News / PCTs to receive real terms growth (HFMA 2010 latest)

PCTs will receive real terms growth when allocations are published next week, NHS deputy chief executive David Flory told the HFMA annual conference.

He told the gathered finance directors and managers that they would recognise the overall spending review settlement for the NHS in their local allocations. ‘It will be real in your allocations in the same way that it was real in the settlement,’ he said. He suggested that the revenue growth would be ‘up to 0.3%’.

However compared with average 5% settlements in recent years, this would represent a ‘challenge we’ve not faced before’. Mr Flory gave no significant details ahead of next week’s publication of the operating framework. However he said the NHS would continue to have access to the surplus it had generated in previous years. ‘PCTs will have the ability to draw down the surplus,’ he said. ‘I’m advised by strategic health authority finance directors that it will be in the region of £120m to £150m, reflecting what feels sensible locally.’

He said he was ‘amused’ by scare stories that the surplus had been lost. ‘The deal between the NHS and the Department of Health remains the same,’ he said. We’ve not said to PCTs at any stage in the last few years that you can’t have your own money. But it is sensible to manage over a number of years. That’s what we’ll continue to do.’

 Speaking ahead of Mr Flory, NHS chief executive David Nicholson hinted at greater flexibility in the tariff arrangements for next year. He said one of the challenges was to ‘make the money more fluid in the system to support the clinical changes we need to make happen’. 

‘As clever and as brilliant as the tariff and payment system is, it is very blunt for some of the delicate things we need to do for our patients to improve services,’ he added.

Asked about pace of change policy and public health budgets, MrFlory said progress on pace of change was more difficult at a time of low growth. He continued: ‘We haven’t at any stage looked to take money away from people deemed to be above their fair share in order to accelerate progress to fair share for those currently below that level. I don’t see that changing.

‘Pace of change as we go forward will be constrained by the level of growth in the system. However, it is my expectation that we will make some progress.’

He added that the separation out of the public health budget would be an important part of discussions as the Department worked through issues relating to the white paper.