8 min read

Editorial Wednesday 23 November 2016: Stuck outside the Treasury with the funding blues again

Well. Wasn’t that a bracing few weeks?

Let’s start with the money, shall we? NHS Improvement’s Q2 financial report shows the NHS provider sector gamely struggling its way back towards financial balance.

There are miles to go, of course in the next two financial quarters, as HSJ’s Lawrence Dunhill points out – but the achievements are not nothing, and should be commended.

Providers made £1.2 billion of savings through cost improvement programmes, reducing total year-to-date expenditure by 2.9%. Reducing agency staff costs by around £900 million this year is also significant: in an ideal world, with surplus trained staff, this would mean that substantive appointments were being made.

But “is it safe?"

HSJ patient safety correspondent and key Mid-Staffs chronicler Shaun Lintern looks at some of the workforce issues here. Certainly, the demand pressure on the NHS is massive: year-on-year, major accident and emergency departments face a 4.1% rise in admissions, with a 34.8% increase in bed days lost because of delayed transfers of care.

There’s also the small matter of Brexit (and every time I read a news story about the planning for Brexit, I can’t help hearing the Benny Hill theme tune in my head).

Giving evidence to the Lords NHS inquiry, UHB chief executive Dame Julie Moore warned that there is already evidence of nurses leaving the NHS because of Brexit.

This effect will likely be compounded in the social care workforce.

I mean, what would you do if your UK earnings were worth 20% less due to sterling’s big fall, the cultural and political discourse was making you feel uncomfortable and your rights were utterly unclear? Definitely hang around?

Yeah: me too.

It always comes back to money and safety: which one to compromise? It would be delightful if there were no trade-off, and if we were living in an ideal healthcare world, “the path to safer care is the same one as the path to lower cost”.

Health Secretary Jeremy Hunt made this quote from Virginia Mason’s chief executive Dr Gary Kaplan a lodestone of his 2014 speech about quality and finances.

Alas, quality and safety can slip, as recent events at Virginia Mason demonstrate.

The £10 billion Schumachers
So what about the money? Specifically, the alleged £10 billion extra which Mr Hunt and Prime Minister Theresa May keep mentioning. Commons health select committee chair Dr Sarah Wollaston wrote to Chancellor Philip Hammond asking him about the use of the £10 billion figure, which she correctly termed “not only incorrect but gives the false impression the NHS is awash with cash”.

Meg Hillier, chair of the Public Accounts Committee (whose 2017 work programme is unsurprisingly NHS-heavy) wrote to PM Theresa May in similar vein.

Alas, the Chancellor’s response to Dr Wollaston persisted with the political Schumachers, in a way that leaves the sentient reader neither wiser nor better-informed.

Doctor Who economics
With this £10 billion figure, Hammond and May have managed, without Clarkson, to do something extraordinary: they have invented a new branch of economics. You’ve heard of health economics: now we have Doctor Who economics. £2 billion of the £10 billion involves time travel back to 2014-15 - the last year of the Coalition movement, so the TARDIS comes in handy; and pretty much all the rest’s fantasy.

The National Audit Office’s head Amysas Morse's latest review of NHS financial sustainability observes ”with more than two-thirds of trusts in deficit in 2015-16 and an increasing number of clinical commissioning groups unable to keep their spending within budget, we repeat our view that financial problems are endemic and this is not sustainable.

“It is fair to say aggressive efficiency targets have helped to swell the ranks of trusts in deficit over the last few years. The Department, NHS England and NHS Improvement have put considerable effort and funding toward stabilising the system, but have a way to go to demonstrate that they have balanced resources and achieved stability as a result of this effort.

“Therefore, value for money from these collective actions has not yet been demonstrated”.

I, for one, welcome our new Treasury munchkin overlords
As the smart Chris Ham notes in his latest Kings Fund blog, the NHS is effectively in special measures with the Treasury, due to last year’s DEL breach-but-for-NI-and-PPRS-rebate-cheating.

It is depressing but instructive to consider that if the same happens again in 2016-17, the probable outcome will be some iteration of direct control by the Treasury munchkins. The entire NHS will effectively become a set of Directly Managed Units. That, of course, would require - wait for it - new primary legislation. Hurrah for the 2017 Health And Social Care Act!

Nostalgia isn't what it used to be.

It would be good to be able to say that the Treasury munchkins have a nuanced and perceptive understanding of the demand-drivers and of the various cultural, political and social issues that can make the NHS hard to manage.

It would also be an enormous fucking lie.

So the Faustian pact is this: for 2016-17, the NHS must come in on budget, regardless. As I previously put it, break even, or get broken.

The problem is the ‘regardless’ bit.

Jeremy Hunt knows this. The best of Mr Hunt is a man who is passionate about safer care. He has made a Constable of hay with Mid-Staffs, pinning it successfully if not totally accurately on Labour.

He is now looking down the barrel of a near-certain care quality crisis on his watch. Mr Hunt is not a stupid man, and won't fail to see the political irony. He might even appreciate Professor David Oliver’s latest BMJ blog, which asks if we are re-creating the conditions for Mid-Staffs.

The sack race
Inevitably, mordant speculation is emerging about the relative handicaps of  Mr Hunt and NHS England’s Sun King Simon Stevens in ‘the sack race’.

Ultimately, the question will come down to whether in the court of media, political and public opinion, Simon Stevens is going to be held responsible for the forthcoming care quality scandals.

I’ve written this many times, but it bears repeating: Simon Stevens is nobody’s fool. He has read the funding issue clearly and loudly into the Parliamentary record, to both the Health and Public Accounts committees.

