NHS ‘needs transformation fund in addition to £8bn spending pledge’

22 Jul 15

The NHS in England needs a ringfenced transformation fund, separate from the £8bn increase already planned by government, to support the essential transformation of services as part of the Five Year Forward View, two think-tanks have said.

The Health Foundation and The King’s Fund said that the creation of a dedicated “transformation fund” of between £1.5bn to £2.1bn was also needed to unlock the efficiency savings required in the NHS Five Year Forward View by 2020.

Without the funding for essential service redesign, there is a risk that there will be a decline in quality or a reduction to services currently available, even after the £8bn funding pledge confirmed by Chancellor George Osborne in the summer Budget.

The Making change possible: a transformation fund for the NHS report said that bringing together some existing funding strands could help create the fund, but additional resources would also be needed above the £8bn increase in NHS funding already announced by the government.

According to the report the fund would deal with the current urgent need for service change and enable the shift to new models of care that has been set out in the forward view,. 

Anita Charlesworth, chief economist at the Health Foundation, said “While we recognise that it is challenging to provide additional funding for the NHS in the context of other services receiving cuts, the alternative is to risk a decline in quality and safety in NHS-funded care and a reduction to the services currently available.

“Without more resources specifically for transformation, the NHS will be unable to become more productive and the bill for additional running costs will only get larger.”

Richard Murray, director of policy at The King’s Fund, added the fundamental task was to get the NHS workforce of more than one million people to work differently. This it could not be done within the existing resources and that dedicated funding is required to deliver the changes needed, Murray stated.

Responding to the report, the NHS Confederation backed the call for a transformation fund.

Policy director Johnny Marshall said: “Our members firmly believe transformation funding will need to be clear and spent in an accountable way to ensure the money set aside really does transform services, rather than being spent on business as usual.

“This report includes examples of where transformation funding has been successfully implemented and so offers a robust evidence base to work from.”

Paul Briddock, director of policy at the Healthcare Financial Management Association said it was important to debate how the NHS could be made more sustainable.

“However, with the substantial £22bn gap in NHS finances, the clock is ticking for the sector to soon agree on an effective way forward, which is likely to see initial investment required before long-term savings are seen,” he added.

Responding to the report, a Department of Health spokesman said; "The government is investing the additional £8bn the NHS has said it needs to implement its own plan for the future and the NHS must deliver its side of the deal by delivering £22bn worth of efficiency savings and putting in place the sort of cost-control measures that we’ve highlighted over the last few weeks, like clamping down on rip off staffing agencies and expensive management consultants.”

  • Judith Ugwumadu

    Judith Ugwumadu joined Public Finance International and Public Finance online as a reporter after stints at Financial Adviser, Global Security Finance and The Sunday Express. Currently, she writes about public finance, public services and economics.

    Follow her on @JudithUgwumadu_

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