Financial sustainability of the NHS
Public Accounts Committee 21 February 2017
- Summary
- 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.
- Recommendations
- 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 difficult
- 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.
- 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.
- In its analysis of the 44 sustainability and transformation footprints, due by the end of March 2017, NHS England and NHS Improvement should set out how they will support organisations to deliver real transformation in the areas where plans fall short. They also need to convince the public of the benefits of the plans to them.
- 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
- 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.
- See also verbal evidence to the PAC by Simon Stevens on 27 February 2017 here.