Systems need flexibility to deliver local solutions, says HFMA

In a statement on the current challenges facing the health service, the national body that represents the NHS finance community said that systems and their finance directors needed to be given ‘maximum flexibility’ to do what is right for their local populations. ‘They need to be trusted to know how best to tackle local challenges,’ it said. ‘This means that as much funding as possible needs to be allocated to systems without being ringfenced.

‘If we are clear on “what” the national priorities are, we need to allow local systems to develop the “how”,’ it added. It also called for national priorities to be set in collaboration with local systems, who have the best understanding of how these will impact local services and to take account of whole system impacts. ‘So, priorities around acute activity [must] recognise the work and costs created for other sectors such as community, mental health, or ambulance services.’

The association issued the statement to recognise the ‘unprecedented pressures’ facing the service currently. It said that staff were working flat out to meet significant urgent demand, while also addressing the extensive elective backlog. Clinical and operational colleagues were exhausted and feeling the full force of these pressures, but support staff were also under extreme strain.

And the association said the service was also under ‘significant financial pressures’, which were being felt directly by NHS boards and finance departments. It acknowledged that increased funding was not the solution to all the challenges facing the NHS. But it warned that some of the short-term solutions to the frontline pressures do increase costs. ‘And systems are still required to break-even despite high occupancy levels creating capacity issues.,’ it said.

Systems started the year with efficiency requirements averaging 5%, well ahead of the official NHS efficiency ask of 2.2%, in part due to cuts in specific Covid-19 funding. Covid activity has subsequently continued at higher levels than anticipated, occupying more NHS beds and reducing capacity for elective recovery and emergency admissions. And the level of the virus has also increased staff sickness, often requiring increased use of more expensive temporary staff solutions.

The HFMA said that the current financial challenges looked set to continue into the new financial year, despite the welcome increase in funding in the autumn statement. It said that workforce remained the most critical issue facing the service, with insufficient staff to deliver current services at the level required and 130,000 vacancies according to the most recent statistics.

And with clinical and operational staff understandably focused on frontline pressures, they are also less able to contribute to the planning process and productivity initiatives. The association is also concerned that initiatives on prevention, addressing health inequalities and population health management are likely to be most at risk from the current financial pressures, despite these providing opportunities to enhance the long-term sustainability of the service.

‘NHS systems will need to realise significant levels of cash releasing efficiencies to balance plans in 2023/24,’ said HFMA president Lee Bond (pictured). ‘That would be hard enough on its own, but we need to do it while wrestling with major workforce challenges and creating headroom to transform services and pathways.’