A spending review to back health tech innovation?

Money cash

Chancellor Rishi Sunak will be back at the dispatch box next week to tell public services what they’ll have to spend over the next three years. The NHS already knows its revenue limit; but think-tanks are lobbying hard for a capital settlement. Lyn Whitfield looks at their submissions, in which digital is a key theme.

Rishi Sunak will deliver his comprehensive spending review on 27 October, alongside his autumn Budget. The CSR will set UK departmental spending and capital limits for the next three years.

A release on the Treasury website says the big themes will be to ‘Build Back Better’ and to ‘level up’ across the UK, following the Covid-19 pandemic, to ‘Advance Global Britain’ following its exit from the EU, and to ‘lead the transition to net zero’ that is the focus of the upcoming Cop26 meeting in Glasgow.

So, it might feel as if there is little to do for health and care. Sure, the March Budget was a disappointment, with its fudge on whether NHS funding was rising or falling, and 3% pay offer. But in September, the government announced an additional £5.4 billion for the next six months.

Then, a few days later prime minister Boris Johnson followed up with a health and social care levy that will kick-in as a 1.25% increase in National Insurance next year. That has enabled the Treasury to put NHS England’s resource departmental expenditure limit on a trajectory to rise from £148 billion this year to £160 billion in 2024-5.

Job done? Not according to health think-tanks, managers and medical groups. They don’t think the recent increases reflect the real costs of the Covid-19 pandemic; and they won’t be anything like enough unless Sunak addresses some related issues that need urgent attention.

Issues like finding a long-term, capital settlement to sort out facilities and embed digital innovation. Here is what some of the key commentators are looking for:

The King’s Fund: In a briefing on its website, the think-tank’s chief analyst Siva Anandaciva and policy advisor Jonathan Holmes identify four big areas for attention. The first is waiting lists.

The government has directed cash towards reducing the elective care backlog, and NHS England is running an ‘accelerator’ programme to try out novel ways to address the problem. Some of these have a health tech component.

However, the analysts point out that waiting lists and times are not affecting all services or all areas of the country equally. Acute care is getting attention, but mental health, community services, and primary care are struggling without anything like the same level of support.

At the same time, deprived areas have been hit much harder than more affluent ones; something that a government that is committed to ‘levelling up’ might want to tackle. The next area is non-NHS health spending, which has been constrained for years.

The analysts calculate that £1 billion less funding is going into public health than it was five years ago, while health inequalities are growing; something else that a government committed to ‘levelling up’ might look to address.

Then, there’s capital investment. The NHS hasn’t had a capital budget since 2018, and as the King’s Fund points out this “hampers the ability [of NHS leaders] to plan improvements to NHS buildings and facilities.” And, of course, IT.

Finally, there’s social care. The health and care levy won’t reach social care for three years and the promised white paper isn’t out. So, the analysts argue, “the CSR will need to increase core social care funding significantly before reforms are introduced.”

The Health Foundation: In its submission to the government, the charity also has four areas for additional investment over the next three years. In fact, pretty much the same four: public health, the capital budget, investment in workforce, and social care.

It calculates that for public health funding to get back to historic levels it will need to rise by £1.4 billion a year; that to for the NHS capital budget to keep pace with the revenue budget it will need to rise from £8 billion to £10 billion, and that for a growing workforce to be skilled up the Health Education England budget will need to rise from £4 billion to £5.5 billion.

Alarmingly for the government, it also argues that once the cap on care costs is taken into account, social care will see just £1.5 billion from the health and care levy – when it will need £2.5 billion to meet demand and £9.3 billion to meet demand and then improve the current system. Huge sums.

The NHS Confederation: Capital is the big concern for the Confed. It has run a survey that has found 96% of its members think they won’t have access to enough capital after the CSR and this will impact on their ability to “uphold safety standards, maintain their estate and embed positive digital innovations.”

A report on these findings devotes some attention to the digital point. It notes that as things stand “health and care staff use a plethora of legacy IT systems” that don’t interoperate, which “hampers successful digital integration and better patient outcomes.”

With this in mind, the report argues that “IT remains one of the best ways to increase healthcare efficiencies and safeguard future NHS capacity.” It also notes that the NHS has plenty to build on after the rapid roll-out of remote working, virtual clinics, and virtual consultations during the pandemic.

But it says that as things stand “69% of leaders say a poor capital settlement threatens their ability to embed digital transformation in their care, and even hampers efforts to maintain staff levels or keep appropriate records of patients who need elective care.”

Like the King’s Fund, the Confed notes that unless the NHS can invest to tackle the backlog and address waiting lists fairly inequalities will rise. Overall, it is also urging the government to increase the NHS capital budget by £1.8 billion a year.

That would take it from £8.53 billion this financial year to £10.3 billion by 2024-5. It is also calling for a “less disjointed and opaque” system for distributing the money and clarity about the rules for allocating it to integrated care systems.

NHS Providers: Far from seeing health and care funding issues as done and dusted, NHS Providers says the CSR “will be pivotal in confirming a multi-year capital settlement for the NHS, training, public health, and local authority budgets” and for delivering specific support to mental health, community, ambulance and primary care services.

In fact, it has ten ‘asks’ for the government, starting with more funding to address the backlog and the NHS’ rising cost-base, and moving on through capital, investment in the workforce, discharge, public health and social care, reform of patient pathways, digital innovation, new hospitals, and inequalities.

On digital, the report underlying these ‘asks’ also notes that Covid-19 has “accelerated digital transformation” with “multiple benefits” for clinical outcomes, user experience, and finances; but these gains will be at risk unless trusts can ‘fix the basics’ of underpinning infrastructure and poor skills.

“The government needs to enable trusts to address the digital backlog or ‘technical debt, whether it be outdated software, slow networks, or old hardware,” it says. “It must also provide multi-year capital budgets to enable trusts to better plan and execute digital initiatives” including “digital skills and capabilities to support new, digital ways of working.”

NHS Providers argues that any new capital funding for digital must be accompanied by appropriate revenue funding because trusts are already finding that they are locked out of bids for capital funds because they can’t afford the associated developers, licences and training.

The big question: what does the government want to achieve?

NHS Providers finishes its submission on a familiar note. “Without the right investment, difficult choices will have to be made regarding what the NHS can and cannot deliver,” it says.

“Trust leaders acknowledge that the NHS has received significant sums in recent weeks to help it deal with the Covid-19 pandemic and to deliver services over the next three years. However [other areas of investment are] critical pieces of the jigsaw needed to protect patient care, support recovery from the pandemic, and ensure staff work in safe environments.

“With sufficient and appropriate investment in these areas, the NHS could play and even bigger role in turning the government’s ambitions for net zero and ‘levelling up’ from ambition to reality.”

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