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HSJ Live: 05.12.13 Decade of NHS austerity

Source: HSJ
5.27pm The Health Foundation has described the length of the funding freeze on the NHS as “unprecedented”.
Chief executive Dr Jennifer Dixon said: “It’s good to see that the NHS budget is protected but a freeze in real terms growth is very tough particularly given rising demands and expectations on the service, not least going into winter. A&E care is clearly under pressure. Of course more efficiency can be achieved, but the length of funding freeze across the NHS in England over the short to medium term is unprecedented in the NHS’s history and is unusual by OECD standards.”
4.41pm The Royal College of Nursing has reacted to the increase in the state pension age. Dr Peter Carter chief executive and general secretary said: “Following the uncertainty caused by recent changes to NHS pensions, in particular linking the occupational pension to the state pension age, this announcement will do nothing to reassure nurses that they can plan and save for their retirement with any certainty.
“It is also not credible that the government has any evidence that nurses and other health care staff will be able to deliver the level of service that they do now when they are 68. There should be a great deal of caution before any further rises to the retirement age of health care workers are considered, due to the unique nature and demands of this job and the implications that such a rise could have on patient care.”
4.23pm Responding to the autumn statement Anita Charlesworth chief economist at the Nuffield Trust, said:
“Today’s announcement that public spending as a whole will only grow in line with inflation in 2018-19 confirms that the unprecedented squeeze on NHS budgets is likely to continue over the next Parliament. Although the health service faces upward cost pressures of around four per cent each year, this tight fiscal picture and the deep cuts seen by other departments make it likely that NHS funding will not increase over this period. We have estimated that this will lead to a further funding gap of around £30 billion by 2021-22.
“Importantly, the Government today committed to looking at further public sector pay restraint after 2015-16. This echoes the hospital finance watchdog Monitor, which has said that further pay restraint will be needed to close the funding gap. Yet although pay restraint has been crucial in the NHS meeting its financial targets so far, it will become very difficult to continue if the health service has to compete for talent with the private sector in a full economic recovery.
“Continuing to deliver an annual four per cent saving through 2019 will be challenging for every part of the NHS and will probably not be possible. Productivity growth has never reached this level, and our research shows no sign of a step-change since the beginning of austerity. We have already warned that hospital finances are showing serious signs of strain, and policymakers need to be ready for the possibility of a large number of NHS trusts entering real financial difficulties. Monitor could find potential productivity gains of a maximum of £18 billion compared with NHS England’s estimate of a £30 billion funding gap which is in line with our own.
“Closing the funding gap will also require delivering so far elusive savings from providing better joined-up care, and helping people to stay out of hospital. It is right that the Government should take this seriously. However, the Integration Transformation Fund in 2015-16 is likely to result in an especially tight year for NHS finances, as a further £1.9 billion is ring-fenced from NHS budgets to maintain social care services for the elderly and to integrate care.”
3.59pm Here’s an interesting blog post from the MBI Health Group on why the healthcare sector may need the Office of Fair Trading in the future and the difference between size and scale.
3.51pm HSJ reporter Will Hazell is tweeting from the Improving Patient Care conference where Shadow Health Minister Jamie Reed is currently speaking. Follow Will on @whazell
3.07pm The chancellor today used his Autumn Statement to warn of public sector pay restraint beyond 2015.
The full statement, published shortly after George Osborne spoke in the Commons, said the Treasury would explore how “to get the best value for money from the pay bill” and “continuing reform of public sector pay policy can best contribute to consolidation [of the economy] beyond 2015-16”.
The document pointed to the fact the public sector pay bill still accounts for about half of department budgets. It added: “This government has introduced public sector pay restraint up until 2015-16, which has played an important role in consolidation.
3.05pm NHS Employers welcome the news that the health budget is protected from further cuts but said that the budget “continues to present an enormous efficiency challenge for the NHS”.
Chief Executive, Dean Royles, added: “I’m keen to understand the potential implications for the Government’s plan to pilot ‘pay bill control’ in a small number of government organisations, which will involve setting a new financial control to keep the organisation’s pay bill within a pre-determined budget agreed with the Treasury. This new control will replace the one per cent cap on pay awards for the organisations involved in the pilot. What we really need now is to agree how we can move out of a period of pay restraint in a sensible way.
