS to deliver all of its priorities within the resources that it has. Recommendation: The Department, NHS England and NHS Improvement should publish by March 2017 its assessment of whether there is the capacity in NHS bodies to deliver everything they are expected to within the agreed timeframes. 8 Financial sustainability of the NHS 1 Recent performance
7NHS Improvement told us in January 2016 that that the extra £1.8 billion of sustainability...
Concluded (the committee's words)
NHS Improvement told us in January 2016 that that the extra £1.8 billion of sustainability support that trusts received in 2016–17 would “bring organisations back into balance” in that year.8 Whilst there has been progress in reducing the size of the deficits in 2016–17, the deficits have not yet been eliminated as planned. Trusts reported a deficit of £461 million in the first three months of 2016–17, compared with a deficit of £930 million at the same point in 2015–16. The deficit in the first three months of 2016–17 included some £450 million of extra sustainability funding and without this the deficit would have been £911 million.9 The Department told us that its ‘reset’ plan for returning the NHS to financial balance aims to reduce the trusts’ deficit to about £600 million by the end of 2016–17. NHS Providers estimated that trusts will probably achieve a deficit of between £650 million and £700 million in 2016–17.10
8In our report in March 2016, we noted that trusts’ spending on agency staff had...
Concluded (the committee's words)
In our report in March 2016, we noted that trusts’ spending on agency staff had contributed to their financial distress and that until the NHS solves its workforce planning issues it was unlikely to bring the deficit under control.11 NHS Improvement highlighted that there had since been progress in reducing trusts’ spending on agency staff, which it forecasts will be around £2.8 billion to £3.0 billion (5.5% to 5.9% of total staff pay) in 2016–1712, compared with £3.7 billion (7.6% of total staff pay) in 2015–16.13 It said there is now more transparency and data on rates of agency pay and trusts are working more closely to obtain better rates. However, it highlighted that there is still more work to do to reduce trusts’ spending on medical locums, by transferring the temporary workforce onto standard NHS contracts and rates of pay.14
9The number of trusts in severe financial difficulty has increased and some 56 acute hospital...
Concluded (the committee's words)
The number of trusts in severe financial difficulty has increased and some 56 acute hospital trusts had deficits greater than 5% of their income in 2015–16, up from 26 the year before.15 In response to our questions about why the difficulties in some providers were so severe, NHS Improvement told us that the financial problems in these trusts had 5 C&AG’s Report, para 1.3, 1.5 & 1.9 6 C&AG’s Report, para 1.21 7 Qq 59, 62 8 Committee of Public Accounts, Sustainability and financial performance of acute hospital trusts, Session 2016–17, HC 709 9 C&AG’s Report, para 1.11 10 Qq 53, 63 11 Committee of Public Accounts, Sustainability and financial performance of acute hospital trusts, Session 2015–16, HC 709 12 Department of Health (TFS0015) paragraph 16; 13 C&AG’s Report para 1.22, Figure 9 14 Q 198, 199; 15 C&AG’s Report, appendix 4 10 Financial sustainability of the NHS built up over a period of about 5 years. It told us the work it is doing with trusts that have recently been placed into financial special measures had been effective in addressing financial problems.16
10The problems are not confined to trusts in difficulty as they may have a knock-...
Concluded (the committee's words)
The problems are not confined to trusts in difficulty as they may have a knock- on impact on the wider health economy. Specifically, in some sustainability and transformation plan areas, organisations with stronger finances have been grouped with those that are struggling. NHS Improvement confirmed that there is no contingency in the system, meaning that if a trust spends more than it plans, they are spending another organisation’s money. It clarified that this in effect means the stronger organisations would need to bail out those that are struggling.17 Services to patients
11Performance against key access targets is deteriorating, with worsening performance against the 4-hour waiting time...
Concluded (the committee's words)
Performance against key access targets is deteriorating, with worsening performance against the 4-hour waiting time target for A&E, the ambulance response time standard and the target to be treated within 18 weeks of referral. For example, the percentage of A&E patients admitted, transferred or discharged within four hours of arrival fell from 95.9% in 2012–13 to 90.3% in the first three months of 2016–17, against a target of 95%.18 NHS Providers told us it is “very concerned” about A&E departments where in some areas the resilience of trusts has been worn away and there is a “significantly enhanced risk”.19
12NHS Improvement highlighted the importance of the A&E standard as an indicator of how well...
