NHS’s financial health is getting worse, warn MPs

Author: Louise Prime
NHS’s financial health is getting worse, warn MPs

The NHS continues to struggle badly “despite the political rhetoric from politicians”, doctors’ leaders have warned as the Public Accounts Committee (PAC) published its report* into NHS financial sustainability. The cross-party committee of MPs said yesterday that although the NHS balanced its overall budget in 2017–18, there is a “worrying level of disparity in financial health and patient experience at a local level”, with “significant disparities in financial performance of individual trusts and clinical commissioning groups (CCGs)” – and it concluded that without firm action to address NHS staff shortages, the NHS will not be able to deliver on the Long Term Plan.

The PAC noted that the long-term funding settlement for the NHS and the NHS Long Term Plan present an opportunity to bring back stability to the health system, but warned that the NHS will not deliver against the plan unless it addresses staffing shortages – there are about 100,000 current vacancies – “that present a major obstacle to the NHS’s financial viability”. They said that should the NHS continue to lose staff at the current rate, or fail to attract enough employees from overseas, “then the situation will rapidly reach crisis point”.

They also warned that the lack of clarity on funding for adult social care, capital, public health and education and training also presents significant risk to the NHS’s ability to deliver the Long Term Plan.

They reported: “We are concerned that the national bodies — the Department of Health & Social Care, NHS England and NHS Improvement — painted an overly positive picture of the future financial sustainability of the NHS, lacked detail on delivering the NHS Long Term Plan, and underestimate the challenges the NHS faces in delivering its long-term plan.”

The Committee’s conclusions and recommendations are:

  1. Although the NHS nearly achieved financial balance in 2017–18, this overall picture masks the significant disparities in financial performance of individual trusts and CCGs. National bodies need to ensure that planning guidance for 2020–21 clarifies the arrangements and timeline for achieving annual financial balance as well as dealing with historic debt, in those organisations with the largest deficits. NHS England should write to the Committee by September 2019 to provide an update on how this guidance is progressing.
  2. The NHS will not be able to deliver on the Long Term Plan unless it addresses staffing shortages. The Department should write to the Committee by July 2019, setting out how issues with the recruitment and retention of NHS staff will be addressed and reflected in the workforce strategy.
  3. The long-term funding settlement for the NHS was not accompanied by funding announcements for capital, social care, public health and education and training. When reporting back to the Committee by the end of July 2019, the Department, along with NHS England and NHS Improvement, should clarify the assumptions that sustainability and transformation partnerships and integrated care systems need to be working to in developing their long-term plans. These include the assumptions on capital, social care, education and training, and public health funding.
  4. The Committee remains concerned that year-on-year transfers of capital allocations to revenue are having an adverse impact on patient services and care. By October 2019, the Department should provide a breakdown of its capital budget for 2019–20 and how this is being earmarked against a specific set of investment priorities and risks such as backlog maintenance.
  5. The rising demand for NHS services is not sufficiently well understood. By September 2019, NHS England and NHS Improvement should write to the Committee to set out how they will: help local bodies better understand the demand for services, what is driving that demand, and how demand could be better met; ensure that a better understanding of how demand is reflected in resource allocation; and ensure that activity plans of local bodies are realistic and take account of the needs of patients.
  6. The success of integrated care systems may be impeded because they are not statutory bodies, and so rely on the goodwill and effective relationships of the organisations involved. The Department, with NHS England and NHS Improvement, should write to the Committee by July 2019 defining the governance arrangements for effective integrated care systems; detail how they will align individual NHS bodies’ responsibilities to improve system management including assumptions regarding suggested legislative changes, and how they will support those areas where partnership working is less well developed.

The British Medical Association (BMA) called on the government to accept reality and act accordingly, to avoid a crisis over the coming summer. BMA chair of council Dr Chaand Nagpaul commented: “This report highlights the clear reality that the NHS is continuing to struggle badly despite the political rhetoric from politicians. The health service is facing an ongoing financial struggle that is impacting directly on patient care, with widespread staff shortages that have left a staggering 100,000 vacancies unfilled. Patients are bearing the brunt of this failure, with lengthening waits at hospitals and GP practices, and delays in other forms of treatment. Instability over parliament’s handling of Brexit is only exacerbating the challenges facing the NHS…

“To avoid a disastrous summer crisis, we need ministers to grasp what is happening on the ground. The promised resource increases in the NHS Long Term Plan need to move from the realm of promises to that of reality, and crucially we need an explicit workforce strategy to address the shortages that are crippling services. We must also acknowledge that the Long Term Plan’s funding commitment fails to account for the need for investment in other key areas such as adult social care, capital, workforce expansion and public health, and needs to be supplemented with additional investment to bring the NHS up to the average funding levels of EU nations.”

*NHS financial sustainability. A report prepared by the Public Accounts Committee, 3 April 2019.