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08.02.17

How much can STPs improve NHS finances in 2017?

Source: NHE Jan/Feb 2017

Paul Briddock, director of policy at the Healthcare Financial Management Association (HFMA), discusses sustainability and transformation plans (STPs) and NHS finance in 2017.

A New Year brings new hopes and expectations, yet as we enter 2017 the NHS financial situation continues to remain fairly bleak. In December, we released our latest NHS Financial Temperature Check, which aims to paint the most up-to-date picture of the situation from those on the frontline of NHS finance. STPs were at the forefront of people’s minds. The survey revealed that despite some positives, many finance directors working in the service feared STPs would struggle to thrive due to governance concerns. 

STPs, which were introduced to transform services and help rebalance NHS finances, are the current focus for those working in the service. Although STPs were met with enthusiasm and positivity when they were introduced, the survey of over 200 finance directors in England found that the overwhelming majority voiced concerns about the way they are set up, with nearly three-quarters (72%) concerned about their governance. 

Inadequate risk management arrangements 

Across STP footprints, emergency care demand, social care budgets and an increasing demand on services are the biggest worries to financial balance. We’ve seen the immediate impact in many of these areas this winter. Only 54% of finance directors believe that risks associated with STPs have been recognised and just 5% believe adequate risk management arrangements are currently in place. 

Despite some worries, our report encouragingly revealed positive feelings around STP leadership and improvements in the collaboration between CCGs and providers. Over half (58%) of NHS finance directors see clear and effective leadership in place, while 46% view relations between commissioners and providers as having improved. The last NHS Improvement Q2 results also showed we’ve made a positive step in the right direction and hopefully marks the start of a gradually improving picture for provider finances. 

Time to see more financial realism 

It’s clear that introducing STPs is a positive approach to help ensure that health and care services address the needs of local populations for now and the future. However, the planned savings for 2016-17 are still ambitious and STPs, although an optimistic move, have a challenging job in delivering efficiency savings and working through the pressures currently facing the NHS, such as sustainable workforce planning and reducing agency costs. 

It’s time to see more financial realism. As we start 2017, the government needs to be transparent about what can and can’t be delivered by the NHS in the year ahead and within the current financial budget. HFMA members expressed their concerns about the control total interventions, aimed to restore the provider sector back to financial balance during 2016-17. They felt the risks associated with them are still too high and many do not expect to meet their control totals. 

Clearly there is more work to do, and it’s still early days to predict whether or not STPs will work effectively. The current turmoil in the NHS has many financial obstacles to overcome and, in the short term, finance directors face many large-scale challenges. The issues facing NHS finance are set to remain challenging, but working through the problems in an open and transparent manner within the optimism a New Year brings will be key to achieving success and improving on the path we began in 2016.

FOR MORE INFORMATION

W: www.hfma.org.uk

Tell us what you think – have your say below or email opinion@nationalhealthexecutive.com

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