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NHSI shifting to ‘quality-focused phase’ as provider deficit shrinks to £800m

Although the health and care sector “can’t lose grip” of money and performance standards, quality will now start to become more centre-stage in NHS Improvement’s (NHSI’s) priorities, the organisation’s boss Jim Mackey revealed as he commended the “fantastic effort” across the system that resulted in a major deficit reduction.

Speaking during the first day of NHS Confed17, Mackey confirmed estimates from NHS Providers that suggested the deficit for 2016-17 would stand between £700m and £750m. The provider system actually ended the year with a £735m pre-audit deficit, but this rose to £791m after two providers chose to defer two transactions into this financial year.

He hailed the result as a “fantastic achievement given where people were at the end of Q3”, and especially following the whopping year-end deficit of £2.45bn in 2015-16.  

“Providers delivered a cost reduction that in virtually every system in the world is impossible,” Mackey told delegates. “I don’t think anyone could reasonably expect any system to deliver this level of efficiency for so long, but you’ve managed to do it.

“Sadly, we have to do it again – 91% of providers earned sustainability and transformation funding during the year, and 74% of providers managed to hit or exceed their control total.”

NHS Providers boss Chris Hopson agreed that the figure was a “genuine improvement and a notable achievement” when viewed in context of the “enormous financial pressures trusts face, but also the solid progress that has been made in controlling the runaway deficits of the last three years”.

“While a year-end figure of -£791m exceeds the -£580m target set by national bodies, it is substantially better than the £2.45bn deficit in 2015-16, and is a significant improvement on the third quarter forecast issued in February, which stood at -£886m,” Hopson added.

“This reflects a huge amount of hard work to control costs, increase productivity and improve efficiency whilst continuing to provide outstanding patient care with record levels of demand. The £700m of savings in agency staff costs is particularly notable, and is a credit to the great progress trusts have made in addressing this priority.”

As a result of these efficiencies, Mackey told the audience that NHSI “needs to go into a slightly different phase”.

“We can’t lose a grip of the money and performance, but you will see quality hopefully being more centre-stage to our priorities,” he revealed. “Obviously, there will be a lot more joined-up working with NHS England and the CQC. We need to be more pragmatic around transactions, and be clearer about the rules. We also need to be clearer about what support we can offer to systems, recognising that you have to deliver them.”

When asked about funding after his speech during the second day of Confed17, NHS England boss Simon Stevens argued that despite the NHS being the most efficient health service “than in any other industrialised country” and one that needs to be thoroughly resourced, there is still a lot of waste and inefficiencies across services.

“And the issue is that some of that inefficiency and waste is getting harder to get at, because it’s become more profound,” said Stevens. “It’s actually about handoffs between different parts of the organisation, it’s about action that requires different entities in an area to act together rather than individually.

“There are some practical things that maybe we should have done five or 10 years ago and we haven’t. We have to work our way through that, not least because until we’ve got that it’s going to be hard to win a further argument with the public.”