Kings Fund - No quick fixes for financial failure in the NHS
With the NHS facing unprecedented financial pressures, a new report from The King’s Fund warns that there are no quick fixes for hospitals at risk of financial failure.
The increasing number of hospitals reporting deficits has put the spotlight on what happens when NHS providers are in financial difficulty. The report warns that the prolonged slowdown in funding means that the NHS is now facing a period when even the best managed organisations will struggle to avoid financial failure.
Against this background, the Health and Social Care Act built on existing arrangements for administrators to take over the management of failed organisations, with the intention of ending the practice of bailing out struggling trusts. This system has only been used twice and has already proved controversial. Meanwhile bail-outs for struggling trusts have become widespread.
Other, older approaches to managing financial failure such as replacing the management, mergers, or bringing in private companies through franchising arrangements have had limited success and were not designed to deal with the wave of financial distress currently spreading across the NHS.
The report calls for a more nuanced approach to financial failure based on:
distinguishing between providers struggling due to the exceptionally difficult financial environment and those with more fundamental problems
taking a more sophisticated approach to finance that distinguishes between emergency support and investment to enable transformation of services
allowing a realistic timetable for the recovery
understanding problems in the wider local health economy rather than just focusing on the individual organisation
establishing strategic leadership to manage change across local health economies following the demise of strategic health authorities
designing an approach that responds to legitimate public and political concern about difficult service changes.
Richard Murray, Director of Policy at The King’s Fund said: ‘Providers are operating in an extremely difficult financial environment. Developing an approach to financial failure that responds to this environment is a significant challenge. A nuanced approach is required based on an understanding of the whole local health economy and balancing a range of other factors. None of this makes for a speedy or straightforward process but there are no quick fixes.’
Latest News from
JRF - Large-scale study reveals scale of debt crisis among low-income households21/10/2021 13:35:00
A large-scale study of households on low incomes has revealed the extent of the debt crisis hanging over the UK’s poorest families as the country braces to weather a cost-of-living crisis.
IEA economist responds to latest ONS public sector finances data21/10/2021 12:35:00
Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, commented on the figures, published today by the Office for National Statistics
Adam Smith Inst - Send kids to tiny schools, says think-tank21/10/2021 11:35:00
Microschools vital to help disadvantaged pupils catch-up on lost education
New Local - Government is holding local areas back in quest for net zero21/10/2021 10:35:00
Councils lack the powers and resources they need to meet net-zero targets or adapt to the effects of climate change, says a new report urging the Government to devolve climate powers to local areas.
Inflation likely to be well above 4% by the end of the year, says IEA expert21/10/2021 09:35:00
Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, responded to ONS consumer price inflation figures for September 2021
IPPR - The disease of disparity: A blueprint to make progress on health inequalities in England19/10/2021 10:35:00
Health inequalities are wide and widening in England.
IEA - VAT cut on energy bills would be “a welcome relief for the public”19/10/2021 09:35:00
Andy Mayer, Chief Operating Officer at free market think tank the Institute of Economic Affairs, commented on reports that Chancellor Rishi Sunak is considering cutting VAT on energy bills
Work Foundation - Outdated attitudes risk widening inequalities in hybrid workplace, think-tank warns15/10/2021 15:10:00
Employers could undo the progress made over the last 18 months and deepen workplace inequalities if organisations fail to override the deep-rooted perceptions of ‘office culture’, a leading think tank has warned.
The King's Fund responds to the Department of Health and Social Care announcement to improve access to general practice14/10/2021 13:15:00
Beccy Baird, Senior Fellow at The King’s Fund, commented on the announcement from NHS England and the Department of Health and Social Care of a blueprint to improve access to general practice