Concluded (the committee's words)
NHS Improvement highlighted the importance of the A&E standard as an indicator of how well the NHS is delivering overall. It said it is currently reviewing the standard to ensure it allows clinicians to focus on the sickest patients and to reflect new clinical practices which did not exist when the standard was first introduced.20 The Department told us that recent announcements about the A&E target had highlighted how “we need to have a conversation about how accident and emergency is used”. In response to our questions about whether this meant the standard was being dropped or downgraded, the Department said that “The four-hour target is staying”.21
13The National Audit Office report found there is an association between trusts’ latest overall Care...
Concluded (the committee's words)
The National Audit Office report found there is an association between trusts’ latest overall Care Quality Commission rating and trusts’ average financial performance in 2015–16. The trusts that achieved lower quality ratings also reported poorer average financial performance. The 14 trusts rated ‘inadequate’ together had a net deficit equal to 10.4% of their total income in 2015–16. The five top-rated trusts on quality had a combined net deficit equal to just 0.02% of their total income.22 The Department acknowledged that there is an association between Care Quality Commission ratings on quality and deficits. It argued that managing the quality of care and managing finances go hand-in-hand and the way in which local NHS bodies achieve financial rigour is by performing better on quality.23 16 Q 68 17 Q 189 18 C&AG’s Report, para 1.18 & figure 7. 19 Q 51 20 Qq 91–93 21 Qq 87, 88, 90 22 C&AG’s Report, para 1.20 23 Q 69 Financial sustainability of the NHS 11 2 Risks to future performance Using capital budgets to fund day-to-day spending
14Capital budgets cover many areas of spending, ranging from keeping facilities up- to-date, rolling out...
Concluded (the committee's words)
Capital budgets cover many areas of spending, ranging from keeping facilities up- to-date, rolling out new technologies and investing in new care models. In 2015–16, the Department moved £950 million out of its separate £4.5 billion capital budget to its revenue budget, to fund day-to-day activities. This is the second year the Department has used money originally intended for capital projects to cover a shortfall in its revenue budget. In 2014–15, the Department transferred £640 million out of the capital budget.24
15NHS Providers said there are “real challenges” around whether there are sufficient investment funds at...
Concluded (the committee's words)
NHS Providers said there are “real challenges” around whether there are sufficient investment funds at a time when capital budgets are being raided. They highlighted findings from a Care Quality Commission report, which found issues at St George’s Hospital in Tooting as a result of insufficient investment in its operating theatres.25 NHS England said that increasing infrastructure investment would pay off in terms of both financial savings and providing better services for patients in more modern facilities. But it admitted that pressures from day-to-day spending meant capital investment had been lower than what it had considered was necessary to deliver the Five Year Forward View.26
16The Department accepted that moving money from capital to revenue is not “a sustainable or...
Concluded (the committee's words)
The Department accepted that moving money from capital to revenue is not “a sustainable or desirable approach for the long term”, but told us it will need to do so again to balance its budget in 2016–17 and future years.27 It clarified that its goal is to eliminate capital to revenue budget transfers by the end of the spending review period, which is in 2021. It said that, in its judgement, most of the transfers out of the capital budget in 2015–16 were made possible by the “natural slippage” of capital projects because they had overrun. However, it acknowledged that it is difficult to assess what the consequences will be for trusts that changed their capital investment plans.28 Delivering sustainability and transformation plans
17NHS England and NHS Improvement see local sustainability and transformation plans as the ‘route map’...
Concluded (the committee's words)
NHS England and NHS Improvement see local sustainability and transformation plans as the ‘route map’ for how local NHS bodies will deliver the Five Year Forward View.29 NHS Providers highlighted that they are also a key mechanism for setting out how local NHS bodies will meet the challenging financial targets that they have been set. It said the move to planning as an area, and not just as an organisation, offers opportunities to allocate money across the whole system so that “you do not waste a whole lot of friction time contracting, with commissioners and providers arm wrestling”.30 This was echoed by NHS Enfield Clinical Commissioning Group, who said their local health economy had benefited as a result of NHS bodies and their regulators working more closely.31 24 C&AG’s Report, para 1.27 & 1.28 25 Q 35 26 Qq 74, 83 27 Q 81 28 Qq 78, 79, 82 29 C&AG’s Report, paras 3.5 and 3.6 30 Qq 24, 35, 46 31 Q 21 12 Financial sustainability of the NHS
18All local NHS bodies submitted their plans to NHS England and NHS Improvement by the...
