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Has the NHS' financial crisis been caused by reduced funding levels over the last five years or by policies?

As winter approaches, bringing fresh pressures to hospitals and GPs surgeries, doubts are being raised about the NHS' ability to survive at present funding levels.

Hospital Trusts are facing large deficits and some Clinical Commissioning Groups are not going to make their end of year targets.  Now the Department of Health is asking how much capital spending could be delayed till 2016-17.   A raid on capital budgets shows how serious this crisis is getting.

In October the King's Fund issued a stark judgment on the government's funding of the NHS:  the decade to 2020 could see the longest reduction in the share of the economy devoted to health care in Britain for seventy years.

The King's Fund analysis was clear: "The 10 years up to 2020-21 are likely to see the largest sustained fall in NHS spending as a share of GDP in any period since 1951."

At the last two elections the Conservative Party promised to raise the annual grant to the NHS by more than inflation.  And during the coalition government they kept their promise - just.  However, a plus-or-minus one per cent increase over general inflation flew in the face of 'health service inflation' of four per cent or more - depending where you are in England.

The reasons for this higher level of NHS inflation are many: the growing population, raised expectations of care, new treatments, increasing numbers of the old and frail, more people with long-term illnesses, more complex procedures, more expensive drugs...

Earlier the independent Health Foundation had raised very similar concerns.  They showed that this decade will see - even with all the promised £8 billion increase in NHS funding by 2020 - the lowest real-term growth in funding since the NHS was established in 1948.

And it may get lower still as the extra £8 billion was promised only if the NHS delivered £23 billion in savings.  No one believes those savings are achievable and as yet there is absolutely no whisper as to when the £8 billion will appear.

So what does our Member of Parliament mean when she writes cheerily in the local newspaper:  "...this government has guaranteed record funding for our precious NHS, paid for by a strong economy..."

It's a record all right - but the wrong sort of record.   Even Health Secretary Jeremy Hunt told the Health Select Committee of the House of Commons last month that the financial pressures on the NHS are "...the worst they've ever been in its history."

It is a clear fact that as cuts to local authorities' budgets hit social care, huge sums of money from the NHS budget were diverted to social care: this is called the Better Care Fund.  This policy was supposed to help save the NHS money as the old and frail were kept out of expensive hospital beds and cared for more economically in or close to their homes - community care.

The headline from Healthwatch Wiltshire's report on patients' experience of Better Care Fund treatment is very positive: "The good news is that we found that the majority of the people we spoke to (77 per cent) said that they were ‘extremely likely’ or ‘likely’ to recommend the care that they received to friends or family if they needed the same care."

While it is indisputable that many older people in Wiltshire are welcoming this care, the Better Care Fund is not yet having the beneficial impact on NHS budgets that it was supposed to have.  

At the latest meeting of the Wiltshire Clinical Commissioning Group's governing board, reports found much to cheer about as the Better Care Fund started to provide better care out of hospital.   

For example a four per cent reduction has been achieved in emergency admissions of patients aged over 65.  Another example was the costly Urgent Care at Home programme which "...continues to receive a high level of referrals over a seven day period with high confidence that admissions are being avoided."  And delayed transfers of care of those ready to leave hospital are down.

This is real progress under the Better Care Fund flag.  But it is not yet the required transformation in care.  It is progress in services provided through the CCG and the Council that has been bought, it must be noted, with extra funding.

There is a slight fog around these results as, before the Better Care Fund was thought of, the CCG got there first with their own plans to bring care closer to home - based in the community rather than in hospitals.

However, the CCG's board meeting was also presented with a great splash of red against all the Better Care Fund projects in the list of financial savings the CCG must make.  The Director was reported as being only 30 per cent confident that the CCG would deliver 2015-2016's savings: a sum set at £2,785,000 or a reduction of 978 hospital admissions.

Is this all about the Better Care Fund 'bedding in', 'ironing out the creases', learning as they go along, having a cumulative impact - and so on?  Or is there a fundamental flaw in the theory behind the Better Care Fund?

If you keep the old and frail away from hospital treatment, are you just patching them up for the time being?  Does this mean that when they eventually do have to go into hospital they need longer and more complex (i.e. more expensive) treatment?  Will there always be a cohort of these elderly patients who do need this sort of costly hospital treatment?  

