See how other areas of our work relate to the NHS funding crisis, including negotiations on seven-day services, sustainability and transformation funding and public health funding.
Privatisation and independent sector provision of NHS healthcare
The NHS is facing unprecedented financial pressures. Every area where spending is increasing needs to be rigorously evaluated.
Every year for the past five years, the amount of money spent by the NHS England on healthcare that is provided by the independent sector has increased, with the current yearly total at nearly £7bn, totalling 6.3% of the total NHS budget.
In response to this, we have released a report examining the increasing extent of privatisation within the NHS, including:
- examining the amount of NHS England budget that is spent on independent providers
- looking at case studies of where independent providers have taken over NHS services and the effect it has had on healthcare provision
- undertaking a survey of doctors asking for their opinions of independent sector provision of NHS healthcare
- using the survey results, as well as data from a number of privatisation indicators, to make eight recommendations for independent sector provision of NHS healthcare
Read the report and see the impact in numbers
The Government has been explicit that the NHS funding increase must also be used to transform the NHS into a seven-day service, something that was not factored into the Five Year Forward View calculations.
Research by the Healthcare Financial Management Association (HFMA) shows that implementing seven-day services would cost up to 2 per cent of a hospital trust's total income, up to £1.4 billion extra annually across the NHS. However, this research was based on a sample of only eight NHS trusts that were not necessarily representative.
There is a significant likelihood that the 2 per cent figure quoted underestimates the true cost of a seven-day service.
It is unclear how the Government has factored in this additional funding pressure into either their budget or their expectation that the NHS will achieve £22 billion of annual efficiency savings by 2020/21.
Find out more about seven-day services
The Spending Review announced £750 million of investment in general practice to 'access GP services in the evenings and at weekends with an extra 5,000 doctors'. It is not clear but it seems likely that this is the remaining money from the £1 billion Primary Care Transformation (formerly Infrastructure) Fund announced in the Autumn Statement 2014 rather than a new commitment.
We do not think that the right approach for tackling the crisis in general practice is to take money previously committed to much-needed improvements in GP infrastructure to dogmatically pursue increased access in the evenings and weekends.
Find out about Urgent prescription for general practice
Sustainability and Transformation Fund
From 2016/17 onwards, funding for transformation will come through a Sustainability and Transformation Fund: £2.1 billion of the £3.8 billion announced for 2016/17 is committed to this fund. The sustainability element, intended to bring the provider trust sector back to financial balance, has been allocated £1.8 billion; whereas the transformation element, intended to support new models of care and implement policy commitments like seven-day services, GP access, mental health and prevention, has only been allocated £339 million.
Over the next five years the amount allocated to the fund will increase, reaching £3.4 billion by 2020/21. We do not yet know the details of how this will be split in future years but NHS England has said that the ratio between sustainability and transformation will change as the provider sector comes out of deficit.
There is a real risk that there will be a lack of available funding for transformation in 2016/17. Returning to financial balance is undoubtedly an important goal but it means that the activity needed to achieve the vision set out in the Five Year Forward View will be pushed back to 2017/18 onwards, where there are much smaller increases to NHS funding.
Find out more about the vision set out in the Five Year Forward View
The Spending Review revealed a cut to public health budgets of 3.9 per cent a year. This is in addition to the 2015/16 in-year cut of 6.2 per cent to local authorities' public health grant. Public health funding is already stretched to the limit and these further cuts mean that local authorities will struggle to fulfil even their statutory responsibilities, let alone provide additional services that will improve population health.
Public health budget cuts will result in increased costs for the NHS and the taxpayer in the future, which will undermine any successful efficiency savings in other areas. The announcements about public health budget cuts were not transparent. By referring to what most would consider to be core NHS services, health visiting, drug and alcohol services and sexual health services, as "Whitehall budgets", the Government has not set out the true extent of the funding cuts.
Read our briefing on the funding constraints facing public health and ill-health prevention