Concluded (the committee's words)
All local NHS bodies submitted their plans to NHS England and NHS Improvement by the end of October.32 But NHS providers said very few trusts think they have a credible, robust and rigorous plan for their area which sets out how they will meet the financial targets they have been set. At the time of our oral evidence session in January 2017, NHS Providers expected it would take organisations another three to four months to develop credible plans for closing the gap. NHS Enfield Clinical Commissioning Group told us that it was “entirely possible” that it would achieve its plan, but said this relied on delivering the transformation of services included in the plan. It added that it considers its plan is realistic and credible if those changes occur.33 NHS England and NHS Improvement accepted that the quality of plans is variable and NHS Improvement said it would need to give “serious help” to those organisations that are struggling.34
19It is important that the public understand the changes that are being made locally and...
Concluded (the committee's words)
It is important that the public understand the changes that are being made locally and are engaged in the implementation of plans if they are to improve the quality of services for patients. So far, there are no publicly available performance measures for assessing whether the groupings of local organisations are doing well, and NHS England and NHS Improvement have not yet published their analysis of the 44 sustainability and transformation footprints. NHS England said it would publish some performance measures in April 2017, which will include indicators for both health and social care.35 By March 2017, it will also publish its analysis of the 44 sustainability and transformation plans, including details of how the 44 local plans are contributing towards the £22 billion of efficiencies that need to be delivered nationally by 2021.36 Pressures in social care
20Social care services are under significant pressure as a result of increasing demand for services...
Concluded (the committee's words)
Social care services are under significant pressure as a result of increasing demand for services from an ageing population, combined with restrictions on funding. Local authority spending on adult social care fell by 10% in real terms between 2009–10 (£16.3 billion) and 2014–15 (£14.6 billion).37 In addition, people are living longer, and whilst in 1948 half of people died before the age of 65, this is now as low as 14%.38 NHS England told us that the social care system is not currently keeping up with demand and this is placing significant extra strains on NHS services. For example, the number of people experiencing delays in being discharged from hospital as a result of a lack of social care has doubled in the last three years and this has reduced the capacity that is available in hospitals.39
21The Department acknowledged the pressures in social care.
Concluded (the committee's words)
The Department acknowledged the pressures in social care. It said the new social care precept (which allows councils to raise council tax by up to 3% in the next two years) and the transfer of money from the New Homes Bonus would raise up to £900 million in extra funding for social care.40 It also highlighted additional measures which include funding for adult social care from the Better Care Fund, which will be worth £1.5 billion 32 C&AG’s Report, para 3.9. 33 Qq 26, 27 34 Qq 138, 180 35 Qq 145–148 36 Q 115 37 C&AG’s Report, para 2.9 38 Q 97 39 Q 117 40 Q 130 Financial sustainability of the NHS 13 by 2019–20, and an additional £240 million through the Adult Social Care Support Grant.41 NHS Providers said that the recent announcement, designed to enable local authorities to increase spending on social care, falls well short of what is needed to fully protect social care services.42 The Department also pointed to better integration between health and social care services as part of the answer to the challenges, but acknowledged that there is variability across the country in terms of how well these services are currently integrated.43 Despite both the Department and NHS England recognising the pressures in social care, they have not taken account of the impact this has on the NHS in their plans for closing the £22 billion black hole in NHS finances.44 Closing the £22 billion efficiency gap
22In our March 2016 report we found that there was not yet a convincing plan...
Concluded (the committee's words)
In our March 2016 report we found that there was not yet a convincing plan for closing the £22 billion efficiency gap and avoiding a ‘black hole’ in NHS finances.45 Since then, the Department, NHS England and NHS Improvement have agreed their responsibilities for delivering the efficiencies to close this gap. They estimate that national bodies will deliver £6.7 billion of efficiencies by capping public sector pay, renegotiating contracts, implementing income-generating activities and reducing running costs. They estimate that trusts and commissioners can make a further £14.9 billion by moderating the growth in demand for healthcare services and achieving efficiency and productivity improvements.46
23The plan to close the £22 billion efficiency gap is based on a number of...