“The continued funding settlement means an even greater imperative to conclude negotiations with consultants to help change the way we deliver services.”
3.01pm The BMA has given its response to the autumn statement. Chair, Dr Mark Porter, questioned the safety of NHS finances when “billions of pounds are going back to the Treasury each year”. He said: “Doctors and other frontline NHS staff are working harder than ever before, doing more with less against a backdrop of rising demand, fewer resources and real term cuts to pay.
“While the government claims the health budget is protected, in reality billions of pounds are going back to the Treasury each year and the NHS is also having to make £20billion in efficiency savings, the bulk of which is coming from the continued erosion of staff pay.
“This is simply unsustainable. If the government doesn’t work with staff and other stakeholders to find innovative ways of delivering a cost effective health service then frontline services will be hit and, ultimately, the quality of patient care will be compromised.
“The combination of an overstretched workforce, a fall in real terms pay and the fact the government keeps moving the goalposts on pensions meaning doctors face working until they’re 70, has left morale in the NHS at an all time low.
“It’s therefore unsurprising there have been increasing reports of doctors and other healthcare workers choosing to leave the NHS and work abroad. We’re already seeing the impact of staff shortages in emergency departments.
“The backbone of the NHS is its staff, yet those on the frontline are bearing the brunt of cuts. The NHS cannot continue to meet rising demand with reduced investment without the system unravelling at the seams.”
2.55pm The Independent reports that a three-year-old, whose father tried to prevent him having life-saving treatment, will receive a bone marrow transplant today following a High Court ruling.
The boy’s father is living in an unspecified Arab country where there are no facilities for bone marrow transplants and the hospital’s lawyers said transporting the child could kill him.
2.37pm Outside of Whitehall, The Telegraph reports that scientists are hoping to have made a breakthrough in dementia treatment in five years, with a monthly injection that delays the onset of the disease.
If further trials of the injection are successful then people with a family history of dementia could receive the monthly injection a decade before any symptoms start to show.
1.49pm Unison has branded the raising of the state pension age as “cruel and unnecessary”. General secretary Dave Prentis said “for millions, they will never see their pension because they will die before that age [70]”.
He added: “But does anyone seriously expect a 70-year-old paramedic or nurse attending them in a medical emergency. And should we expect people who sweep our streets, clean our hospitals and schools to carry on doing those jobs?
“The Chancellor can produce this mirage of an economic recovery and massage the figures as much as he wants, but it doesn’t mask what is being felt in the real world. Prices have risen faster than wages for 40 out of the 41 months in the past years…There has been a massive explosion in the number of people forced to work part-time, on zero hours’ contracts and stuck on low pay.
“The fact is the Chancellor is rushing into saving money for today’s Government, but putting future generations at risk. Not all actuaries agree that we are all living longer so there should be a proper, evidence-based enquiry before any rash decisions are made. What about the quality of people’s life in retirement as well as the quantity?”
1.44pm So far there hasn’t been a huge response to the autumn statement, but here’s the Royal College of GP’s input.
Dr Maureen Baker, Chair of the Royal College of General Practitioners (RCGP), said: “After revealing a £7bn underspend across all government departments it’s deeply disappointing that the Chancellor has missed an opportunity to address the funding crisis in general practice.
“NHS funding was completely overlooked and family doctors are gravely concerned that patient care is being compromised by declining resources. GPs carry out 90 per cent of the contacts in the NHS for just 8.39 per cent of the NHS budget. This is a decrease of one fifth since 2005. We are trying to manage greater demands on our time as an ageing and growing population seek care for increasingly complex, multiple and long-term conditions – this is not sustainable on a dwindling budget.
“The Government needs to invest in general practice as a matter of urgency, so that we can take the pressure off our hospitals, where medical provision is more expensive, and ensure that more people can receive care where they say they want it – in the community.”
1.24pm Both health and local government were protected from further cuts by George Osborne. However, councils are still feeling the pinch.
Joanna Killian, Chair of the Society of Local Authority Chief Executives and Senior Managers, has spoken of a “formidable” financial challenge across public services.
“Public spending, as a proportion of GDP, is heading back to 1948 levels. Local government’s core funding will fall by 43 per cent during the current Parliament, and the trend will continue well into the next. Councils have led the way on deficit reduction but with demand increasing fragility is beginning to show.
