News / NAO urges specialised services focus

In a report, The commissioning of specialised services in the NHS, the NAO recommended NHS England and NHS Improvement should design tariffs to help providers adopt the most efficient service models. It said the range of funding arrangements are an obstacle to transparent reporting of performance and lead to variations in prices.

It recommended the national bodies should confirm long-term funding arrangements for the services and their intentions on the use of national and local tariffs. NHS England should ensure that it has the data required to understand how variations in local tariffs are related to local practices. It should use this information to design tariffs to support services to adopt the most efficient service models, the NAO said.

The auditors added that the specialised budget had increased by an average of 6.3% a year between 2013/14 and 2015/16. For the NHS as a whole, the budget rose by an average of 3.5% a year in the same period.

NHS England had found it challenging to live within its budget for specialised services and recognised that keeping spending within its limits will be ‘exceedingly difficult’, the NAO said.

A number of factors were creating financial pressures in specialised providers. These included new drugs and increasing demand. But NHS England and Monitor attempts to control costs by reducing the tariff may have affected providers’ financial sustainability, the NAO said. While national contracting had given NHS England greater influence over providers and allowed price reductions, it was unclear whether its commissioning hubs had the skills to manage the contracts effectively.

The report added that NHS England does not have consistent information in a number of areas, including cost, access, outcomes and efficiency. And, despite taking over commissioning of the services three years ago, it does not have an agreed strategy for the services, it said.

NAO head Amyas Morse said: ‘Against a backdrop of increasing pressure on NHS finances, NHS England has not controlled the rising cost of specialised services. If specialised services continue to swallow up an increasing proportion of the NHS budget, other services will lose out.’

Miriam Deakin, head of policy at NHS Providers, welcomed the report. ‘We strongly support the call by the NAO for NHS England to develop an overarching strategy for specialised services. Only 6% of the trusts that responded to the NAO survey said that their current contractual arrangements with NHS England enable them to plan for the longer term,’ she said.

‘We also agree that the payment system needs refinement and we welcome the call for NHS Improvement and NHS England to design new tariffs to better support specialised services.’