News / Funding fails to match pledge to move care out of hospitals

Promises to move care away from hospitals and into the community have not been matched by changes in funding for the different sectors, according to new analysis by the Nuffield Trust.

The government has frequently talked about spending more on community services that keep people out of hospital. For example, in the 2019 NHS long-term plan it made specific commitments to increase investment in primary and community health services as a share of the total national NHS revenue spend across the five years from 2019/20 to 2023/24.

However, the Nuffield Trust this week said this shift in funding priorities could not be seen in its analysis of funding for different sectors over the period from 2016/17 to 2022/23. 

Adjusting for economy-wide inflation, total funding for healthcare increased in real terms by 20% over the seven years – an average of 3.1% a year, the think tank said. But funding for acute, ambulance and mental health services has grown much faster than overall funding with increases of 4.4%, 5.2% and 5.3% – boosting these services’ share of funding.

In contrast, funding for community services increased by only 3.2% over the entire period – an average annual increase of just 0.5% a year. As a result, the share of total funding allocated to community services fell from 8% in 2016/17 to 7% in 2022/23.

Other services that aim to keep people out of hospital also fared badly in comparison to acute services. The local authority public health grant actually fell by 21% in real terms over the period, reducing its share of funding from 3.6% to 2.3%. There was also no increase in the share of funding spent on GP primary care, with average real-terms increases of 3.3% simply maintaining its 8% share of total funding. And funding for broader primary and community services such as community pharmacy, optometry, dentistry and funding for prescriptions also fell in real terms over the period.

‘Perhaps even more strikingly, funding for NHS community healthcare services was cut in real terms in three out of the six years between 2016/17 and 2022-23,’ the Nuffield’s report said.

The think tank also looked at funding per head of population, applying a needs-adjustment to take account of the ageing demographic. This showed that real-terms funding for NHS community services actually fell by 4.2% over the period studied. This means that funding per person was £6 less in 2022/23 compared with 2016/17 when demand for services is taken into account. For dentistry the drop is 20% over time or £11 less per person when adjusted for need.

Nuffield Trust senior policy analyst Sally Gainsbury (pictured) said that investing in care in communities was the only way to address the challenges of an ageing population and widening health inequalities.

‘But our analysis reveals that the opposite is true when it comes to how much money is being invested in different forms of healthcare, with striking falls in needs-adjusted spending per person in key community and primary care services,’ she said. ‘Quite simply successive governments have cut back on the very services that are needed to support the ambition of moving care out of hospital.’

‘These trends are not an accident: when the chips are down, it’s the blue-light emergency services that swallow up what funding is available for healthcare in straitened times,’ she added. ‘Whoever forms the next government will have a mountain to climb to reverse this trend without detracting from the very real spending pressures in acute care.’