“Such a challenge needs to be met head on and with a long term plan of public service reform, not just one reacting to cyclical deficits. It should be based upon three principles: integration; innovation and technology; and a new relationship between citizen and state.”
She added: “Most importantly, far more needs to be done to create a transformational long term plan, one that improves accountability and delivers the systems reform needed to embed it.”
12.59pm The Treasury has signed off NHS England’s £260m technology fund, the body’s technology chief has announced.
NHS England director of strategic systems and technology Beverley Bryant revealed via Twitter chancellor George Osborne had rubber-stamped the spending.
HSJ has asked NHS England for further details about which organisations have been awarded funding.
12.54pm The failure regime is no guarantee of success according to HSJ’s finance reporter Crispin Dowler who has spoken to commissioners and leaders of several NHS providers who are facing money issues.
12.52pm A High Court judge has granted a last minute injunction to stop former Mid Staffordshire Foundation Trust chief nurse Jan Harry from leaving the Nursing and Midwifery Council register.
Ms Harry’s registration with the NMC was due to lapse today after she decided not to pay the annual registration fee, meaning she would be removed from the register and further disciplinary action could not be taken.
To prevent her from removing herself from the register the Professional Standards Authority today asked the High Court to impose an interim suspension order against her as an emergency injunction.
12.46pm Key lines from chancellor’s autumn statement this morning:

  • The NHS budget will not be cut in 2014-15 or 2015-16
  • Council budgets will also be protected to pay for tax freeze
  • Hints of more public sector pay restraint beyond 2015-16
  • Local service reform to be supported by “enduring” pooled funding

12.35pm Some vague, but vaguely interesting, lines on social care [our italics]:

  • Local service reform – the government will support local areas that want to deliver services differently if they can show it will save money, including by:
  • allowing local authorities some flexibility to spend their receipts from new asset sales on the one-off costs of service reforms, following a recent consultation. Total spending of £200 million will be permitted across 2015-16 and 2016-17 and local authorities will be able to bid for a share of this flexibility.
  • welcoming service reform proposals made by local enterprise partnerships (LEPs) as part of the Growth Deals process
  • making sure pooled funding is an enduring part of the framework for the health and social care system beyond 2015-16
  • working with departments to give local public services the same long-term indicative budgets as departments from the next Spending Review.

12.28pm HSJ’s workforce reporter Shaun Lintern has been combing the autumn statement for any mention of public sector pensions. Nothing is leaping outl so far.
12.22pm There’s more on public sector pay control.
“From 2014, the government will pilot a “pay bill control” in a small number of government organisations. Pay bill control will involve setting a new financial control to keep the organisation’s pay bill within a pre-determined budget agreed with the Treasury. This new control will replace the 1 per cent cap on pay awards for the organisations involved in the pilot.
“The Treasury will consider how continuing reform of public sector pay policy can best contribute to consolidation beyond 2015-16, including how to get the best value for money from the pay bill.”
12.20pm Here’s something on pay:
“The public sector pay bill accounts for around half of departmental resource budgets. This government has introduced public sector pay restraint up until 2015-16, which has played an important role in consolidation. However, the next government will need to continue to reform and take tough decisions on public sector pay and workforce beyond 2015-16.
Therefore, HM Treasury will consider how continuing reform of public sector pay policy can best contribute to consolidation beyond 2015-16, including how to get the best value for money from the pay bill [our italics].
Our workforce reporter Shaun Lintern tweets: “#AutumnStatement documents hint at more public sector pay reform beyond 2015 “to get the best value for money from the pay bill.” No detail”.
12.16pm Here’s a passage on how councils and the NHS won’t be affected by a wider requirement to cut departmental budgets.
“To lock in lower levels of spending, autumn statement 2013 announces a reduction in unprotected Resource Departmental Expenditure Limit (RDEL) budgets of £1.1 billion in 2014-15 and £1 billion in 2015-16.
“This represents a reduction of 1.1 per cent. Health, schools and Official Development Assistance (ODA) budgets will continue to be protected in line with the policy set out at Spending Round 2013.
“Local government is excluded from this reduction, to help local authorities to freeze council tax in 2014-15 and 2015-16.”
12.12pm Full coverage on what all this means for the NHS will follow during the day.
In the meantime, a quick search through the autumn statement document confirms that there will be zero reduction to the “NHS (Health)” budget in 2014-15 and 2015-16.
