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STP efficiency savings targets ‘unrealistic’, CHPI warns

The government’s plans to close the NHS’s £30bn funding gap is “unrealistic,” and could lead to a further decline in care quality, a new report has found.

In 2015, the conservative government announced a real-terms increase in NHS funding for England with an additional £2bn in 2010-16 – rising to £8bn a year by 2020-21.

This left the NHS to close the remaining gap in funding through finding savings of 2-3% net efficiency gains per year through the 44 STP plans.

But research conducted by the Centre for Health and the Public Interest (CHPI) found that financial assumptions set out by the government are unrealistic and unlikely to be met by NHS bosses.

CHPI looked into seven key assumptions and found that STP saving targets set out by the government were difficult to achieve.

Of the £2.1bn put aside for this year’s up-front funding to transform services, £1.8bn has already been spent on reducing hospital deficits – leaving only £300m for the NHS to invest in achieving efficiency targets. 

And last year, hospitals could only hit recurrent cost savings of 2.8%, despite average targets being set at 4% and 4.2% for this year and next year.

On top of that, the 1% pay cap that Labour leader Jeremy Corbyn last month pledged to scrap was found to be hard to maintain with average earnings expected to grow by 2.9% a year and inflation at 1.9%.

Ongoing issues with social care also make efficiency savings harder to deliver – as the sector faces a £3.5bn funding shortfall by 2020-21, and a lack of services will mean longer stays in hospital for older people and higher costs for NHS trusts.

“With the NHS under unprecedented financial pressure and the government reaffirming that there will be no new money for the NHS after the election, it is time to take a closer look at how the NHS has been asked to plug the now infamous £30bn funding gap,” said Vivek Kotecha, the report author and CHPI research officer.

He also warned that the findings in the report show that efficiency savings are not achievable and the NHS funding gap will not be closed as planned.

“Unless additional funds are made available local NHS organisations will be forced to take more drastic measures to reduce costs. Rationing non-emergency care, the withdrawal of services, and/or reducing cost by reducing quality will be the only options,” he added.

Kotecha also warned that commissioners will be forced to reduce the number of non-emergency operations, and limit the kinds of patients who have access to operations they will fund.

“Instead of the intended improvement in care there will be a decline in quality and access, and there is a risk that over the coming years the NHS will degrade into two services,” Kotecha continued, “a more or less adequately funded urgent and emergency health service, and an underprovided and oversubscribed non-emergency service”.

The CHPI researcher concluded that with public concern about the NHS high and staff morale crumbling, now is the time to put in place measures in case STP plans fail to yield efficiency savings.

“The government needs to make clear what they are going to do if the STPs are unable to meet their target efficiency savings or patients will face longer waits for care, with some services at risk of being lost altogether,” he stated.

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