The NHS in crisis: how some government funding goes straight back to the Treasury - not to frontline NHS services
While the board meeting (March 22) of Wiltshire Clinical Commissioning Group (CCG) was discussing the Finance Director's dire warnings about their funding for 2016-2017 - and the risks that funding involved, an emergency message came from Salisbury Hospital.
The hospital was on 'black alert' with sixty beds closed due to an outbreak of diarrhoea and vomiting - and they were being 'swamped' with young patients. The sort of crisis that can put a stretched NHS budget into its own state of 'black alert'.
Simon Truelove, the CCG's Finance Director, pulled no punches when he introduced the board to their budget for the next financial year: "We face more risks next year than we have this year."
He wants a proper and national debate about what the NHS can afford to do: "Demand is hitting the hospitals and they have little option but to continue treating - key providers are paid for what they do - the more they do the more they are paid. Also we have a lot of independent [private] providers - they continue to grow and grow. We are over-trading - we are doing too much."
Part of the problem is that the government has made it look as though it is being very generous to the NHS. When Wiltshire's funding for 2016-2017 was announced Simon Truelove found the CCG had a good settlement: "We were getting about £21m more than we were expecting. Great news in view of what we had planned to do."
But it was not to be: "They are giving with one hand and taking back with the other."
And he explained how the £3.8bn promised for 2016-2017 by the Chancellor of the Exchequer (of which the £33m was Wiltshire's share) had been reduced.
For instance, one billion pounds of it goes straight back to the Treasury as increased pension provision. There is mandatory spending on mental health and during the coming financial year the CCG has to pay the acute hospitals more for each patient admitted. And so on.
Wiltshire CCG is left with a gap in funding for the coming financial year of just under £13m. This will have to be filled by savings under a new Quality, Innovation, Productivity and Prevention (QIPP) programme.
These are known as 'Quip savings' - and as, I have written before, they are anything but amusing. Peter Lucas, one of the CCG's two non-executive or lay directors - an independent voice on the board - was pretty gloomy as to whether the CCG would achieve the necessary QIPP savings:
"Over the years, the CCG's performances on QIPP have not been brilliant. The demands in the future are great. The CCG has not got a good track record on delivering QIPP. This is sombre stuff - it will be extremely tight."
The necessary QIPP savings will include reducing activity at the three acute hospitals (GWH, Salisbury and RUH Bath) and the independent hospitals by:
• 613 first outpatient appointments
• 792 emergency admissions
• 7,700 follow-up appointments
• 890 'elective spells' (hip, knee replacements & similar non-emergency operations)
They will also include rationalising prescriptions and reducing bureaucracy. So it seems the Lansley reorganisation's aim of eliminating bureaucracy has not yet been achieved.
Now, in similar terms to the recent ructions over cuts to disability benefits, that is a set of numbers: but we are, of course, talking about people and the treatments they expect their NHS to be able to provide for them. You do not achieve those figures just by closing doors, closing beds, closing wards or firing consultants.
People's expectations have to be managed, which in more practical, everyday terms means people have to be made to realise that their own expectations of what the NHS can do for them have to be reduced.
What is more, this time round, politicians will not be able to escape the consequences of this financial settlement as it hits their own constituencies. Rather than joining protests against closures and reductions of service, they will have to start explaining the finances and providing incentives for people to take responsibility for their own health.
No sugar tax will work if it is the only policy on offer - people have to be persuaded how they can be healthy.
As the CCG's chief officer, Deborah Fielding, told the board: "This is not a happy story." And it has not yet reached its last page: still to come is the chapter on the surplus each CCG is required to keep back each year. This used to be returned to them in the following year's funding.
This year the CCG had its own financial crisis as its required surplus - of £5.5m - disappeared with increased spending on services. During the year it found it could only reach a £720,000 surplus.
This was reported to NHS England which put the CCG 'on the naughty step' and made them put into action a Financial Recovery Plan. This has had positive results and they are now returning a surplus for this year (2016-2017) of £3.3m - a shortfall of £2.2m.
But the Treasury has another little trick up its sleeve: next year the CCG's reserves cannot be touched without its explicit permission. And the Treasury will use them to cover deficits elsewhere in the NHS. So Wiltshire CCG money could be used to prop up the finances of an acute hospital or a treatment provider anywhere in England - taking money out of Wiltshire.
The risks to the CCG of not filling that funding gap in 2016-2017 are considerable and they are taking measures "...to ensure financial delivery." But before the Board accepted the budget for the coming year, they added a rider: "...recent amendments to 2016-2017 make the CCG's ability to deliver its financial targets unlikely."