12.06pm Osborne winds up: “The plan is working… the job is not done… let us keep going.” And he’s done.
12.02pm 45 minutes in. Osborne is on to fuel duty. Slim pickings for NHS fans so far, if we’re honest.
11.56am Osborne announces “A new tax relief for investment in social enterprise.” That could benefit social enterprises providing NHS services, and CSUs who choose to constitute themselves that way.
11.55am A tax cuts announcement seems imminent, to help business. NHS commissioning support unit bosses, who will be autonomous by spring 2016, will be listening excitedly.
11.51am A public health announcement (sort of) – free school meals for all children in the first three years of primary school. It was actually announced by Nick Clegg, the deputy prime minister a few weeks ago, but is “backed by me”, says Osborne. It could be argued that the least well off were already getting free school meals, so this only benefits better-off families.
11.50am The chancellor stresses the need to build houses, and announces he will “unblock” developments in northern cities.
11.46am Osborne pledges to increase capital spending and investing in infrastructure. Focus so far has been on energy and transport, though scientific research also got a mention.
11.44am More from our data and technology reporter James Illman on that £260m technology fund.
He says: “The fund, outlined in NHS England’s Safer Hospitals Safer Wards document, has been set up to help trusts at all stages of their clinical digital maturity towards achieving full electronic patient record systems.
“The Safer Hospitals Safer Wards prospectus cited integrated digital care records within and between different organisations, e-prescribing, bed side observations, as focus areas.”
11.41am The Treasury has signed off NHS England’s £260m technology fund, according to a senior NHS England figure.
NHS England’s director of strategic systems and technology Beverley Bryant revealed via Twitter chancellor George Osborne has rubberstamped the spending.
11.39am Protection for the NHS budget “will still apply”, says Osborne. He isn’t 100 per cent clear which year he’s talking about. Assuming it’s 2014-15 and 2015-16, he announced that last summer in the 2015-16 spending round.
11.35am This autumn statement is “fiscally neutral”, Osborne announces. That means any spending hand-outs or tax cuts will be paid for by spending cuts or tax rises.
11.33am Although the cyclical deficit is falling, the structural deficit is not improving any faster than expected. Osborne says this means the government’s economic policy must continue.
11.30am Although the economic news is good, Osborne is making the argument for more austerity. “If we give up on the plan now, we will still be saddled with a deficit that is one of the biggest in Europe,” he said.
11.28am The OBR expects the UK deficit to turn to surplus in 2018-19, Osborne says.
11.26am The chancellor is now onto employment “far from the mass unemployment that was predicted, we now have a record number in work”, he says.
11.25am Osborne is bullish on growth, claiming economic performance will outstrip Office of Budget Responsibility estimates in 2014 and 2015.
11.19am The opening of Osborne’s speech concentrates on how “the government’s economic plan is working”. He argues spending cuts have succeeded in restoring the economy to growth, but more must be done to cut the deficit.
11.16am George Osborne is on his feet in the Commons now.
11.08am The government’s plans to create a national standard for social care eligibility could place unfunded new burdens on councils and lead to an increase in legal challenges, ministers have been warned.
The claim – reported by HSJ’s sister title Local Government Chronicle – came in a response to a consultation on the government’s plans, from the Local Government Association and the Association of Directors of Adult Social Services.
In the document, the organisations voiced support for the notion of a national standard, but added that “anecdotal evidence” suggested the government’s definition of eligibility would be more generous than the standard used by most councils.
11.05am North West London commissioning support unit has been awarded the contract to improve cancer services across the capital. The unit will work with clinical commissioning groups across London and NHS England (London Region) ito make the changes. The transformation of cancer services for London is an agreed strategic priority, with the aim of significantly improving outcomes and experience for patients.
Sarah Whiting, Managing Director of NWLCSU, said: “Bringing together the cancer commissioning teams that are working with clinical commissioning groups and a team from NHS England is a great opportunity to drive greater consistency and deliver high quality services to all Londoners.”
10.59am Our reporter Will Hazell is tweeting from the Improving Patient Care conference today. Follow him on @whazell for updates.
10.52am A lack of support for older people after they have been in hospital leaves them vulnerable to readmission, new research has found.
Almost 150,000 people had no support once they returned home and for those who did get some kind of help, a fifth did not receive essential continuing support.
