15 December 2010
Primary care trusts in England are to be given a 2.2% rise next year – lower than the Department of Health’s inflation estimate – in a settlement that has been described as ‘enormously challenging’.
The DoH released its PCT allocations for 2011/12 this morning. The figures show that the total spent by trusts is to increase by £2.57bn to £89.09bn – but this includes £650m allocated to support joint working between PCTs and councils on social care.
When that sum is removed, along with other one-off grants, the data reveals that PCTs in 2011/12 will get a 2.2% funding rise on average. The figure is lower than the department’s 2.5% inflation estimate for next year, published today in the NHS operating framework.
The operating framework also sets out a requirement that PCTs invest 2% of their budgets ‘in order to create financial flexibility and headroom for change’.
David Stout, director of the NHS Confederation’s PCT Network, told Public Finance: ‘My guess is this is slightly lower than inflation. There will be a lot of demands – pay and price inflation will eradicate most of it.’
He added: ‘It’s good to see that growth in NHS allocations is coming down to PCT level,’ but warned that the settlement is ‘basically flat in real terms’.
‘It will probably turn out to be marginally below a real-terms increase.’
Meanwhile, the requirement for the NHS to find efficiency savings worth £15bn–£20bn in four years still stands. Stout said: ‘The health service needs to be 4% more efficient year on year for the next four years – that’s enormously challenging.
‘If you’ve got flat real cash the only way to do that is generate that efficiency out of the system.’
A report from the Commons health select committee warned yesterday that savings of that order were ‘unprecedented’.
The data was published as Health Secretary Andrew Lansley announced that he would press ahead with his plans to abolish PCTs and replace them with GP-led commissioning consortiums. Responding to consultation on July’s health white paper, he said that when GPs take control of NHS commissioning in April 2013, the consortiums would not inherit PCTs’ ‘legacy debt’.
However, it appears that consortiums will be liable for new debts incurred by PCTs over the next two financial years.
PCTs will be arranged into regional clusters in 2011/12 and 2012/13, and expected to tightly manage their finances to ensure ‘all existing legacy issues are dealt with’.
If they do not, it is not clear who will take responsibility for any outstanding debt.
