Public Accounts Committee Select Committees

Welcome to the Public Accounts

Committee on Monday the 5th of March

2018. We are here today to look at

the sustainability and

transformation in the NHS on the

back of a National Audit Office

report on the subject. This is a

subject we return to perennially as

a committee sadly and last year we

were very critical of the short-term

measures used to balance the NHS

budget. And last year, that was when

the trust sector reported a deficit

of nearly 800 million and

forecasting a deficit of over 900

million this year so the system

still has a long way to go before it

is sustainable. As the Olivia

highlights and we have Cedric

before, the NHS is focused still on

survival with growing demand but

it's not the case with that and the

transformation funding schemes

cropping up the system rather than

doing the transformation it was

intended for, and in that system,

there are clear winners and losers

as the waiter but it is formulated.

We have spent time talking to

finance directors or working with

colleagues around the House to do

that and two concerns from the

trusts was the issue around

stuffing. And the concern that they

are getting mixed messages from the

top. So we will probe some of that

today. I want to introduce our

witnesses. From my left-to-right,

David Williams, Director-General of

finance at the Department of Health

and Social Care Act. The permanent

Secretary at the Department of

Health and social care. Simon

Stevens, Chief Executive of NHS

England, not yet of social care. I'm

sure that will come! And Ian Dalton,

the new Chief Executive of NHS

improvement replacing Jim Mackie,

who retired last Christmas. It is

your first hearing since Christmas?

Welcome. Before we get into the main

session, and wanted to ask both the

permanent Secretary and Simon

Stevens about the NHS winter crisis

funding provided to trusts who bid

for it and met certain criteria last

year. And our reckoning, in about

November, it will arrive, and have

you any indication of how that is

being spent? I want to know how that

is being spent and where it has been

spent and how you are monitoring

that from a central level?

David

Williams first. I can set out how

the funding was allocated and

planned to be spent. And then you

may want to hear from NHS colleagues

how in practice it is being deployed

into the system. So the Chancellor

announced 337 million pounds of

additional funding at the budget in

Artur Mas chair. £150 million that

has flowed straight through to

providers to cover costs and

pressures which they had already

incurred or been forecasting. 137

million was put into the system to

buy additional capacity. Some of

that around additional beds in the

acute trust. Some for increased

access, particularly over the

Christmas holiday period to GPs, as

well as resources for mental health

services, ambulance trusts and NHS

111 services. We retained

essentially £50 million of that

additional money against the point

where winter was over. Which is a

point we have not yet reached! And

we are currently in discussion about

how best to release that.

So that

money is for this financial years,

so winter has to be over by the 31st

of March?

We hoped there might be

some opportunity for investment

towards the end of February and

March into elective care but in

practice, the continuing high levels

of flu and the bad weather that we

have been having means that we

focused more heavily on A&E

performance.

Sorry, so the money,

the 50 million you have held back

century, it has to be spent by the

31st of March? As you are the

finance Director, you might not want

it spent.

It has been voted the

department through supplementary

Estimates and we have put it into

the mandate. So there is no question

about whether there is anything

sensible we can do with it over the

next four weeks. Or whether it is

simply a relief to the bottom line.

Simon Stevens, from your

perspective, has been money been

spent well and have you kept track

of it?

It has been allocated in the

way David described. Short notice.

To trusts and a small amount to

macro 3 and for the first time in

terms of winter funding, mental

health trusts also reserve that

received funding -- and a small

amount to GPs. To help the winter

crisis and A&E departments. That has

collectively helped the NHS perform

under demanding circumstances over

the December and January period. The

key fact to have in your mind is

that we looked after at one people

within the four-hour A&E target in

December and January this year than

we did December and January the year

before.

Given the money arrived

quite late into the trust covers and

there is still money not yet spent

with four weeks to go, is there not

a risk it gets spent on short-term

expense of options by Kylie paid

locums if you can find them,

although the evidence from finance

is hard to find stuff even if you

have the money, is it not better to

look at this in a more long term

sustainable way?

Yes, ideally, you

allocate money very early for the

reasons you say. In this case, as I

think I may have said to the

committee before, what we were

investing in was the NHS existing

plan for winter. A lot of what David

has described were plans that were

already there in the system that we

were back funding through money that

people had already spent.

Let me be

clear, plans, but without the

funding attached, so you still had

to find stuff. David Williams talked

about adding capacity including

beds, it sounds easy to open up a

bed, but that is the staff cost you

are paying for, so you have to find

the nurses and ancillary

professionals to support that at

short notice. So even with the plans

in place, you need the stuff. Yes,

that's true. Have you monitored

whether they have overpaid for the

staff?

I don't think we have seen

any evidence of overpaying.

Yes,

trusts had been planning ahead of

the budget money becoming available

having additional services online

over the holiday period, what the

budget money has done is provide a

funding source for that. Over and

above that, I would say that there

are a range of nonhospital related

services that were put in place for

this winter that were not available

last winter such as the fact that

everybody, every major A&E had

clinical GP streaming available this

year such as the fact that we had a

much higher proportion of calls to

11 on being dealt with by a nurse, a

paramedic or GP. They are additional

services put in place for this

winter and the budget money has

helped fund some of those costs.

So

just to be clear, if they were put

in place before the money was

available, where their staff trusts

were saying, we hope we can pay them

and we hope the department will pay

more money, or was this money, the

plans were there, but the people

will not and they had to find the

people to fill those?

Trusts had

been asked to and they were planning

for expanded services over this

holiday period, head of the budget

money becoming available.

So had

they recruited the stuff already?

To

give a concrete example, before I

came here, I was privileged to be

the Chief Executive of one of our

largest trusts, Imperial health

care. We had plans to increase our

capacity at risk by a significant

amount going into winter. It is a

legitimate call on the resource to

meet in part costs that trusts knew

that they were going to incur.

How

would Imperial have fun to do that?

Without the money, we would have had

to make additional savings or see

the budget go out as a result.

You

had staff and doctors and nurses in

positions, salaried staff to fill

this capacity?

Inevitably, when you

plan this, you work on an assumptive

you can feel your chefs and we know

there is a significant with

vacancies across the service. --

chefs. That is the basis on which

you plan, in advance, to build the

capacity. Give the point with

mentioning, management information

tells us that if one compares the

bed state in January with November

30, we had moved up from 96,000 298

( 299,116 (. So there is no question

that the NHS steps is capacity up.

