Comment / Realism needed in planning guidance assumptions

The next few years present perhaps the most challenging phase of the last three decades. The NHS faces a period of austerity that coincides with the need for recovery. And it starts with a high level of vacancies in a workforce that is less engaged in the efficiency agenda than it has been for a considerable time. 

A recent HFMA Hub event on value, efficiency and innovation in healthcare explored this challenge including the role that national teams need to play to support local delivery.

One thing was clear. The planning guidance will be key and needs to be based on realistic assumptions.  Most organisations seem to be expecting an efficiency requirement in the order of 3% to 3.5% next year: a very tall ask.  However, with the current year’s reliance on non-recurrent efficiency, the real rate of inflation, and the likely further reduction in Covid funding, this could well be understated.

The buzz words of the last few months appear to be ‘integrated planning’.  But this can only work if it is recognised that inflation is what it is, not what can be afforded.  It needs to reflect the workforce we have, not where we would like to be.  And there have to be realistic limits for efficiency. 

If integrated planning delivers an unacceptable answer, simply pushing the system further is not necessarily a solution. How many systems that are now forecasting deficits in 2022/23 started with plans including abnormally high levels of unmitigated risk, or were negotiated from a draft position that included a big deficit? 

An integrated plan that is subsequently cajoled to include more activity for less money without a very clear rationale for that change to achieve an unrealistic ambition cannot be considered integrated.  And it is much less likely to be delivered.

Colleagues at the hub event are not the first to ask for a fully costed workforce plan, but this is fundamental to planning the future of the NHS.  If we cannot recruit, our ambitions to take on new projects requiring manpower will be frustrated.  The current roll out of the targeted lung health check project is a good example. The programme is slipping, undermined by the availability of radiologists. 

And yet 2023/24 plans seem likely to seek to increase the pace of the roll out, as it helps to address health inequalities.  Technology may well help. Artificial intelligence (AI) solutions are being used in this project to provide a second opinion alongside a consultant radiologist. But perhaps the use of AI could be explored as a substitute, especially in areas where there is currently no service.

The levels of accuracy are reportedly very high and this clearly needs to be clinically led. But there are opportunities to deliver an enhanced service for patients. Some of this is outside local services’ ability to deliver, requiring agreements between clinicians, the royal college and the centre covering issues such as remuneration.

However, it is clear we need a realistic plan, taking account of technology, to address the gaps in the workforce.  Only by narrowing the gap between supply and demand for labour can we possibly hope to limit agency expenditure.  Organisations routinely find themselves over the barrel of patient safety or elective recovery. These decisions often leave no option, but to use agency. 

With proper staffing, the agency staff dilemma solves itself. It will still be completely necessary and helpful in certain circumstances. But, with reduced demand, the NHS would have a far stronger platform for negotiating on price.  With a narrower gap between supply and demand for labour, I think colleagues would welcome a draconian agency cap; to limit the drift of substantive staff to agencies.  This may extend to outsourced ‘turnkey’ solutions, where essentially providers draw on NHS staff to provide services back to the NHS.  If supply and demand for labour are in balance, higher cost, convenient outsourced solutions will suddenly appear a lot less attractive to the NHS and a lot less lucrative for the private sector.

Perhaps one final item should be added to the wish list – that age old chestnut of quarter four funding.  There are few things more likely to result in inefficient solutions than the late announcement of funding. 

The above is a long, but not exhaustive list of the items raised at the hub event – there was also discussion about the value of a national ledger system solution, for example. My sincere hope, and that of the finance practitioners at the event, is that some of this is reflected in planning guidance.

Mr Wood is a member of the HFMA System Finance Special Interest Group