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02
Jul

NHS plan jeopardised by unfinished business on funding and rising demand


Analysis from the Health Foundation and NHS Confederation warns that success or failure of the NHS Long Term Plan will depend on whether the government commits to supporting investment in the workforce, capital infrastructure, the prevention agenda, and social care. These areas of funding were excluded from the five-year NHS funding settlement, announced last year.

 

Without urgent action on wider health funding, and with over-stretched, under-staffed services and poorly maintained facilities, the health service will continue to struggle in the face of rising demand.

 

Under the new funding settlement, NHS England’s budget is set to increase by £20.6bn in real terms and NHS leaders have laid out a plan to allocate the additional funding towards necessary improvements in mental health, primary and community services. But to meet growing patient demand, hospital activity will need to rise by at least 2.7% a year by 2023/24. 

The Health Foundation’s new analysis reveals that if NHS earnings are to keep pace with wage growth for other professions, the extra money will only enable hospital activity to grow by 2.3% over this period. Managing demand to this extent would require a major change to recent trends – demand for hospital services has increased by 3% a year since 2010/11.

Frontline NHS leaders responding to the NHS Confederation survey say reducing demand for acute care through better integration and prevention is essential. But they are not confident of this being achieved – only one in four leaders believe their local health systems will be able to reduce the rate of growth in demand. Funding cuts to social care and public health are undermining pioneering new service models designed to keep people well and out of hospital, and nine in 10 leaders are not confident the NHS will be able to deliver the reforms set out in the plan without a long-term financial settlement for social care.

While endorsing NHS leaders’ vision of more preventative care, integrated community services, and better-coordinated urgent care, the briefing and survey caution that investment in these areas will take time to have an impact on people’s use of hospitals. The Health Foundation says that with no funding provision to account for the time it will take to reduce demand, simply moving money from acute care to primary and community services risks leaving hospitals without the resources they need.

The government has changed the planned phasing of the additional £20.6bn in funding which means there will be modest increases over the next couple of years with the largest injection in 2023/24. The Health Foundation says that this runs contrary to the front-loaded settlement announced last summer and will make it hard to support a period of initial investment in care outside of hospitals. It highlights that if demand for hospital services can’t be reduced, we are likely to see increasing waiting times and the planned investment for improvements diverted to prop up struggling hospitals.

The Health Foundation and NHS Confederation say that improvements will only be possible if critical staff shortages are addressed and NHS Trusts can increase productivity through essential investment in buildings, technology and equipment.

Workforce concerns are at the top of the list for frontline leaders, with two thirds of respondents to the NHS Confederation survey not confident that their local health systems will be able to meet increased demand for staff as a result of the long-term plan. Turning to capital spending, more than eight in 10 respondents say a lack of NHS capital investment has inhibited the ability of local health systems to deliver the goals of the plan.

The Health Foundation analysis confirms that to maintain current levels of quality and access to services over the next five years, the total healthcare budget would need to increase by 3.4%, meaning that funding for workforce, capital and public health would increase at the same rate as funding for frontline services. But to deliver the high quality and better-value for money services set out in the NHS Long Term Plan, there is a strong case for a rebalancing of day-to-day spending and longer-term investment. This would mean increasing the total health budget by 4.1% a year in line with the projections produced by the Health Foundation and IFS in 2018.

The briefing also notes that the NHS Long Term Plan has been developed with the expectation of a sustainable settlement for social care and action to prevent ill health*. With no action on funding, the money available for adult social care will rise at an annual average rate of 1.4% a year – much lower than the 3.4% a year the government has committed to the NHS. The Health Foundation warns that, if this continues, there will be a social care funding gap of £4.4bn in England in 2023/24 just to meet rising demand and address critical staffing shortages in the sector.

Dr Jennifer Dixon, Chief Executive at the Health Foundation says: "The vision set out by NHS leaders in the long-term plan is the right one, and the extra funding announced by Theresa May last summer is welcome. But this is not job done.

"Policymakers need to face the fact that there is urgent unfinished business if the NHS is to deliver its vision to improve patient care. There are mounting workforce shortages, the social care system is starved of funding, capital investment is going backwards, and public health funds cut. This all piles demand on the NHS and risks swallowing up the extra money and leaving far less to modernise care, reduce waiting times, and prevent illness in the first place. The NHS is being seriously hampered in efforts to move forward. How can any industry significantly boost productivity without investing in staff training, technology and kit?

"The new government needs to honour last year’s promises to set out long-term funding for public health, capital investment, workforce training and social care, and ensure they receive sufficient funding to support the long term plan ambitions."

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