As a result, some of the really

impressive work that clinicians

across the NHS have done to see

patients within four hours, despite

the pressure, relied on that. So it

is an important contribution,

notwithstanding all the other debate

we have just had.

Mr Dalton, you

Chief Executive of a large trust.

With that hat on, is not more

sustainable tap that money built

into your budget, giving you are

planning for this? And you are now

sitting next to the Department, what

would you say to them about how

sustainable this approach to funding

is and what they should be doing in

future years?

I would say two

things. First is that the money was

really welcome for the reasons

talked about. And secondly, this is

something we have signalled, NHS

England and ourselves in the

planning guidance, that it is

absolutely right that people should

be planning for this on the basis of

their projections for the year

rather than receiving the money late

in the year although it was welcome.

I think that is a signal we have

sent the NHS for next year partly to

address this issue.

In terms of how

the winter money is spent, so Chris,

you said you are not sure whether

that means we have been overpaying.

I said we have not seen any evidence

we have been overpaying. We monitor

agency spend extremely closely

indeed and have a series of controls

around agency spend and NHS

improvement and we were looking at

the numbers earlier today and we

have not seen any evidence in those

numbers that there was a loss of

control on agency spend over that

period.

So where is the extra

capacity coming from, who is filling

these additional hours that can be

created through the funding?

Normally, Ian will comment further,

it will normally be existing members

of staff doing extra shifts either

as part of overtime or as part of

bank arrangements. What we have seen

as agency spend has declined is a

big expansion in trust run bank

arrangements. That being the way in

which temporary cover is funded,

which is of course more efficient,

but also, it fits better with the

staffing model of the hospitals.

Do

you want to add anything? Later in

the discussion, we may talk in the

reduction of agency spend, which has

been really quite extraordinary, 20%

projected reduction issue, that is a

dramatic reduction. But

specifically, normally, the best way

of staffing a surgeon capacity, and

bear in mind hospitals have to

maximise their capacity to cope with

the emergency patients coming

through the door on a daily basis as

well as just across winter, is

absolutely to offer your own staff

who know the hospital and the

patients and the protocols and the

wards, work through the bank and you

will have seen I think a very

successful move from agency to bank

as part of the overall staffing plan

for the NHS. That was the case again

this winter.

I appreciate NHS staff may welcome

that opportunity to earn extra money

and do additional hours but is that

sustainable in the long run given

that it must be a highly pressurised

environment for those staff over the

winter period although they clearly

do this of their own free will? Are

we not better to look at longer term

solutions around creating those

positions in earlier in the year

even if it comes at a cost, but is

more sustainable for managing some

of those winter pressures?

I think

the key message we give the NHS and

we have given clearly in the

planning guidance for next year is

that absolutely the NHS needs to

plan for the capacity it expects to

see, particularly the emergency

demand which we have seen as this

committee has commented on recently

moving ahead significantly over the

last two years to give one

particular number which is on my

mind during December, the NHS

admitted 400,000 people through as

medical emergencies into hospitals

which is a 5.9% increase in the same

period in the previous year so there

is a significant rise in demand and

it's absolutely right that hospitals

plan for that, winter is, we have

had a particularly demanding winter

and I think NHS staff of done a

phenomenal job. Nonetheless... At

THEY TALK OVER EACH OTHER They might

plan for this but if they don't have

the funding they cannot recruit the

people?

The bottom line is yes,

would it be desirable to have the

extra money earlier in the year if

it was there, sure, we are nothing

other than grateful for the extra

money, and our message to the NHS

for 2018-19 is we have to plan on

the assumption we don't have it

again and thus build plans for the

year with the emergency capacity

built up for December and January.

Are we saying, last year you

planned, you used the phrase "At

risk". He did not have the budget

capacity, you took the risk that

either you would get the funding or

you'd be allowed to have a

deficit...

Not quite.

So let me

carry on a second. Then, this year

if I understand rightly, the plan is

that you will plan earlier for the

peak you will have during the

winter? You will have more staff on

board, does that mean you will have

the money already allocated to you,

what does it mean exactly about

funding?

When you get a winter

pressure, the bit of the NHS which

sufferers is the discretionary bit,

the elective bit, not the emergency

bit. You would always expect a trust

to meet and resource itself to meet

its emergency demand. In the absence

of extra money to pay for that, what

it would need to do is cut its

collective activity and its other

discretionary activity. So every

trust will plan for the emergency

part, so what we did essentially

wars we funded what would otherwise

have been reductions in service

elsewhere in the hospital. That is

why it's perfectly possible to have

a planned....

THEY TALK OVER EACH

OTHER The NHS is being fought to rob

Peter to pay Paul.

Which is why we

wanted to invest the extra money. As

Simon says, would it be even better

to have that money right at the

beginning, of course it would, but

we didn't. And clearly it is better

to remove from trusts they need to

make those reductions in other

services by funding the existing

winter plans, than it is not to. But

we're not denying, is it better to

have all the money at the beginning

of the financial year to spend

properly, that is: the optimum, the

second of done is to get it through

the year.

Another point, there was

quite a lot of speculation about the

amount of non-urgent surgery

operations in January which would

have to be deferred, we will have

the definitive figures later this

week but the early indications are

that partly because of the extra

funding that was available the

number of operations deferred was

substantially, substantially lower

than speculated in the press at the

time. We will have those figures

definitively on Thursday.

So a lower

than very bad figure is a good

result? You see optimism in every

bad figure.

I wanted to come back to

the question about bank staff and

flexibility, this is all about

balance. For something the size of

the NHS or indeed a trust it's

perfectly sensible to have a bank of

flexible staff to allow you to

manage peaks and troughs, you don't

want to staff for the maximum for

the entire year. It is also true we

have more vacancies in the NHS that

we would like. If your vacancy

position was perfect you would still

want a bank of flexible staff so we

are definitely not saying we want

that out of the system. We want much

less agency and more bank to meet

those flexibility needs.

