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Rob Webster, Chief Executive of the NHS Confederation, responds to the Public Accounts Committee report on acute hospital finances.

“This report comes as no surprise to anyone who has been following the finances of NHS trusts and foundation trusts in recent years. The big question is what we do about it. This report rightly identifies that urgent action is required to stabilise acute services in the NHS, as well as to create a sustainable financial future for our hospitals.

“To their credit, the Government, NHS Improvement and NHS England have begun to address some of the issues our members face. Through front loading of the finances in the NHS, targeted allocations to acute hospitals, a reduction in the efficiency factor to two per cent next year and the creation of three to five year planning, we are seeing the conditions improve. 

“More still needs to be done. There is an urgent and pressing need to reform the financial system of reward and risk in the NHS. Too often the incentives work against whole person care. Costs in one part of the service leading to improved integration and savings in another part of the service carry no incentives or double running support, just financial pressure and possible censure from individual regulators. This must change.

“Social care finances continue to bring significant demand too – with a 32 per cent year on year increase in delayed transfers out of hospital due to social care availability. We have been clear that the Government must appropriately fund social care so that we can transform into a more efficient system. Without this, we will never have sustainable health services.

“Overall, we need closer engagement with the sector and a genuine understanding of the challenge NHS leaders are facing locally. Our recent survey showed that 86 per cent of our members feel that national bodies work in a contradictory way, so it is important that they align better. This must be coupled with support from politicians and regulators to change services, change finances, and change a culture looking at performance based on individual hospitals, into one that measures and supports the whole system.” 

View PAC report: 

http://www.publications.parliament.uk/pa/cm201516/cmselect/cmpubacc/709/70902.htm