News / Department may ring-fence seven-day and tech funds

Funding may be set aside to support the implementation of seven-day services and to help purchase IT to aid service transformation, health secretary Jeremy Hunt has told MPs. However, most of the funding for transformation will come from efficiency savings.

At a Commons Health Committee hearing, Mr Hunt was asked if there would be a transformation fund, similar to that called for by the King’s Fund and the Health Foundation. The think-tanks believe a recurring ring-fenced pot of up to £2.1bn is needed each year.

He replied: ‘We may have a central tech fund to try to stimulate investment in technology because that’s a key objective for the next few years. We are already investing in transformation in the models of care through the vanguard programme, in which we have put £200m this year. There will be upfront investment in transformation.’

He continued: ‘We have to be honest with the NHS and say we simply don’t have the resources to have a very generous double-running process, where we invest all the money needed in the new models of care and transformation while the old system carries on as it always did. It would be lovely to be able to do that, but the reality is we don’t have to, so we will need to find some of that money from efficiency savings.’

Implementation of seven-day services will be staggered over four years, he said. ‘There may be some upfront money needed to do that, but the evidence is there are efficiency savings to be made by offering truly seven-day care,’ said Mr Hunt.

Questioned on how the NHS would make the £22bn of savings by 2020 outlined in the Five-year forward view, he said the Department of Health was examining where savings could be made. ‘We are going through the biggest exercise in NHS history in terms of sensible places to make efficiencies. This is on everything from procurement to the use of land – where the NHS could potentially save £1bn a year – to pay restraint, which is challenging given how hard NHS staff are working.’

Potentially, 20% of the £22bn would come from new models of care, he added, through schemes to avoid admissions and catch illnesses in the early stages.

He could not give details on how the extra £8bn promised by the government will be given to the NHS in advance of the spending review announcement. But he intended to publish detailed proposals on savings plans following the spending review and talk to NHS organisations about the level of savings that can be achieved.

In a similar vein, Lord Carter was due to write to trusts by the end of September, setting out how much he believes each trust can save on procurement. Trusts will then work with the Carter team to agree their figure by Christmas.

Though savings would not be made in the short term, as contracts with suppliers will have to be renegotiated, the health secretary believed there would be ‘big savings’ next year. He was confident that, in time, better procurement would save the service at least £1bn.

He acknowledged the financial pressures facing the health service, but insisted the NHS in England will break even overall this year, despite providers reportedly forecasting a £2bn deficit.

‘The financial situation is tough but the deficit in the hospital sector is one part of the picture,’ he told the committee. ‘Last year the sector had an £822m deficit but commissioners had an £855m surplus. It will be tough, but I am confident the NHS overall will balance its books by the end of the year.’