How much has the NHS saved by holding down pay?

Pay restrictions meant £2.6 billion less for NHS staff last year | Nuffield Trust

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With the NHS in England in recent years on a savings drive, this comment from Mark Dayan of The Nuffield Trust asks how much staff have contributed through freezes and caps on their pay packets. But the question is a tricky one. To answer, we need to be able to compare what has actually happened to pay with what would have happened if the NHS hadn’t been trying to make any savings. This data blog explores further and puts a figure on it.

Read the full blog post here

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Understanding the NHS deficit and why it won’t go away

This briefing assesses the financial health of those providers by unpicking the headline figures presented in the official accounts to reveal the true underlying state of the NHS’s finances today, and to outline prospects for the next three to four years | Nuffield Trust

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Image source: Nuffield Trust

  • NHS trusts have begun the current financial year, 2017/18, on course for an underlying overspend or deficit of £5.9 billion. To meet their reported deficit target of £500 million, they will need to cut their operating costs by £3.6 billion and receive temporary extra funds of £1.8 billion.
  • This would require trusts to make savings in one year equivalent to 4.3 per cent of their operating costs – far in excess of any level achieved over recent years and likely to be almost impossible to deliver.
  • A more likely scenario is that they will make cost savings similar to the level made last year. That would collectively leave the trusts with an underlying deficit of around £3.5 billion.
  • The headline deficit for 2016/17 (which ended in March 2017) was £791 million. However, that figure was flattered by billions of pounds’ worth of one-off savings, temporary extra funding and accountancy changes that did nothing to improve the underlying state of provider finances. Once they are removed, the underlying deficit for 2016/17 is £3.7 billion.
  • This is compared to an underlying deficit the year before, 2015/16, of £4.3 billion. As trusts also had to soak up additional inflation costs in 2016/17, the reduction in the underlying deficit between 2015/16 and 2016/17 actually represents providers making £2.3 billion in permanent savings.
  • Projections of future years suggest that, even under optimistic assumptions for inflation and continued high levels of savings, NHS providers will continue to run a large collective underlying deficit until at least 2020/21.

Read the full briefing here

NHS funds held on trust

Guidance for NHS bodies on the acceptance, management and transfer of charitable funds | Department of Health

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This guidance gives an introduction to the general principles determining the financial responsibilities of trustees of NHS charities. It outlines how funds held on trust are handled and managed, including the processes for transferring funds to other bodies.

 

 

NHS funding and privatisation: the facts

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A lecture and article by the scientist Professor Stephen Hawking outlining his views on the NHS have prompted a lively debate about a number of issues.

Here the Kings Fund looks at the facts about two of these: whether the NHS is being privatised and if it has been given the funding it needs:

Is the NHS being privatised?
The involvement of the private sector in the NHS is a hotly contested topic. Private companies have always played a role in the NHS, but critics claim that their increasing involvement is evidence of growing privatisation of care and is undermining the service’s core values.

Does the NHS need more money?
In recent years, spending on the NHS has been protected while other budgets, such as those for local government services and policing, have been subject to significant cuts. Despite this, health services are facing unprecedented financial and operational pressures, with many NHS organisations in deficit and key performance standards being missed.

Financial challenges facing the NHS

The Healthcare Financial Management Association (HFMA) has published NHS financial temperature check: finance directors’ views on financial challenges facing the NHS in England. 

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This briefing draws on the responses of finance directors of trusts and foundation trusts and chief finance officers of CCGs.  It finds the financial performance of the NHS remains under significant financial pressure.

Trusts reported a combined deficit of £791m in 2016/17, after receiving additional funds of £1.8bn from the sustainability and transformation fund (STF).

The performance of CCGs, based on month 11 forecasts, looks better than that of trusts with a forecast in-year underspend of £250m, but this is after the release of the £800m risk reserve to CCGs’ bottom line.

Full document: NHS financial temperature check – briefing July 2017

Additional link: NHS Providers

The rising cost of clinical negligence: who pays?

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The Medical Protection Society estimates that clinical negligence costs in the NHS have increased by 72% over the last five years and that costs could reach £2.6bn a year by 2022.

It argues that there should be reasonable compensation for patients who suffer harm due to clinical negligence but that this must be balanced against society’s ability to pay. The report makes recommendations for legal reforms around clinical negligence compensation.

More detail: Clinical Negligence Costs: Striking a balance

 

 

Sustainability and Transformation Plans: What, why and where next?

The Institute for Public Policy Research (IPPR) has published Sustainability and transformation plans (STPs): what, why and where next

The NHS is facing one of the most challenging periods in its history, with a funding gap of more than £22 billion over the coming years. And the pressure on the social care system is more acute than ever, with many councils raising eligibility thresholds and making cuts to social care budgets.

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Image source: http://www.ippr.org

Sustainability and Transformation Plans (STPs) – which are local health and care reform plans, authored jointly by NHS and local government leaders to improve outcomes and drive greater efficiency in their local area – are one of the government’s main responses to this problem. These plans rightly focus on decentralising power within the NHS, investing in leadership and relationships to drive improvements, and on local health and care organisations coming together to overcome the silos created by the 2012 Health and Care Act.

This report looks at the most promising reform solutions that have been identified by STPs, and also sets out the range of challenges that stand in the way of them realising their vision for improved health and efficiency.

Download summary here or full report here