Wore the

reliance on those bank staff create

broader pressures which mean it more

difficult, part of the reason there

is the struggle to fill vacancies is

that staff find the pressure of

working in understaffed and

overstretched environment is too

much. Are we not just continuing the

cycle?

Well-run banks help you with

the problem rather than hinder.

There are members of staff who

rather like bank work, you choose

when you work and it's very flexible

and you can do it at points in the

year where you want to earn more so

there is positive advantages to

flexibility of bank work. But you

also as you say need a properly

staffed kora which is one of the

reasons we are consulting on future

workforce strategy at the moment.

One of the key points at the

beginning was the inability to

recruit vacancies, the danger we are

talking up the bank as if it is a

solution but...

It is why I made the

point, it's all about balance, a

well-run bank has a part to play but

it does not take you away from some

of those underlying issues.

Does not

fill gaps in the workforce.

INAUDIBLE

The winter money still left held

centrally, how many trusts asks for

more money than they were allocated

as part of the winter pressure

funding and as an example my

hospital trust was given around £2

million but it calculated the actual

additional cost was around £10

million so there is an £8 million

bill to pick up and you are sitting

on 50 million, so how many trusts

would have liked that money earlier

in the year rather than new thinking

about how to spend it now?

I don't

have that information, the way in

which the money was allocated was

through a series of engagements by

the national lead Pauline Phillips

with regional directors and trusts

to come up with the allocations

which we have been talking about. In

practice I think the 50 million will

help offset some of those additional

pressures that trusts have faced in

managing winter. It's just at the

moment those pressures are being

offset with the money on the

commissioner side of the equation

rather than individual providers and

that is one of the things we need to

work through over the next few

weeks.

Would you be able to send to

that information as though specifics

if someone came back and asked for

more at a particular time? It would

be interesting to know what trusts

were seeing the reserves is where

they needed at the time as opposed

to what the Department was offering.

Has anyone done any work to say what

the total cost of the winter

pressures was to the NHS and how

much money was allocated Allah that

was as a percentage because to pick

up the point, we have winter next

year and it's likely we will have

winter pressure points again and if

we know what the cost of winter is

going to be we should be looking now

to create the circumstances while

the trusts are thinking about how

they can make small surpluses

throughout the year to meet those

costs or in the cases of those

trusts which will not get into

surplus they can start talking to

commissioners about how they can get

the demand without relying on

one-off payments.

We do a review of

how winter has gone at the end of

winter every year and Bill back into

the planning. Do we look

specifically at that?

We do. What I

will say, I think as was said

earlier, the going assumption has

got to be that the funding made

available with realistic planning

assumptions around emergency growth

with the right seasonal has to be

built into capacity plans at the

start of the year. I think that is

kind of pretty much a statement of

the obvious. There was a significant

positive this year and a significant

negative when it came to pressure,

the significant positive was we have

generally turned a corner on the

delayed transfers of care problem

which has been brewing over many

years and we were able to free up

almost 2000 delayed transfer of care

beds come this January which means

it's the best we had into a half

years and that was in the zone of

the 2000-2000 we had plans to free

up. That is good news. The bad news

is the Bobsleigh had the worst flu

season in seven years. The

even today we've got around 5000

hospital beds occupied by people

with flu or no rotavirus is the

equivalent of having ten acute

hospitals solely looking after those

patients which would not normally be

the case, on 100,000 bed base its

unusual incremental pressure compare

with the last six or seven years.

Great progress or not the whole

system working as evidenced by the

reduction, set against this pressure

from flu and norovirus which we have

experienced this year at a far

higher rate than recent memory.

Surely the ideal situation is that

no elective surgery is cancelled and

trusts and commissions planning for

winter pressure but at the same time

planning to carry on their normal

elective work, should that not be

the ideal?

Yes and his extent that

is what the national emergencies

pressures panel reminding people of

when they said at the beginning of

January don't engage in last-minute

cancellations the night before, the

morning of when people are coming in

for surgery. The assumption should

be given the extra flu pressures,

norovirus I have thought about you

have two free up. Hospitals and

surgeons rightly want to try to use

of a last available bed which can be

deployed for patients on waiting

lists who have got non-urgent needs

for surgery. There is always that

balancing act. But as I see the good

news is that actually the number of

elective deferrals for routine

operations in January is going to

come in substantially more low than

was feared at the beginning of

January.

Whilst it is the government

's ambition to recruit more nurses

and doctors it's having great

difficulty doing so, doesn't it

therefore make it even more urgent

with these constant winter pressures

that the government puts greater

attention into recruiting and

training more nurses and doctors?

On

both fronts that is right. On

doctors in the hospital and

community health services it's worth

remembering the number of full-time

equivalent consultants is up by

almost 1500 over the course of the

last year. That compares with GPs

with a number is down. In the case

of doctors in training, there is a

increase of more than 1200 over the

last 12 months so that's important

thing to in mind. In curse of the

nursing and health visiting

workforce there are genuine

pressures that a combination of

nurse training, place expansion, new

routes into nursing, better

retention and indeed the action the

government is poised to take on

dealing with nurses pay three the

new agenda for change reform, all of

those have to come together to deal

with the obvious pressures we are

facing in nursing. I am not decrying

the pressures on the other parts of

the workforce but I think the

nursing pressure is very front of

mind.

It is all very well increasing the

number of consultants, but unless

you have the back-up staff, they are

not as effective in productivity

terms as they might be. Surely the

entire picture has got to come

together?

Yes.

Yes, that is white we

all led by Education England,

drawing the NHS, that is why we are

doing the consultation about future

workforce strategy. We do have a

number of pressures that Simon has

mentioned and we will need some new

approaches.

So you will be looking

at the nursing bursary?

We are not

looking at changing the funding, but

we will certainly be looking at the

routes into nursing. Including nurse

apprenticeships and other mechanisms

so that we maximise...

Can I just be

clear, a nurse apprentice will be

paid to learn on the job rather than

having the nursing bursary which

paid people to train traditional

route?

Yes, if you are a nurse

apprentice, it works like any other

sort of apprenticeship.

You are

looking at expanding as

apprenticeships, where you pay

someone to train, having got rid of

the bursary where you paid someone

to train?

No, it is a completely

different model.

Well, it is maybe a

different model, but you have the

beginning somebody who is not a

nurse and at the end, somebody who

is trying to be a nurse.

