NHS Finance

12.10.16

Over-ambitious STPs risk ‘blowing up’ because of scary funding shortfall

Local health economies are developing “vastly over-ambitious” sustainability and transformation plans (STPs) to try to meet multi-million pound funding shortfalls, the chief executive of NHS Providers has told MPs.

Speaking at a Health Select Committee inquiry yesterday afternoon, Chris Hopson said that health providers were told they could only submit STPs if they met the 2021 funding allocation, which comes after the ‘U-turn’ in NHS finances.

He described this as a “scary figure” with “millions of pounds of gap”, adding: “Every one of our members is up for a realistic stretching efficiency challenge, but the problem is the size of financial hole that is now being created in 2021.”

An impassioned Hopson said: “If you’re told you have to balance, that you can’t submit a plan if you don’t balance, then what that means is people are coming up with, to be frank, vastly over-ambitious plans that effectively rely on either vastly over-ambitious management plans or more often service reconfigurations that, to be frank, we know are not going to happen because they won’t command the required political support and there isn’t the capital available.”

The STPs were criticised recently by campaign group 38 Degrees after it revealed that they include potential hospital closures.

According to a survey from the Healthcare Financial Management Association, just 16% of NHS finance directors think a sustainable STPs are achievable.

Hopson said that the STP idea had “a lot of good in it”, but was being held back by the “breakneck speed” at which it has to be delivered and ongoing funding problems.

NHS Improvement papers show that it will be “extremely challenging” for trusts to complete their operational plans to support STPs for the March deadline.

“Our members are saying to us that they are spending quite a lot of time completing plans that, in their view, are not deliverable, and usually involve major structural service changes because that is the only way where they can create a balanced plan,” he said.

“And our view is that really risks blowing up and destroying a process that actually seems to us to have a huge amount of fundamentally positive benefits, and that is a consistent story that we’re getting from virtually all of our members.”

Hopson added it was “simply no longer possible” to “square the circle” of demand increasing and funding dropping.

He said the government expected the NHS to balance its budget without increased funding in the same way as other departments, but that this was not possible because of the strict requirements for which services the NHS delivers.

“Our members are trying to make the circle square by coming up with some very, very over-ambitious service reconfiguration plans that we know aren’t going to work,” he said. “If that is going to be the financial envelope, we need a proper, more effective debate about what other ways we are going to use to close that gap.”

‘Very real concerns’ about local authority involvement

Stephen Dorrell, chair of the NHS Confederation, also appeared in the hearing, and said that STPs should focus on delivering their goals of addressing the quality gap and the outcome gap as well as the finance gap. He said the “biggest gain” they offered was directing more resources towards social care.

Speaking at the Health+Care conference in June, Dorrell said STPs offer a “new vision” for more integrated care.

However, he added that there were “very real concerns in some parts of the country about the extent to which local authorities are true partners in the STP process”.

Dorrell said local government leaders were “better” at asking questions such as how long it would take to deliver plans.

An investigation by NHE’s sister title Public Sector Executive found that less than a third of councils reported having taken part in their local STP leadership nomination discussions.

In addition, Dorrell said: “This process needs to be strengthened to involve the professional staff working in the health and care system, it can’t be something that’s done to them by a bunch of experts meeting in an STP committee.”

Julie Wood, chief executive of NHS Clinical Commissioners, said that STPs needed to look at “the totality of the resource” and avoid shifting funding shortfalls from commissioners to providers.

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Comments

Jem   12/10/2016 at 12:27

#deckchairs/Titanic

Roger Steer   12/10/2016 at 15:06

Hopson is right. But another name for vastly overambitious is foolhardy and doomed to failure. In our work looking at plans in detail we find little evidence that plans are coherent, backed by evidence and rest in most cases on a hope that investment in out of hospital care will act as a substitute for hospital care. Its not ; its merely a complement ; and US strategies will not work in the Uk context. The Uk has the most concentrated acute sector in Europe; lower levels of social care, and squeezing both will yield very little. Pretending plans work and kicking the can down the road may buy time but not enough. Time to make a stand.

Marianne Overton MBE   13/10/2016 at 03:31

This government is intent on raising more tax and reducing services, like an efficient business, but they also have a country to run, serving residents. Is the government focussed enough on serving residents?

Alan Lansdowne #Handsoffhri   13/10/2016 at 08:53

On Monday, 10th October, campaigns critical of their local hospital reconfiguration proposals travelled simultaneously to Westminster from Chorley & South Ribble, Lancashire; from Banbury, Oxfordshire (Hands Off Our Horton); from Lincolnshire (Fighting 4 Grantham Hospital); from southwest London (Keep Our St. Helier Hospital); from Southeast London (Lewisham); from West London (Ealing Save Our NHS) and from Huddersfield & Calderdale, West Yorkshire (Hands Off HRI). See: Hospital Campaigns Converge on London (Oct 10th, 2016) http://www.youtube.com/playlist?list=PLxwGj_mtsYjRmxDY2saFY1TUHquRO532L

Paul Bunting Bsc Msc   04/11/2016 at 16:37

The NHS is severely underfunded. In Sussex, a CCG could not renew the contract to a Sussex Ambulance Service for running the Routine Patient Transport Service because of cuts in CCG funding. So the CCG awarded the contract to a private transport firm which failed to attend on day one and many patients missed, or were severely delayed in reaching, their Hospital appointment and subsequently the Hospital staff were working until midnight to treat all the patients who arrived very late for their appointments. The private firm sub-contracted to another firm which did provide vehicles and staff at all the Hospitals but this effort bankrupted the second firm. Then the Hospitals paid for cabs to collect the patients for their treatments and to return the patients home with the first private firm repaying the cab fares because of its breach of contract. Now the Routine Patient Transport Service is being returned to the NHS to provide. This chaos was caused by severely underfunding the NHS combined with imposing customer and shop competition on the NHS, and what the Secretaries of State have done is to dump us all in this low level market in which there is a stench of back-hander corruption with clinical incompetence and commercial incompetence flourishing. This is NOT the way to run the NHS! The NHS Commissioning function has increased the administration charge on the NHS budget from the 5% it used to be up to 15-30% to no benefit to the patients or the NHS and this money would be better spent on training and recruiting more doctors and nurses, shortening waiting times, and improving the care of the patients.

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