Concluded (the committee's words)
The plan to close the £22 billion efficiency gap is based on a number of assumptions and estimates about how much the savings programmes can generate. But there has been limited testing by the Department, NHS England and NHS Improvement of their estimates of expected savings, which raises concerns about whether planned savings can be achieved.47 Similarly, NHS Providers told us that trusts were starting from a worse than expected starting point, and questioned whether the assumptions that had been made were realistic.48 For example, NHS Improvement confirmed that trusts will need to generate efficiencies of around 4% in 2017–18 and 2018–19,49 despite telling us in January 2016 that the 4% efficiency target for 2014–15 was unrealistic.50 The efficiency requirement in the national tariff payment that trusts receive was 2% in 2016–17, but NHS Improvement explained that trusts will need to achieve efficiencies of around 4% in order to meet their financial plans. It told us that no system in the world can deliver this level of efficiency over the longer-term and admitted that it “would rather it be lower”.51 41 Department of Health (TFS0015) paragraph 16 42 NHS Providers (TFS0010) para 6.2 43 Q 130 44 C&AG’s Report, para 2.9 45 Committee of Public Accounts, Sustainability and financial performance of acute hospital trusts, Session 2015–16, HC 709 46 C&AG’s Report, paras 2.2 and 2.3 47 C&AG’s Report, para 2.6 48 Q 47 49 Qq 192 &193 50 Committee of Public Accounts, Oral evidence: Sustainability & Financial Performance of Acute Hospital Trusts, Session 2015–16, HC 709 51 Qq 193 & 194 14 Financial sustainability of the NHS
24Plans also assume that the growth in acute trusts’ hospital activity can be reduced from...
Concluded (the committee's words)
Plans also assume that the growth in acute trusts’ hospital activity can be reduced from 2.9% per year to 1.3% per year, but we heard concerns about whether this was achievable.52 NHS Providers said that there are some “real challenges” about whether primary and social care services are strong enough to move care out of hospital and reduce demand to the extent that is needed.53 NHS England told us that in its activity modelling for the Five Year Forward View, it had assumed that activity would rise in the early stages until the benefits of other investments kicked in. But it admitted that some of the investments had not happened, due to the financial difficulties in trusts.54 For example, clinical commissioning groups have been asked to hold back £800 million of their budget in 2016–17 to offset the deficits in trusts, but this could otherwise have been invested in primary and community services. Similarly, £1.8 billion of the £2.14 billion Sustainability and Transformation Fund was used as sustainability support in 2016–17, rather than invested in transforming services.55 The Department said that they expected hospitals to get busier every year, but over the last year demand has been higher than anticipated.56
25Local bodies are also facing new challenges, such as the repercussions of Brexit and the...
Concluded (the committee's words)
Local bodies are also facing new challenges, such as the repercussions of Brexit and the challenge of implementing 7-day services, which are not yet factored into plans for closing the £22 billion efficiency gap.57 For example, the Department said that there are a number of implications from leaving the European Union, such as the impact on the workforce, which currently has a large proportion of employees from the European Union.58 NHS Providers argued that there is a gap between the priorities and demands being placed on the NHS and the funding available, and called on the NHS to set out what it was not going to do.59 NHS England recognised that it needed to take stock and ask “Given where we are, what practically are the things the health service needs to do and can itself offer over the course of the next two years?” NHS England said it would be doing that and publishing an update of its delivery plans by the end of March 2017. It said that the published update would cover the Five Year Forward View delivery plan for the next 2 years, meaning 2017–18 and 2018–19, but potentially also with some elements of 2019–20.60 52 C&AG’s Report, Figure 11 53 Q 35 54 Q 110 55 Q 62 56 Q 106 57 C&AG’s Report, para 2.6 58 Qq 110 & 202 59 Q 3 60 Qq 55, 110–112 Financial sustainability of the NHS 15
Evidence
Oral evidence sessions 1
- 11 Jan 2017No witnesses recordedparliament.uk ↗