What we are

looking to get to is a variety of

different routes into nursing that

suit different types of people. So

we will have people who continue to

want to do the classic undergraduate

route, we will also have people who

wish to go through nurse

apprenticeships.

Just to be

absolutely clear, for fear of

misunderstanding, if I wanted to

train to be a nurse today, I could

train and a nurse apprenticeship and

the NHS would fund that and I am a

fully qualified staff nurse, yes?

And if I wanted to train to be a

nurse but go through university, I

would have to get a loan and pay

£9,000 a year fees and come out as a

fully qualified staff nurse? So the

NHS is funding nursing still, even

though it has got rid of the

bursary, it is funding it through

apprenticeships.

The apprenticeship

is funded through the apprenticeship

levy as I am sure you know. So

saving money. Would you like is to

set up these various proposals?

Yes,

to see how many people you are

getting through and the variations.

These are exactly the things we

calls that consulting on. For the

reason that Simon set out.

Depends

ship levy is still tax payers money,

I should say. Bridget Phillips is

asking about recruitment of GPs.

I am concerned about the decline we

have seen in Sunderland and across

the North East, in 9% fall in the

number of GPs in the last two years

alone and this continues a declining

trend. In an area which has real

health problems, often chronic

problems associated with industry.

What can we do to address some of

the regional imbalances that exist

within the workforce?

You are right about Sunderland, not

just the North East, other parts of

the country as well. But we have to

decompose it if I can put it that

way. The first thing we have to do,

we had to make sure that for newly

qualifying doctors, general practice

is seen as an attractive career

option. Which for several years

prior, frankly, it has not been. We

have had significant shortages of

people going on to the GP training

scheme. What we have done is

increase the GP training recruitment

onto the training scheme. We have

3157 places felt blessed year which

was the highest intake of GP

trainees ever. -- build last year.

And we have offered salary

supplements to GP trainees who agree

to train in parts of the country

where, as you described, we have had

problems in filling those training

spots. And we have filled 133 such

places last year and because of the

success of the scheme last year, we

are expanding that to 250 places

this year. In addition, we know that

we have got to make it easier to

come back to GP work, if you have

taken time out for a family break,

so we have a GB returned back to

scheme aiming to support at least

500 GPs in induction refresher

programmes. 600 GPs have applied to

join that programme. We are also

trying to develop a more flexible

model for being the GP so if you do

not want to sign on as a partner or

as a majority of your week salary

employee of practice, we have got

something called GP career plus

where you agree to work with

multiple practices in the area where

you live, but with a more sustained

commitment and an exchange, you get

a series of supports from the NHS.

But we also have a problem which we

do not as yet have an answer to,

which is the premature retirement

rate for people in their late 50s

and 60s. And I think the Department,

the evidence to review body has

pointed out one of the contributory

factors is the broad change to the

pension system and so I am not going

to pretend that is not a problem, we

have more work to do on that.

When

you look at the numbers coming

through to training places in 2017,

the problem is also again we see a

regional imbalance. In London, the

fill rate was 106% and in the North

East, Dunst and 77%. So at the point

of recruiting people into practice,

there are significant regional

variations in our ability to fill

those places. It is welcome that we

see more people coming in, but it is

not just enough to have a raw

number, we want to make sure those

people are in the book -- right

places.

Exactly, that is why we have

the salary supplement scheme and we

are not just creating lots of extra

training places in London which you

probably could fill because the

worry is that might draw people from

other parts of the country in those

training schemes. What I also did

not mention was the work we are now

doing and GP international

recruitment with a particular

intention of placing those

internationally recruited GPs in

parts of the country where it is

hard to recruit and retain. So the

North East falls into that category,

but also places like Lincolnshire

where our first international

recruits had been recruited to and

they are installed. We are aiming to

see we can resource may be 2,000

plus international GPs over the next

three or four years.

I agree on the

issue of medical school training

places and Sunderland University has

bits to open a new school to provide

additional places because also, do

we not need to look at making sure

we have access to medicine more

broadly, not just supplementing

existing provision, but looking at

creating new and different ways of

getting people into medicine?

We

certainly do. It has to be said that

is probably not a town or city in

the land that has not bid for a new

medical school but Jo advocacy for

Sunderland is warmly welcomed and

noted?

There is quite clear evidence

that people do tend to stay where

they are trained or placed which is

why we have taken measures as Simon

is setting out.

We have spent a lot

of time on the preamble, you have

been in the Department aid year now?

Nearly two. Forgive me, time flies!

How would you rank the financial

2017-18 in terms of success in

balancing the NHS budget?

The

National Audit Office set it out

very clearly. We clearly made a lot

of progress from 2015 to 2016, in

terms of the overall deficit and the

levels of financial rigour we saw in

the system following the financial

reset we did in July 2016. But we

did not achieve everything that we

were trying to achieve, as the

National Audit Office sets out, and

we still have a lot of challenges

going forward.

I think challenges in

the word, you are still papering

over the cracks with capital budgets

funding revenue, still one of

savings. And from the Finance

Directors that send information to

us, a lot are concerned just as one

example, East Lancashire hospitals

NHS trust, the last two years, the

trust has become increasingly

dependent on non-recurrent measures

to balance our box and while there

remains an opportunity for waste, I

guess they say that to people, but

they might be telling you what they

are saying, but it is increasingly

difficult to release this

opportunity. The mild way of saying

that they cannot keep doing it. So

you are still doing it?

Figure ten

on page 27 of the National Audit

Office report set this out extremely

clearly. The level of recurrent

savings that trusts have achieved

remains by a long way the biggest

portion of the savings made. We do

still have one of measures and that

one of measures in every set of

accounts in every sector, we wish to

see our reliance on that falling

over time and as we have discussed

up the Crow how long will it take?

We want to eliminate capital revenue

switches by the end of this

Parliament. What have we said, David

on the one-off measures?

We have not

set a timescale.

Very cleverly, Mr

Williams! Can you set a timescale

now and how long is it acceptable to

oversee the budget as you do is

Finance Director at the Department

of Health that allows hospitals to

carry on Reading capital budgets?

