A credibility gap is opening up in the NHS as it tries to cope with major restructuring while finding annual savings of 4%
Unusually, the Department of Health took until November to publish its 2010/11 first quarter report, the delay perhaps symptomatic of post-election dislocation within Whitehall. Although the forecast was positive, with all 152 of the now-doomed English primary care trusts predicting to break even, the cracks are now beginning to show.
Health funding survived the Comprehensive Spending Review intact – that is, until one looks at the detail. It is true that annual real-terms growth of 0.4% is a more attractive settlement than most other departments have had– even if the growth over three years is minuscule, what constitutes ‘real terms’ is questionable, and a cool £400m has been switched to social care. (This item was almost certainly added to the health budget just so the coalition could honour its ‘no NHS cuts’ pledge.)
But there is still a substantial underlying problem. Some 18 months ago, NHS chief executive David Nicholson challenged the health system to produce efficiency gains of £15bn–£20bn to fund the pressures of an ageing population, a growing population, and the cost of scientific and medical advances. Together, these pressures add costs of around 4% per year.
NHS management’s ability to save anything like this has, however, been overturned. In July, Health Secretary Andrew Lansley, despite earlier promises of no more ‘top-down’ reorganisations, announced the abolition of all ten strategic health authorities, all 152 primary care trusts and a swathe of arm’s-length bodies. Commissioning is to become the responsibility of GP-led consortiums. In November, Lansley was pressed in Parliament on whether PCTs were in meltdown.
Meanwhile, hospital trusts are to become the world’s largest social enterprise sector. No-one’s really sure what that means, but it probably doesn’t involve employees staying in the NHS pension scheme for very long. And in November, the first NHS trust – Hinchingbrooke, in Cambridgeshire – transferred to private sector management.
NHS staff feel threatened and anxious. Managers in doomed organisations are polishing their CVs, or waiting for redundancy packages, rather than chasing the Nicholson challenge. And doctors, most of whom never wanted parallel careers as commissioners, grow restive because claims that savings on this scale will not affect frontline care lack credibility.
One crack starting to show takes the form of increasing nervousness about accountability. Just how wise is it to place some £80bn of public money in the hands of non-existent GP consortiums? Another is between traditional GP practices, independent contractors to the NHS since 1948, and much larger corporate entities such as multinational health insurers, consultancies and supermarkets. Sainsbury’s has just announced plans for GP practices in its stores.
The biggest emerging rift, however, is between those who support Lansley’s radical restructuring, and others who see disruption threatening the £20bn savings target. Firing the odd manager pour encourager les autres is one thing but losing so many managers, in such a hurry, is beginning to look a curious strategy.
Noel Plumridge is a former NHS finance director
