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Capital crisis: STP money fails to materialise

STPs infographic
STP areas throughout the country require vast funds that don't exist

Controversial plans to transform and integrate health and social care services require at least £9.5bn of capital funding – but NHS leaders don’t have the cash and will ask for demands to be ‘reviewed’ and ‘refined’.

A BMA investigation into the 44 STPs (sustainability and transformation plans) in England has revealed the vast sums needed just to create the infrastructure to deliver the projects, with costly building projects and investment in community facilities vital to the plans.

Each part of England was asked to draw up their plan last year in a bid to make savings of £26bn by 2020/21 – but the process has been mired in lack of engagement and criticisms over the quality of final draft plans.

Following a series of Freedom of Information requests, the BMA has found that NHS leaders are unlikely to have anything like the capital required to deliver the projects, with budgets under ‘significant pressure’.

National staff are now sifting through the plans to work out which ‘small to medium scale’ projects can be funded and implemented over the ‘next few years’ – and are working with local areas to ‘review’ and ‘refine’ capital demands.


No political will

BMA council chair Mark Porter said the extent of the capital requirements that will be unfulfilled show the process was doomed to failure all along owing to inadequate funding and a lack of political will to transform services properly – with politicians and health leaders instead focused on making savings.

He said: ‘From the very beginning this process was carried out in near secrecy by rushed health and social care leaders trying to develop impossible plans for the future while struggling to keep the NHS from the brink of collapse.

‘The clinicians who are expected to deliver this flawed revolution were not engaged and many staff have had little or no involvement.

‘The BMA has been saying for some time now that the STP process could have offered a chance to change some of the problems that hang like a millstone around the health service’s neck: unnecessary competition, expensive fragmentation and buildings and equipment often unfit for purpose.

‘The reality, however, is that these plans have become a vehicle for £26bn of covert savings – yet another crippling blow dealt by a Government with a vicious austerity agenda and lacking the gumption to come up with properly funded solutions for a health service in crisis.

‘There is clearly nowhere near the funding required to carry out these plans and it appears that NHS England and NHS Improvement have probably known that for quite some time.

'The STP project is built on the least stable of foundations. These plans are fast becoming completely unworkable and may have been a waste of time and effort in an NHS desperate for help.’

More than half of the STP footprint areas have told NHS England they would need more than £100m of upfront funding to make changes – and a handful have quoted capital needs of more than £500m, including Greater Manchester, Cambridgeshire and Peterborough and West Yorkshire.

Of the 44 STP areas contacted by the BMA, 36 responded with their projected capital demands. They totalled £9.5bn but there is unlikely to be anything like that amount of money available.


Money diverted

In the spending review the Department of Health was given an annual capital allocation of £4.8bn from 2016/17 to 2020/21 – but that money is being transferred to cover vast hospital deficits and will be soaked up by other demands.

At a Commons public accounts committee hearing last month NHS Providers chief executive Chris Hopson said a quarter of the capital budget (£1.2bn) had been taken ‘to prop up revenue’ – and DH finance director David Williams admitted that raids on the capital budget were likely to continue.

Mr Williams said: ‘I don’t think anybody would say that shifting capital into day-to-day expenditure is desirable. It is something that we will look to repeat this financial year.’

And on top of that figures suggest hospitals alone need more than £2bn to pay for outstanding ‘significant’ or ‘high-risk’ maintenance needs.

If those costs were paid and health bosses continued to raid capital budgets – as Mr Williams suggested – the capital budget, without taking into consideration any of the vast costs of ‘business as usual’ projects such as building new facilities, would stand at something more like £1.6bn for next financial year.

The figures cast doubt over the future of the STP process, with the plans themselves making it clear that the capital investment demanded is required for genuine transformation.

The Lincolnshire STP says: ‘Access to capital funding is critical to the delivery of the clinical service redesign.’

This is echoed in the Kent and Medway STP which suggests a lack of access to capital is ‘a significant barrier to change’.

And Norfolk and Waveney’s STP says ‘the full benefit from the service and clinical reconfiguration plans’ is unachievable without investment in facilities.


Demonstrating purpose

A spokesperson for NHS England refused to give the BMA a figure for how much capital funding would be protected for the projects outlined by the STPs.

‘The capital allocation to the DH agreed in the spending review was £4.8bn each year from 2016/17 to 2020/21. The published budget is not split out into business as normal, national programme capital and transformation capital.

However, we know capital budgets in total are under significant pressure and STP schemes will need to be very robust in terms of demonstrating strategic intent, benefits and value to access capital funding.’

They added: ‘NHS England and NHS Improvement are working with local STP footprint areas to review (and) refine capital asks and decide which ones might be funded.

As an initial priority, national bodies will prioritise schemes that are of small to medium scale, can be implemented over the next few years, and that improve productivity or generate wider savings over that timeframe.’

Several areas did not respond to BMA requests for their funding – and a few refused to give figures.


Voices from the regions

BMA Yorkshire regional chairBMA Yorkshire regional council chair Rajeev Gupta – whose region has requested around a billion pounds

It is very disappointing. Areas need to be given a clear instruction of what money they have got and then they can work out how you can redesign services to make that work.

‘It’s a lot of wasted time and resources. And it’s caused great disillusionment and frustration for the people who have put the plan together. They should have just said, here’s £100m – what are your priorities?

‘The huge amount of money wasted in running these engagements and drawing up the plan is huge. And it looks futile at this point in time.

‘There hasn’t been a full mapping of the needs of the community, and the plan doesn’t seem to fit well with those needs.

‘There is no denial about change being needed in Yorkshire but an awful lot of what is proposed isn’t in the public arena and is cooked up in the offices of people who are supervising and chairing the STPs.

‘Clinicians have not been engaged at all.’


BMA north-west regional council chairBMA north-west regional council chair Kailash Chand

‘I’ve been saying this is a waste of time for a long time. The ideas and the aspirations may be good but this is not deliverable. It’s not going to be possible. The plans are totally unrealistic.

‘There’s a huge need for investment in our area – we have so many deprived areas and they need money up front even irrespective of the STP.

‘The idea is often great but when you look at the final documents and how it’s going to be done the truth becomes obvious: it won’t happen. There are so many vetoes – if a local authority or foundation trust doesn’t want something to happen it won’t happen.

‘The way the system is set up counts against these plans. And without money and resources there’s no future for them. Even if you agree with the plans they can’t work.

‘I think the future of STPs will end in tears. They will slowly be shelved. NHS England and NHS Improvement need to take this more seriously and look at the problems properly.

‘We have a disaster in our NHS – in my area I can’t even tell you how bad things are, particularly in social care.’


Click on the table below to see the figures in full:

Financial requirements of forty-four STP areas

Find out more about STPs

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