I

prefer not to set a precise

timetable now, not least because I

think as you see within the report,

and as comes out in data that the

NHS publishes, they're both a

general set of issues which NHS

providers need to deal with, but

also, a of specific challenges for a

relatively small number of trusts

with especially difficult financial

situations and large deficits. And

so thinking about a reduction in

reliance...

Those hospitals,

highlighted they are one of the

biggest challenges in the NHS budget

and some trusts, they have large

deficits and if they do not get

support, they will continually be a

drain on the overall budget. Is it

possible for those trusts with those

big problems to overcome them in

over a year or two years, do they

not need help to get to a place

where they no longer have this large

and growing deficit?

Yes, they do.

It is white in the July reset I

mentioned, we introduce the

financial specialists -- special

measures regimes which is one of the

things that has worked for those

people going into the financial

special measures regime, we have

seen either stabilisation or

improvement in everybody's finances,

which is partly about pressure and

also about the support putting.

Can

I just respond those points?

Firstly, on the recurrent and on the

challenged trusts because both are

important. I think on the recurrent

and non-recurrent income it is

important to have a sense of context

which says that the NHS provider

sector for 232 organisations is

continuing to deliver every year

more cost improvements and they have

in the past so overall, we have seen

that rise from 2.9 billion to 3.1

billion in 2016-17 and a forecast

based on 3.3 billion 417-18. So that

is the good news. It is true to say

and it concerns me as much as my

colleagues that while there is a

legitimate degree of non-recurrence

in that, the amount of non-recurrent

still small compared to the overall

savings and it is rising. And that

is an issue. There is no question

that the sector is continuing to

deliver cost improvements and it

needs to continue to do that, but we

cannot rely on the same amount of

non-recurrent on an ongoing basis.

And they are reducing cost

reductions, but we know demand is

rising. The costs are going up. At a

rate faster than even if we are

optimistic, and we talking about

efficiencies, would you not agree?

No, I would disagree with that. I

think the issue of fiscal studies

has shown that our funding and our

all costs have been growing fast

lower than the rate at which the NHS

has been doing extra patient care.

So just to put numbers around this,

if you look at the period from

2009-10 to 2016-17, the IFS data

shows the English Department of

Health, the funding has gone up by

2.3%. The services we provide for

emergency patients have gone up by

6.7%. And the plan surgery would

provide has gone up by 15.7%. So the

NHS has got a superb record on

productivity growth, which is why

evidence that has been prepared for

this committee by the health

foundation points out NHS

productivity growth has been faster

than that of the Cape economy

overall. So these are genuine

savings.

That was interesting

evidence. I think it showed what the

NHS can do at some of its best. But

demand is increasing and that does

not create. You have said it often

enough, I'm giving you an open goal

here, next to the permanent

Secretary, that there is a challenge

with the sustainability and the

funding mechanism we have heard.

Winter crisis planned for without

the full money available, trusts

know they do not have the staff and

yet they have accepted a funding

model that does not allow them to

effectively recruit the stuff even

if they were available, and you have

that consistent game. 4.9 billion

last year was given financial

support to keep the NHS trusts

afloat.

THEY TALK OVER EACH OTHER

I think

both things can be true once, the

NHS has become even more efficient

over the course of the last several

years, all the data shows that and

at the same time there is a wedge

opening up between the NHS and the

funding available, those things at

the same time and just to put

another point which illustrates the

point very graphically, in the

report from the NAO, the referenced

that the funding has been going up

in real terms but the difference

between what the NHS has

successfully managed with over the

last five years and 3.7% is an £8.8

billion funding difference in

2018-19. Cumulatively that's 27

billion of funding that the NHS has

contributed to economic turnaround

for the UK economy over that period

compared with our trend rate of

funding growth.

If you take it over

a long period of time the

suggestion... The 48. If you look at

what has happened since 2010, we

have seen, your predecessor

acknowledged the efficiency savings

target was increasingly challenging

to deliver. What is your view on the

4% efficiency savings?

Could I

answer the point on the trust first?

I do agree the productivity point is

not insignificant. We anticipate a

1.8% like-for-like efficiency

forecast for this year which does

considerably outstrip the rest of

the economy. On the most challenged

trusts I think it's fair to say a

small minority of our trusts have

particular financial issues they

need to resolve. It is also true

that returning was trusts to

financial surplus is of course not

going to be a one or two-year job,

it's a process of improvement

against an underlying deficit

problem which needs to be there for

improved over a million of years, I

think one of the reasons my

predecessor introduced the financial

special measures regime back in 2016

is to allow more support for NHS

improvement to go into the most

financially challenged trusts. I

think the record in the initial

year, the first eight trusts

according to the NAO report improved

their year end position by just £96

million as a result of being in the

programme. For the next category of

trusts those which were in what we

call the financial improvement

programme, 22 trusts, improved their

position by 107 million. So there is

a general need to create continued

efficiency across the sector as a

whole and we will talk about some of

the elements of that as this

committee goes on. But there are

also individual organisations that

are further away from really need to

be financially and I think we have

to be realistic about the pace of

improvement they can make which will

not be a single year 's improvement.

Does this not cause challenges we

have got effectively rewards, there

is a potential for more funding to

come from the centre, if you're one

of these challenged trusts and you

don't accept because you know you

cannot manage to deliver that, you

get less additional money, so the

additional funding is supporting

trusts which do already reasonably

well. There is a serious problem

with the trust and additional

funding is not so readily available,

is that not a topsy-turvy way of

dealing with it, what tools you have

for dealing with challenged trusts

with deficits which take several

years to resolve to make sure they

do that without being further

penalised because of decisions out

with the control of the current

management or patients, large trusts

which had been brought her in

interesting ways are what I am

thinking of.