This shrewd act of self-insurance appears to have pissed off Mrs May and her advisors, who consequently briefed the Mail (Mrs May’s leak-receptacle of choice – Mr Cameron preferred the Telegraph) that ”Downing Street is 'gunning for' the head of the NHS for publicly contradicting Theresa May over funding for the Health Service … Simon Stevens caused fury at No 10 by telling MPs that the Prime Minister had exaggerated the amount of extra money promised to the NHS – with one of Mrs May's aides warning that they intended to 'fix' him.

“The row blew up after Mr Stevens told the Commons Health Select Committee last month that Mrs May was wrong to have claimed that the NHS would get an extra £10 billion a year between now and 2020-21, up from the £8 billion promised by former Chancellor George Osborne”.

Dear oh dear. Not only was using the phrase ‘gunning for’ fantastically inappropriate during the trial of the man accused of murdering Jo Cox MP, but the onanistic nature of the political minds behind this is startling.

The first rule of seriously settling scores is that you do not brief a national media outlet that you're going to settle a score.

You just do something about it.

Further back, Simon Stevens was very clear indeed that his five tests on Five-Year Forward View feasibility were two-fifths un-met.

Of course, the Lansley legislation for which Mrs May voted means Team TM can’t sack Simon Stevens. Only Chairman Mal can, and he ain’t going nowhere before October 2018. Which means neither is Simon Stevens likely to - unless he decides he has had enough. It’ll take a smarter and tougher operation than Mrs May’s team to drive that.

Dr Sarah Wollaston’s response was characteristically impressive: she tweeted “if No 10 aides really are 'gunning' for Stevens for upholding his duty of candour, that would set a disgusting example to the NHS.

“There cannot be one rule for government & another for NHS staff. I'm sick of ‪#PostTruth‬ politics & the double standards on duty of candour. I asked him a question at ‪@CommonsHealth‬ & Simon Stevens was right to answer truthfully. It's called duty of candour”.

Dr Wollaston is quite right. It’s also an example of upholding the Nolan Principles, which Mrs May should get her advisors to re-read.

In the same issue of the Mail, Mrs May’s team could be found briefing against the Chancellor on page 2 and the Foreign Secretary on page 10.

Yes, this is the same Theresa May whom we had to be glad wasn’t Andrea Leadsom, Boris Johnson or Michael Gove.

Cyber physical and the internet of things
If there were an opposition, then surely they’d be going full Constable on this.

Guess what? Jeremy Corbyn! Cyber physical! The internet of things!

You’d need to ingest a swimming pool of LSD to make this shit up, wouldn’t you?

Labour’s new shadow health team are trying, although it’s hard to see anyone replacing the monumental Diane Abbott as shadow health secretary of people’s hearts. However, they’re a bit hobbled because they are being prevented from hiring health researchers.

The Short money is available, but Mr Corbyn's office have not authorised them to employ anyone, so they are making do with the support staff they have as local MPs, and consequently they are struggling.

Why is the leader’s office doing this? It’s not obvious. Some suspect that this is part of some plot by John McDonnell to keep them in check, or impose ideological rectitude. After all, Mr McDonnell has form.

The magical thinking about money spread to NHS Confederation chief Stephen Dalton, who wrote this curious piece for The Guardian about getting private sector capital for service change. It argues that “there will need to be significant private investment if plans for transforming the NHS care landscape are to be realised".

Principally, I don't understand Dalton’s argument that there would be a return on capital investment within a timescale that would interest the private sector. The NHS will not imminently by magic have more money to pay the private sector for these services.

Dalton is right that capital is required to transform care delivery - and there is one sensible way to raise it: for the Government to issue long-dated gilts - of the kind that pension funds are (literally) dying to see.

I get that everyone's desperate, and I get that the Treasury munchkins are trying to be impressively butch with the NHS: 'you've been a bad, bad, overspending universal tax-funded public service!'

But let's not have magical thinking in response. Bad ideas don't suddenly become good ideas, just because we're desperate. It’s only a short step from here to imaginary capital. But, hey, why not? We have £10 billion imaginary NHS funding. The UK Statistics Authority's letter to shadow health Jon Ashworth on NHS funding definitions is worth a read.

Where will the care quality crisis come, or be acknowledged? Well, as Joseph Anthony Wittreich wrote in ‘Feminist Milton’, “history may not repeat itself, but it does rhyme”.

It took medical academic celebrity Professor Robert Winston's mum's bad hospital care to make New Labour turn on the NHS funding. I suspect something much like this will have to happen again.

We live in a celebrity age, after all.

And the sustainability and transformation plans?

NHS Relate
STPs are being literally (and understandably) misunderstood as plans. Almost all of them are nowhere near being plans yet. They are sketchy first drafts, which need much more local consultation, input and negotiation before they begin to approach ‘plan’ status.

Correctly understood, STPs are actually new, non-statutory local relationships. And the state of local relationships is such that many will require the services of NHS Relate - which doesn't even yet exist, but I’ve named it already – boom!

(This state of local relationships isn't surprising, by the way: a big part of the the 2000s NHS reforms was about getting organisations to act as autonomous competing silos. You get what you incentivise.)

STPs are Simon Stevens’ best effort to get localities to develop their own Nash equilibrium.

And as this thoughtful analysis by NHS Providers’ John Coutts shows, there are considerable and highly real governance issues that must follow from them.

One of Nobel prize winner Bob Dylan’s best songs gives us our conclusion:
“And here I sit so patiently
Waiting to find what price
You have to pay to get out of going
Through all these things twice”

So here we are, stuck outside the Treasury with the funding blues again. Slight return.

Please stand clear of the closing politics. Mind the gap.