Streeting ‘thinking deeply’ about overhauling NHS funding flows

The new government is “thinking deeply” about reforming NHS financial flows and incentives, Wes Streeting has said.

The health and social care secretary, speaking at the Labour party autumn conference on Monday, was asked whether NHS trusts would get multi-year budget settlements in the upcoming spending review.

He said: “I’d love to be able to find that level of stability and certainty, I’m thinking also a bit more deeply, about financial flows and incentives, because we’ve got to drive the big reform agenda that’s fundamentally about three big shifts; the shift from hospital to community, from acute to digital and from sickness to prevention.

“It is a vast, enormous system, and we need to make sure we drive financial flows and incentives, drives people to the right care at the right place, at the right time. We’re thinking quite deeply about that question.

“The whole system is geared towards short termism rather than planning for the long term.”

Several proposals, sometimes conflicting, have been advanced for the future of NHS financial incentives in recent years.

A large share of trusts’ income is currently on block funded contracts, following on from covid arrangements, and many believe this is hampering productivity and should be phased out. Some would like a return to more activity-based “payment by results” tariffs, and the idea of extending this to preventative care interventions has been floated.

Others believe this could bankrupt commissioners and disrupt development of out-of-hospital care. Some have advanced proposals for mechanisms to force funding into primary and community care; for “year of care” tariffs made to integrated care providers; and delegating commissioning budgets and financial risk to providers under “accountable care”-style arrangements.

Fresh eyes

During the conference fringe session in Liverpool, hosted by the Institute for Government, Mr Streeting also said he had been struck by the “silo mentality” between the Department of Health and Social Care and NHS England.

And he said government would look at the NHS long term workforce plan with a “fresh pair of eyes”.

Under the plan, published last summer, the medical consultant workforce is set to grow by nearly half over about a decade, while GP numbers increase by just 4 per cent, according to evaluation of the modelling by the National Audit Office.

This month’s review of NHS performance by Lord Darzi criticised the service, and previous government, for a major increase in hospital staffing while community and primary care have been neglected.

Mr Streeting said at the IfG event that the DHSC was “looking with a fresh pair of eyes at the NHS workforce plan [and] thinking carefully about workforce reform”, including resident doctors’ working conditions.

In response to a question from HSJ, he said: “On the Darzi diagnosis [about workforce], that came as a bit of a surprise… We’re about to start a big engagement exercise for the new ten year [health] plan and, as that work is progressing, we will want to judge the workforce plan [against] the 10 year plan and the three big shifts we’ve identified, to reassure ourselves and the NHS that we’ve made the right assumptions with the long-term workforce plan.

“[For] now, it’s steady as goes, but we obviously want to take a look at the workforce plan in light of the 10 year plan and provide that stability and certainty.”

Earlier on during the conference taking place in Liverpool, a Labour MP and former member of the Commons health and social care committee said she was “very concerned” because “at the moment we’ve not got a workforce plan” for the NHS.

Paulette Hamilton said: “I’m very concerned that the Conservative government had some sort of roadmap, but at the moment… I have to be honest with you, as a Labour party, I can’t see where we are saying we will pick up what’s going on with the workforce plan.”

The MP for Birmingham Erdington added: “What [is the government] doing to ensure that some of good points from the workforce plan are not lost, because at this moment in time, I have to be honest, and perhaps that’s not the right thing to say on a panel, I am not sure.”