There are several

different elements so I will pixel

Villa Park because it's quite a

complex question so I hope I don't

forget but I'm sure you'll come back

if I do, the most challenged trusts

do need support across a period of

time which is why on occasions and I

vow to do it in my tenure, I started

on this role on the 4th of December,

we had to move into financial

special measures regime. As

regarding the sustainability and

transformation fund, and the

underlying position of trust I think

they can be different things. The

control totals have proven their

worth as part of the financial reset

my predecessor was part of

overseeing and I am convinced where

they contribute to the NHS improving

the NHS provider sector in proving

its financial sector during 16-17 to

the extent commented on by the

committee. I think it is fair to say

that because of the sustainability

and transformation fund which needs

to be acquired there are different

from the underlying position of our

most challenged trusts and the

imbalance between the income and

expenditure. Those things are

different. The remedy is necessarily

there which needs to be different

and it's fair to say there are more

challenged trusts which will need

support over a longer period of time

than the quarter by quarter approach

the sustainability and

transformation fund, on the point of

control totals they were set on a

consistent basis across the NHS in

2016-17 and were meant to create an

incentive for incremental

improvement. A number of trusts have

control totals which are deficits

and that reflects the fact that you

rightly highlighted a minute ago

that trusts with the biggest

problems will take a number of years

to bring finances back. It would be

unrealistic to set a success

criterion of moving into surplus in

any of time so they reflect

intermittent improvement which takes

me to the third part of your

question which is whether the

financially challenged trusts

remains of them all in all its parts

and while I am convinced genuinely

convinced that in 16-17, 17-18 and

looking into 18-19 the resume of

control totals, the sustainability

and support funds and the package of

measures that we help trusts with is

right, I think in some areas and I

would perhaps highlight the rate of

interest paid on loans for cash

support to our most challenged

organisations which is currently

running at 6% as opposed to the 1.5%

which is levied on other

organisations that are in the

capability of accepting their

control totals, I do think going

forward we should have a look at

that as part of a financial review.

I think there's a general support,

speaking on behalf of my colleagues,

that looking ahead the review that.

We agree you should reward financial

mismanagement but 6% seems a high

penalty.

I agree with everything

which has been said, just to be

clear, getting into financial

special measures is not how big is

your deficits, it is about

management and the trusts we are

most concerned about are the ones

where you see rapidly rising

projected deficits because that

cannot be about underlying

structural questions, if you have an

underlying structural question you

should know what it is and be able

to cost it. It's those ones where

you see the deficit projection

changing month-to-month that we have

concerns about. We agree with Ian

that the regime which was put in has

achieved a lot and we also agree

that going forward there were

elements including the interest rate

question that we will want to review

as to whether that is the right

mechanism going forward. As the

report sets out we are committed to

the STF is a funding mechanism for

the next financial year and we will

have a choice about whether we

continue with that regime or whether

we use that money in a different way

and now is right time to reviewing

that.

It's bit like the current

trends with kids for slime, it moves

would have it is needed any good the

way. It doesn't stick. THEY TALK

OVER EACH OTHER This is supposed to

transform services which were used

to stop, to fill gaps.

Explicitly we

used the resources to tackle the big

challenge we had in 15-16 around

where the provider deficit had got

too and it was a mechanism that was

designed to incentivise exactly what

happened which was for those

deficits to come down. The question

as I say is whether that regime

which achieved an enormous amount

across the last financial year and

in this financial year is exactly

the right regime going forward is a

question

INAUDIBLE

.

The report itself from NAO and I

caught the sharp decline in

financial position is halted.

Incentivise the most trusts to

improve financial discipline. We

agree.

But whether it transformed it

is another matter.

As NAO also see

effective transformation takes time.

That is the point. I will bring in

Bridget Philipson.

On that point, in

terms of how the funding is being

used, the fact that 40% of that

funding is being used to create or

increase surplus in trusts, is that

effective use what happens at the

end of the

net off deficits against surpluses.

In terms of system level stability

in makes no difference at all.

That

is not what the patient will be

concerned about.

The question which

is one of the things we will want to

look at is what behaviours you are

creating at trust level. To be

exactly in line with the NAO report

and court, we do think the way we

use STF did incentivise greater

financial rigour both across people

who were in deficit and across

people who were in surplus but could

have been in greater surplus. We

think the evidence does support

that. I think this is the question

Ian was raising, whether that

remains the mechanism to incentivise

the right behaviours at trust level

is something.

I think NAO as is so

often the case but not always the

case got the recommendation is

absolutely right on this point. They

talk about the need for more...

I

don't think they will be swayed by

this flattery!

LAUGHTER

They talk about system incentives

and working, and the opportunity to

think about the deployment of the

STF funding in 2019-20 represents

such an opportunity which we will

take. But to 2018-19 we got a very

clear set of rules and allocations

set out for the sector as a whole

and that which we are putting out

emphasis on from the year ahead.

A

couple of things, you're not going

to make your savings target in this

year are you? I think that is right.

The forecast outturn is for 3.3

billion against, I'll try remember

if it was 3.8, 3.8 billion. There is

an underachievement this year.

Another thing, I'm not saying that's

necessarily bad but you need to be

realistic about what balance of

recovering and non-recovering will

likely turn out to be the case,

which you don't know at the moment I

think I am right in saying. And if I

might finish, I also think it's

worthwhile asking a question as we

come to the end of this programme

about how much damage they have

done. In other words particularly

the use of capital funding on the

recurrent case, admittedly those

capital findings may have been

slightly more than were strictly

required in the first place but

still there must have been quite

long periods of deferment of capital

spend. Are you going to take stock

of that? It might have been

necessary to do it but are you going

to take stock of that and understand

where that leaves you and what you

may need to do as a result?

Just on that last point about

capital, the report refers to the

review of underemployment is that is

a Robert Naylor led, which set out

an ambition for around 10 billion of

capital investment in the NHS over a

period of time. And that 10 billion

split roughly into 50-50 four

transformation of services and

picking up a backlog maintenance in

the system. The Chancellor set out

in the autumn budget the third share

as it were to come from direct

investment by government and we're

working through with individual

organisations how we can increase

that in particular. We are

undertaking a review of capital

flows and the Chancellor set out

briefly in his budget announcement

in particular to understand how at a

local level the decisions around

whether to maintain or use money

elsewhere to support day-to-day

operations, how they'll is just how

those decisions are taken and how we

look at the wave funding flows the

system and the incentives to guard

against that in the future. Work

just starting now.

Interesting it is

starting now when you have had a

couple of years Reading capital fund

revenues so we will be following

that as you will be not surprised to

hear.

Just returning to the

sustainability and transformation

funding, as was, would it be better

for trusts to have a greater degree

of security and certainty in the

system, rather than coming to quite

a late stage of the year and getting

to just, getting decisions as to

whether they are going to have an

ability to sort things out in the

long-term?