The research, released by charity Royal Voluntary Service, formerly WRVS, warned that older people can be especially vulnerable and frail following a stint in hospital and it is particularly important that they are supported to manage health conditions and stay independent to prevent readmission.
10.49am The pensions “burden” is “a looming time bomb” according to a Times opinion article.
The increase in life expectancy means that there will be economic strain on the system and the only way to counteract this is to increase pension contributions and for people to work longer, according to The Times.
The paper argues that policymakers should reform the pension system now to maximise a projected spending of £100bn as pension changes take place over the next few years.
10.40am The Telegraph reports that Osborne will resist “big giveaways” in today’s statement and is prepared to make “unpopular decisions”.
The chancellor is expected to slow down green policy targets for energy companies and maintain a fuel duty freeze while cracking down on tax avoidance and welfare spending.
10.34am A merger that would have created the largest provider organisation in England has been shelved.
King’s College Hospital, Guy’s and St Thomas’ and South London and Maudsley foundation trusts were investigating becoming one organisation, along with the university King’s College London.
The process, which had got to the outline business case stage, would have created an organisation with a turnover of £2.3bn and would have run a unique combination of physical and mental health services.
10.28am The Telegraph reports that alcohol-related hospital admissions among those in their 60s have nearly tripled in 10 years.
The new figures come from the Health and Social Care Information Centre, which also show that alcohol admissions for the over 45s have more than doubled. There has also been an increase in the number of women in their twenties admitted for alcohol-related health problems.
10.23am The extent of bullying trainee doctors are being exposed to has been revealed by a survey.
The General Medical Council, which conducted the poll, says the results highlight the need to listen to young doctors, give them more support and foster a more positive culture.
Just over one in eight (13 per cent) of the 54,000 trainee doctors surveyed said they had been victims of bullying or harassment at work and more than a quarter (27 per cent) reported they had been undermined by senior staff.
A fifth of the trainees said they had witnessed a colleague being bullied while one in 20 said they had voiced concern about patient safety last year.
10.18am The Independent reports that the final decision on the state pension age will be informed by future life expectancy figures provided by the Office of National Statistics as well as an independent review.
The state pension age will be reviewed every five years with the first taking place shortly after the 2015 election.
10.08am The Guardian leads on the increase in the state pension age. Osborne’s plan to save £500bn in 50 years will mean that young people entering the workforce now will have a retirement age of 70.
The chancellor will also use the statement today to demand £1bn in spending cuts. The health budget will be protected from further cuts.
9.56am Osborne will announce today that the state pension age will rise faster than previously expected, according to the Financial Times.
This will mean that those in their twenties will have to work longer than their parents’ generation before receiving their pension reward.
However, there are fears that as people work longer and health problems arise accordingly this may mean the government ends up spending more on unemployment and sickness benefits, wiping out the saving on the pensions bill.
9.50am George Osborne will announce a budget surplus today for the first time since 2000 according to the Financial Times.
Although the chancellor will stress that more spending cuts are necessary it is expected that he will also start to pave the way for tax cuts in what he will call “a responsible recovery”.
9.46am There are twice as many hospital deliveries to women living in the most deprived areas of England than the most deprived.
New figures from the Health and Social Care Information Centre show that in the most deprived areas of England deliveries were 37.2 per 1,000 population (95,370 deliveries in total) compared to 18.6 per 1,000 (47,710 deliveries in total) in the least deprived areas.
The figures also show that for 2012-13 there was a national fall in the number of teenage deliveries, with 30,790 teenage deliveries – 8.4 per cent fewer than in 2011-12 where there were 33,620. This is a substantial fall of 27.8 per cent on teenage deliveries in 2007-08 (42,670).
9.32am Clinical commissioning group representatives have called on NHS England to support CCGs taking a greater role in primary care, following their first major survey of the organisations.
NHS clinical commissioners yesterday published the results of its survey of CCG leaders’ on working with NHS England. Overall, they were positive.
However, asked whether NHS England worked effectively with them as commissioner of primary care, 55 per cent disagreed and only 19 per cent agreed.
7:00am: Lord Darzi, Hamlyn Chair of Surgery at Imperial College London, has written a comment piece for HSJ on how to improve the quality of care in a health environment where expenditure growth is slowing.

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