News

Trusts and CCGs face financial ‘special measures’ for missing targets

An onslaught of measures to heal the troubled financial state of the NHS and improve accountability of trusts and CCGs have been announced today, just two days after a Health Committee report warned that the health service is not on track to deliver the expected £22bn in savings.

Under the new measures, developed with support from the Department of Health and the CQC – which had already been looking into adding a financial element to its ‘well led’ rating – NHS England and NHS Improvement have agreed ‘financial control totals’ with individual trusts and CCGs, which represent a minimum level of financial performance that their boards will be held accountable for delivering.

The national bodies announced they are allocating an extra £1.8bn to trusts with the aim of cutting the combined provider deficit to around £250m in 2016-17 – but access to the bailout fund will partly depend on providers meeting these agreed control totals and spending limits. Providers must also meet individually-agreed performance trajectories published today for A&E, referral to treatment and cancer waiting times, as recently predicted in a King's Fund report.

Furthermore, the bodies will replace national fines with trust-specific improvement incentives in order to allow A&E and elective services to recover from extensive performance problems.

Simon Stevens, chief executive of NHS England, said: “Precisely because the pressures across the NHS are real and growing, we need to use this year both to stabilise finances and kick-start the wider changes everyone can see are needed.

“Most trusts and CCGs know what needs to get done to release funds for local reinvestment in better patient care and now is clearly the time to fire the starting gun.”

NHS Improvement and NHS England have also set new controls to cap the cost of interim managers in CCGs and CSUs, and to fast track savings from back-office, pathology and temporary staffing for providers.

Financial special measures

They have announced a two-year NHS planning and contracting round for 2017-19, to be completed by December 2016, and linked to the sustainability and transformation plans which are currently being refined with the help of national leaders, including Stevens and Jim Mackey.

A new intervention regime of special measures has been introduced which can be applied to trusts and CCGs who are failing to meet their financial commitments.

The first five providers to enter financial special measures are Barts Health NHS Trust, Croydon Health Services NHS Trust, Maidstone and Tunbridge Wells NHS Trust, Norfolk and Norwich University Hospitals NHS Foundation Trust, and North Bristol NHS Trust.

Glenn Douglas, chief executive of Maidstone and Tunbridge Wells trust, said: “We have a long and strong track record of making financial efficiencies and improving patient care. I am confident we can use this opportunity positively to renew and strengthen our focus on more closely providing our high quality services within our financial means.”

Action for 26 CCGs rated ‘inadequate’

The 2015-16 ratings for all CCGs in the country were also published today, with 10 rated ‘outstanding’, 82 rated ‘good’, 91 rated ‘requires improvement’ and 26 rated ‘inadequate’.

NHS England will take action with all the CCGs found to be inadequate.

The ones that will now be placed in special measures include:

• Coventry and Rugby CCG
• Croydon CCG
• East Surrey CCG
• Enfield CCG
• North Somerset CCG
• North Tyneside CCG
• South Gloucestershire CCG
• Vale of York CCG
• Walsall CCG

Julie Wood, chief executive of NHS Clinical Commissioners, also said: “The simple truth is there is no spare money in the system – we urgently need a cross-governmental review into the overall financial position of the NHS and an open debate about what can be realistically delivered with the current level of funding.”

Warning of ‘loading up providers’ with targets from NHS Providers

Saffron Cordery, director of policy at NHS Providers, said that although the announcement was “a welcome recognition” of the financial pressures facing the NHS, action to balance the finances of individual trusts may not be sufficient.

She said: “The difficulty that the Department of Health has had in trying to balance its budget has not come without a cost, for example cutting down on much needed capital investment. The wafer-thin margin also demonstrates the fragility of the system and proves just how precarious NHS finances actually are.

“It’s becoming increasingly clear that the financial deficit is the product of a system-wide, structural problem. Restoring financial balance and putting the NHS on a sustainable long-term footing will therefore depend on all parts of the health and social care system coming together to find solutions, with the right central support to do so. Simply loading up providers with savings targets they can’t achieve and exhorting them to try harder won’t work.”

She said that it was important the NHS learned the lessons from imposing financial special measures in the past, which had been “stigmatising” and undermined staff morale.

“Today’s announcement outlines a plan to try and stabilise finances in the immediate term,” Cordery added. “But we need a revised approach to financial planning in the long term and a much smaller set of priorities on which the NHS ruthlessly focuses in the short term, with everything else taking second place. Without these we cannot even begin to tackle the likely consequences of the middle years of this Parliament when available funding reduces dramatically.

“Finally, as The King’s Fund, Health Foundation, Public Accounts Committee and other independent organisations have also argued, we need honesty, realism and an urgent public debate about where we go from here.”

(Image c. Sean Dempsey from PA Images)

Have you got a story to tell? Would you like to become an NHE columnist? If so, click here.