The way the regime works

is that those are set out

prospectively at the start of the

year and then it depends on how well

the trust us as to what we earn. I

don't think it is quite as you

describe it.

They could plan better

for the longer term if they had the

greater degree of certainty about

money they were to receive. You

would agree a controlled total, you

meet it and you get money for

meeting it and a bonus potentially

on top of that, is that an effective

means of funding services in the

medium to long-term?

In the medium

to long-term, we are looking to move

more of the funding of the health

service a population basis where

different organisations within an

area then able to plan together for

the kind of why don't more profound

changes that they think are needed

to join up parts of their primary

community and hospital services. And

that is what is happening in the

first of the integrated care systems

across the country covering around

10 million people across England and

they are taking shared

responsibility for their STF and a

system controlled total, that is the

plan. And so that is incrementally

the direction we absolutely do want

to move on.

Will that include a

review of tariffs, in terms of

looking at procedures and how they

are funded? So where trusts would be

receiving less than the cost of the

procedure?

We have a two-year tariff

place and we will have decisions to

make about the tariff in 2019-20.

But at the same time, we are also

being pushed by many across the NHS

to make it easier to move money

around between different services

rather than the click of the

turnstile payment system which was

more orientated towards the problems

we were dealing with and having to

expand elective surgery to cut long

waits for care. I do think there are

a set of things going on in terms of

the urgent emergency care pathway

that have to be looked at. There is

a case for saying that some of the

funding implied in the

sustainability and transformation

funding, the STF, is probably

reflecting the underlying cost of

emergency care, that is the basis on

which it is allocated we need to

factor in. Equally, there have been

big shifts in the clinical pathways

for emergency care and at the

moment, the tariff system does not

adequately reflect those.

Specifically, as Ian said, the

headline increases we see in

emergency admissions, non-elective

admissions, if you look over the

last, over this year, to date, the

number of emergency admissions that

require a stay in hospital have been

going up by just over 1%, the number

of so-called emergency admissions

dealt with on the same day, half of

those in less than four hours have

gone up between 6-7%. Call them and

add emergency admission, they are a

new type of care and we have to make

sure the system funds efficient care

delivery for those kinds of

pathways.

So you are planning to

change the tariff system, and when

will trusts know the new tariff

system?

During the course of this

year, 18-19, we will set out

proposals together and we will

consult on them.

More specific than

that.

In the autumn.

We need to give

the NHS certainty.

Absolutely. So it

is the autumn?

In particular, it...

I'm just going to remind witnesses

about the time. If you are quick

answer in our quick questions, we

might be out of here by six o'clock.

The future of £109 billion of NHS

funding is not a quick question.

No,

absolutely, but if you can set the

questions, we can ask the questions

quickly and we have a chant of at

least scratching the surface.

At the

risk of delaying hearing, this is a

hugely complex area. The law

requires quite a lot and we comply

with that. And that builds a level

of uncertainty into trust finances

by the nature of it. We do

understand that. There are things we

can do which Simon and Ian described

which create more certainty, but it

does not answer the entire original

question. We will for the

foreseeable future be running a

Commission provide a system which

has some of those uncertainties in

it.

There are certainly changes

afoot under the radar.

Is the

current funding system of opaque and

often unfathomable even for people

who love Witney NHS for a long time

and who currently work in the NHS? A

lack of certainty and you miss your

controlled total, what happens?

In

terms of the refresh on the guidance

we have set out, Ian and I for next

year, we have been very clear and

transparent about what we are asking

of the NHS.

I don't think trusts

would accept there is transparency.

You have picked up uncertainty about

the 2018-19 arrangements.

I am

talking about what has gone on

previously, you agree you are

uncertain as to what you will

receive, if you get a bonus on top

of that. That seems a rather

perverse way.

We could have just run

that STF to the normal commissioning

system. The judgment we took was to

give NHS improvement weavers over

that 1.8 billion so as to give them

the ability to have those trust

specific conversations and that has

been sent via improved financial

discipline. As Ian and I have also

said, we don't think that is the

mechanism in perpetuity that we

would want to continue.

As the

report sets out, the combined income

for trusts in 2016-2017 is just over

£8 billion. Of the 1.8 billion of

STF, one quickly was paid out

essentially as planned and the

uncertainty element was around half

a billion -- one quarter. So half a

billion is a degree of risk which

should not be too difficult to

manage.

Why has the fund fails to improve

performance of acute services?

Why did everybody not only 30%... Is

that what you mean?

It is

sustaining, but not really

transforming.

Yes, I agree with

that.

You talked earlier about the

NHS...

As I said before, we took a

very explicit decision in July 2016

that the level of deficits and

financial control that we had seen

in 2015-2016 was a big problem. And

that we would focus our efforts on

that. And we did it very explicitly.

So did we emphasise reintroducing

financial rigour and stabilising

trust finances? Yes, we did. Does

that have a consequence for some of

the transformation things? Quite

clearly, whenever we do these

things, we have that consequence.

And we did that...

Did you

overpromise on the transformation?

I

might leave others to comment. But

as the report notes, quite a lot of

progress has been made through SDP

is, variable.

That does not mean

transformation. That is what we were

there to do. And Simon will add in

some of our leading areas, there are

some genuinely original approaches.

We do not see that across the

country as a whole which is where we

need to get to. But well we took

some very explicit decisions to

prioritise stabilisation, there was

also quite a lot going on on the

transformation.

We will move on to that.

You talked

about the contribution the NHS have

made towards the UK targets by way

of spending reduction, but that

comes to the point that all of this

comes at a cost, not simply a

financial cost, but the impact on

patient care, the impact on the A&E

waiting, the length of time people

will be on waiting lists, the

ambulance backlogs, the time it

takes to see your GP. The NHS has

had to make the contributions, but

that has not just been at a

financial cost service, it has been

at a direct cost to patients and

those who need the NHS.

Well, we discuss this last January.

I think those comments, we aired

that issue and I have been very

upfront about that point since then.

I think Sir Angus in his comment on

this report, his press release, made

a wise statement when he said, the

public purse may be better served by

a long-term funding settlement that

provides a stable platform for

sustained improvement. I think that

is why the Health Secretary also has

been arguing for a funding

settlement.

