NHS Improvement is talking about an “NHSI bond” as a kind of equity release scheme for hospitals with spare land that want to sell it off, and get some fast money up front to invest in modernisation, land sales often being lengthy events. This idea is a response to the Department of Health’s capital budget being frozen at £4.8bn a year over the course of this parliament, which in real terms means it is being cut. The capital budget covers all NHS spending on buildings, equipment and IT and has been repeatedly raided in recent years to put funds into the revenue accounts of struggling NHS Trusts, so that they can pay wages and buy drugs. A further £1.2bn transfer from the NHS capital budget to its revenue budget is planned for 2016-17
One consequence of this raiding is a big increase in the backlog of maintenance problems at NHS trusts, where over 18% of the Estate pre-dates the foundation of the NHS in 1948. Many parts of the NHS need better IT, better diagnostics and safe, well designed buildings. Most of the 44 Sustainability and Transformation Plans will include bids for capital investment to underpin the changes they plan in services. These are unlikely to be granted by the present government, which is sceptical about the NHS’s ability to use capital effectively. Many trusts have built facilities that have too much or too little capacity, whilst others have forced through unaffordable plans, in the expectation of being bailed out. Some have benefitted from having valuable land. Very little investment has been designed to support new models of care, but instead most has gone into the same mid-20th century model of medicine. And there has been too little thought about capital- for-labour substitution.
On top of the planned capital-to-revenue transfer, that part of the Department of Health’s revenue budget not allocated to NHS England is likely to fall from £10.5bn to £8.6bn by 2020-21. Much of that reduction will come from the £1.2bn Health Education England currently spends funding bursaries for nurse education. These will be replaced with student loans from 2017-18. A further saving will be made by cutting public health spending, which will fall in cash terms by £300m by 2020-21.
Few in the NHS see this situation as sustainable. The investment in new technologies that could streamline medical care and possibly save some revenue in the future is blocked by dwindling capital budgets that are being used to maintain cash flow. To many this looks like a deliberate attempt by the government to induce a crisis.
Difficulties in recruiting and retaining staff have meant that Trusts have increasingly relied on expensive agency staff. Last year NHS England capped expenditure on agency staff, but it has only partially worked. So far this year agency expenditure on agency staff has been £1.5bn, some £312m less than the same period in 2015-16, but still 16% above the plan. Trusts are currently forecasting that annual expenditure on agency staff will be £900m less than last year’s actual spend of £3.6bn. Nevertheless the forecast remains £200m above target.
Whilst we are on the subject of workforce, those who believe that the NHS is on its knees may be surprised to learn that some parts of it are growing in the usual NHS way – by adding more staff. One Trust has announced that it has altered its plan to add over 4,000 full time equivalent jobs, reducing the expansion to just under 1,000, and so saving more than 3,000 salaries, pension contributions and the like. Is this the way to save, by foregoing expansion? Are cuts in intended growth really cuts?
Ben Clover of the Health Services Journal says it like it is:
The own-goal secrecy of the STP process and the search for any radical content in the plans can obscure what an organisational mess many of them are. In any STP there will be the statutory bodies – commissioners and providers – each with their own board and subcommittees. The leads from these organisations make up the membership of the STP, which is not a statutory body. But although they don’t legally exist, everyone must comply with what an STP says because their authority is mandated by NHS Improvement (a non-statutory body made up of two statutory bodies stuck together) and NHS England (a statutory body). London Eye, Thursday 17th November 2016
The Buckinghamshire, Oxfordshire and Berkshire West Sustainability and Transformation Plan seeks to achieve £34.2m of workforce savings by the “use of generic support workers (across health and social care), reduction of nursing grade input, increased use of healthcare assistants and physicians associates and more flexible uses of emergency care practitioners and advanced nursing practitioners”.
This approach may not be soundly evidence-based. A recent research study suggests that diluting the nursing skill mix increases the risk of patient death. (Linda Aiken and colleagues Nursing skill mix in European hospitals: cross-sectional study of the association with mortality, patient ratings, and quality of care. BMJ Quality & Safety, published on-line on 5 November 2016)