CCG data definitely demonstrates that those being admitted to hospital now are more in need of complex - more expensive - treatment.  But it also shows that people are able to stay longer in their homes rather than be admitted to hospital early and have all the problems of leaving hospital again.  Do the costs involved in this 'equation' balance out?

Some will argue that the real problem is that funding for social care has been stripped to the bone - and the NHS budget is, in one way or another, having to pick up the pieces - and the bills. 

There have been reports that the government wants to continue with the Better Care Fund - although NHS England want its funding frozen at this year's level for 2016-17.  They must hope that in the longer term its impact will be beneficial not just for patients, but for the NHS as a whole.  

Even before the General Election, Jeremy Hunt was telling the Health Service Journal that some of the promised £8 billion extra over the next Parliament would be paid out via an 'accelerated and extended' Better Care Fund to help cash strapped social services.    And now we hear that social care organisations are lobbying hard to receive a cut of that £8 billion.

While the Better Care Fund carries on - having many positive effects - front line services in the NHS as a whole threaten to become 'worse care',  'under-funded care' and in some cases 'unsafe care'.

There are other health service records being broken: our politicians have to remember that we now spend a lower share of the country's Gross Domestic Product on health than Greece or Portugal.  Britain's figure - according the Organisation for Economic Co-operation and Development - is similar to those for Finland and Italy, but well below that for Germany and France.

The government seems intent on chipping away at the money the NHS spends on front-line services.  Many of the much trumpeted savings on 'bureaucracy' and managers, have been lost to hugely increased costs of open procurement processes, consultants and legal advice.

You can follow the only too logical steps from the government's imposed cap on public pay - leading to some nurses leaving the NHS because their pay has fallen so far behind - leading some of them to work with better pay for agencies - leading to hospitals struggling with inflated agency costs to replace those missing NHS nurses.  
A policy designed so the Chancellor can point to the money saved by the pay cap - but politicians seem in denial that it has to be spent elsewhere.

Another sleight of hand raid on front line NHS budgets - from the biggest trust hospital, through the average GPs' practice, to your neighbourhood care home - is coming with the Care Quality Commission's charges.  Not many people know that the CQC charge fees to all health care providers they inspect.

To cut government spending, the Treasury is making the CQC recover all its costs from its regulation fees.  So the CQC just puts its charges up again (after last year's nine per cent rise.)

Some providers could see their CQC fees rise by 300 per cent. And care home fees would rise by 23 per cent a year.  The CQC may stagger these increases over two or four years.  But the raid on frontline care costs will still cause cuts in services, in staff or perhaps in building maintenance.  Robbing Peter to pay George...?
Is there another slice about to be taken off NHS funds?  The Local Government Association wants to get its hands on more NHS money. It wants some of the money already paid to CCGs to cope with winter pressures.  

Across Engloand, the attempt to integrate social and health care in the shape of co-operation between local authorities and CCGs has produced an absurd free-for-all tug- of-war over bits of the NHS's supposedly ring-fenced budget.

Which brings us to the cuts to the public health budget.   It has now been separated from the NHS budget (protected from cuts) and so it can now be cut by the Chancellor with apparent impunity.  

It is estimated the £200 million cut to public health spending in the current year will have consequential costs for the NHS of £1 billion over this parliament as more people fall sick - more will smoke, more will become obese, skip vaccinations and so on. Where’s the saving?  

And as we are looking at records, this cut in public health funding certainly counts as one: It is the first time in its history that the public health budget has been cut.  


Politicians cannot pretend to have been caught out by this NHS crisis.  Last December the independent King's Fund forecast the NHS would spend the next five years lurching from crisis to crisis - only this time each year will be worse than the last.  

And exactly a year ago the Commons' public accounts committee discovered figures showing that NHS bodies ended 2013-2014 with a combined surplus of £722 million - one third of the £2.1 billion recorded in the previous twelve months.  

The time for tweaking at the edges must be over.  One suspects that on November 25 finance directors in every corner of the NHS will watch the television broadcast of the Chancellor's spending review from behind their sofas.

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