NHS Finance


Another blow to STPs as current plans require £10bn of fresh funding

The majority of the 44 STP footprints are expecting to require new capital funding in order to finance the projects under their health and care plans, many of which include vital buildings and community facilities – with current estimations predicting that almost £10bn will be needed in total.

According to a Freedom of Information investigation conducted by the BMA, 36 STP footprints have projected capital demands so far, with more than half telling NHS England that they will need more than £100m of upfront funding to make the changes outlined in their plans.

A handful of other areas, such as Greater Manchester, Cambridgeshire and Peterborough and West Yorkshire, have quoted needs of more than £500m. Altogether, the 36 footprints are expecting to need around £9.5bn of fresh funding to make STPs work.

But the BMA has claimed that NHS leaders are unlikely to have anything close to the money currently required, given that existing budgets are already under significant strain to deliver ‘business as usual’ demands. This had already been laid bare in NHS England board papers from last year, but the union has now put a price tag to the problem.

Lincolnshire’s STP, for example, said that “access to capital funding is critical to the delivery of the clinical service redesign”, while Kent and Medway STP suggested a lack of new capital would be a “significant barrier to change”.

The BMA’s investigation also found that staff nationwide are now working through the plans to work out which small- to medium-scale projects can be financed and implemented “in the next few years”. In the meantime, they are working with their local footprints to “review and refine” their capital demands.

The union’s council chair, Dr Mark Porter, argued it is likely these capital needs will be left unfulfilled, proving that the process “was doomed to failure all along owing to inadequate funding and a lack of political will to transform services properly”.

The BMA maintains that the STP process could have offered the chance needed to change “some of the problems that hang like a millstone around the health service’s neck”, such as unnecessary competition, expensive fragmentation and buildings that are unfit for purpose.

But it argued that, in reality, they have been used a vehicle to meet the government’s wider aims of saving £26bn by 2020-21 – in what Dr Porter called “yet another crippling blow dealt by a government with a vicious austerity agenda and lacking the gumption to come up with properly funded solutions for a health service in crisis”.

“There is clearly nowhere near the funding required to carry out these plans and it appears that NHS England and NHS Improvement have probably known that for quite some time,” he added. “The STP project is built on the least stable of foundations. These plans are fast becoming completely unworkable and may have been a waste of time and effort in an NHS desperate for help.

“From the very beginning this process was carried out in near secrecy by rushed health and social care leaders trying to develop impossible plans for the future while struggling to keep the NHS from the brink of collapse. The clinicians who are expected to deliver this flawed revolution were not engaged and many staff have had little or no involvement.”

Although the Department of Health was handed an annual capital allocation of £4.8bn in the Spending Review, the BMA stressed that this money is being used to plug “vast hospital deficits” and will be otherwise “soaked up by other demands”, echoing similar remarks from the Nuffield Trust.

At a Public Accounts Committee inquiry last month, NHS Providers boss Chris Hopson even admitted a quarter of this budget – over £1.bn – had been diverted to “prop up the revenue”, whilst the department’s finance director, David Williams, said this was likely to continue this financial year.

According to the BMA’s calculations, if the capital budget continued to be raided, and if £2bn was used to pay for outstanding ‘significant’ or ‘high-risk’ maintenance needs across hospitals, the leftover budget would stand at around £1.6bn for the next financial year. And this, it added, would be without even considering the cash needed to take forward ‘business as usual’ projects, such as building new facilities.

The union argued that its calculations cast doubt over the future of the entire STP process, which may face a brick wall when the time comes for “genuine transformation”.

Plans must be ‘robust’ to access funding

During its investigation process, the BMA stated that NHS England “refused” to give a figure for how much capital funding would be protected for planned STP projects.

They did, however, acknowledge that capital budgets in total “are under significant pressure”, and that STPs will “need to be very robust in terms of demonstrating strategic intent, benefits and value to access capital funding”.

“NHS England and NHS Improvement are working with local STP footprint areas to review [and] refine capital asks and decide which ones might be funded,” a spokesperson told the BMA.

“As an initial priority, national bodies will prioritise schemes that are of small to medium scale, can be implemented over the next few years, and that improve productivity or generate wider savings over that timeframe.”

Separately, an NHS England spokeswoman argued that rather than “just commenting from the sidelines”, health and care leaders and clinicians are “coming together to actually try and solve some deep-seated problems by identifying practical ways to improve services”.

“Yes, there are well known pressures and constraints facing the NHS, but for patients’ sake we should obviously all try and make the best of the situation, rather than just stand to one side and say ‘well I wouldn’t start from here’,” she added.

The Royal College of Nursing came out in support of the BMA today, with its England director, Tom Sandford, warning: “While the aspirations of STPs may be admirable, the lack of any financial commitment from the government is their Achilles heel.

“We remain concerned these plans will be used to make savings, and short-term cuts to hospital beds and community services will be made without any plans for the long-term change envisaged by NHS England.”

Alongside the union, the royal college called on the government to act on “what is now a health and care funding crisis”, as well as to make sure this is reflected in the upcoming Spring Budget.


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Dr Teck Khong   16/02/2017 at 10:58

Poor excuses for political leveraging.

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