On the quality side, certainly what

the CTC has found is not a drop in

the quality of service provided by

the NHS. And ratings have been going

in the other direction. And the

impression on of us would want to

leave if anyone is that the basic

quality of care has in any way been

sacrificed, there is a huge quantity

of effort into that and the NHS has

responded extremely well. I would

not deny of course there have been

consequences around some of the

targets, but in terms of quality of

care...

The access targets are

clearly under pressure and

important, but when it comes to the

quality of cancer care, 7,000 more

people are surviving cancer now than

would have been the case three years

ago. When it comes to mental health

services, we have got a lot of work

ahead of us, but access and the

range of services are clearly

improving in many important areas.

When it comes to major trauma, the

fact is you are 25% more likely to

survive if you are knocked from your

motorbike and taken to a A&E

department now than would have been

the case five years ago and we see

many other examples of that.

Clinical quality of care has been

and it is improving.

And as we have

repeatedly seen for different

service areas, there is also a

growing demand in all those areas

and that is one of the challenges.

Before we move on, I just wanted to

asked about this issue of the loans,

the high interest rate for the

struggling trusts, is that any real

prospect of those paying back the

loan, have you a secret plan to

convert it to a

So, the 6% rate which we have

touched on already, as part of the

finance reset moment in 2016.

The

yes, yes...

Way in which it works,

trusts in special financial

measures...

The question was, you

think those that... Will they

realistically be able to pay back,

the struggling ones, will they

realistically be able to pay back?

Two trusts have exited financial

special measures, refinancing at a

lower rate as part of the incentive

to sign up to a recovery plan, and

then deliver it. Of the 12 trusts

currently in financial special

measures, eight who have shown at

least three months worth of

improvement against the plan are now

being financed at a lower rate, and

only four still attracting the 6%

rate for new borrowing.

Meat back as

as we have said, it is something we

will review.

Is it working?

If we

look at the amount of distressed

loans given to some of our largest

trusts, in the hundreds of millions

of pounds, at that level, as part of

a look at this that we have

committed to, it would be absolutely

right to consider the rate of

interest and the nature of the

financing. When trusts effectively

need the financing so that they can

pay staff and pay their bills.

Yes.

I think it is a legitimate question

about the ability to repay the

principal as well as the interest

rate, I don't think people enter

into those loans without cause, and

I think we need to have that

conversation that we all committed

to doing.

This only affects at trust

level and system level, the amount

we raise in interest... It is

robbing Peter to pay Paul.

It was

introduced as part of that package,

to try to create the right incentive

for individual trusts.

It seems to

be working, except those...

On the same point of robbing Peter

to table, will you have trusts --

where you have trusts not meeting

their transfer targets, they are

fined by the clinical commissioning

groups, in the case of my trust,

which is in financial special

measures, that will add almost 10

million on to the 60 million

deficit. Given that, how do you see

finding those sort of hospitals as

being either transformative or

sustainable?

That is why we are not

doing that.

You are.

We have said

that, the bulk of fines were waved,

this year, for trusts who are in

receipt of the exceptional control

total, and next year from the 1st of

April, are essentially all, except

for a very small number of items

which don't include the ones you

mentioned, they will be waived for

trusts in receipt, who signed up for

control totals, so that is the fact

of the matter.

How has that been

communicated to the clinical

committee group? North Staffordshire

have budgeted in their budget for

next year, to receive those fines,

as part of... For the missed

Accident and Emergency...

Well

then... Well then, they need to

study the 18/19 refreshed planning

guidance and indeed, the draft

consultation on the amendments to

the NHS standard contract, both of

which make the point that I have

just set out clear.

Excellent, thank

you.

It seems to me that key to both

sustainability and transformation of

the NHS is the success of the

integrated care model, now this

involves a whole load of people

working together, GPs, pharmacies,

community beds, acute services,

social care services. When we tried

this in West Sussex, western Sussex

Hospital trust, only one of those

parties signed up to move to an

integrated care model. So the change

management of these organisations

working together is massive. And

these are organisations that are not

known for dealing with change

management challenges in the best

way, so what mechanisms do you have

to make sure that that key to the

success is one that you can use.

I think it is absolutely right that

we need to integrate services, that

is something that is increasingly

recognised right across the NHS. We

have our role to play in helping

that happen, so I think it is

absolutely right that working with

colleagues in NHS England, we have a

system control totals with the ten

integrated care systems that are

likely looking to go live on the 1st

of April, and that will give them an

opportunity to respond to new models

of patient care, with new financial

incentives, incentive to collaborate

and work together, rather than to

compete and protect different

budgets. I think that will be

incredibly helpful. It is

interesting that in addition to

those ten, there is enthusiasm from

across the country about joining in

and participating in integrated care

systems going forward. With

colleagues again in NHS England, we

have invited patches of hospitals,

community services, mental health

providers and commissioners that

want to go on this important

integration journey to apply to us,

and then we will do what we can to

support them in that. I think it is

also fair to say that we are looking

at the support that NHS England and

NHS improvement give because it is

really important that as the

regulators of our respective sectors

that we are working together to

support integrated care.

We will

come onto this later, something we

want to talk about is the role of

the regulators and how you integrate

nationally, that is certainly an

issue. Going back to Bridget

Phillips, and then some of these

issues. More broadly, how do we

shift the NHS from the short-term

survival we are talking about,

getting through financially, to some

of the longer term transformation

that we need to see? How do we move

away from the short-term is, to some

long-term challenges that we face?

-- short termism.

We need to do both

at once, the short-term needs

attending to as much as future

proofing and to be here and now

about it, the amount of effort that

has been brilliantly going on across

the NHS even over the course of the

last week with the appalling weather

in different parts of the country,

we have seen that, I publicly

praised staff in Sunderland on

Friday, for having come in and

stayed overnight in the hospital to

be there for the next day shifts,

and we have had issues with getting

staff into work, volunteers helping,

the army, the health services. The

health service has performed very

well indeed under these trying

circumstances, that does not happen

by accident, that is the consequence

of a lot of focus by ward nurse

managers, clinical directors,

hospital Chief Executives, and...

We

acknowledge that.

I don't want to

decry the operational realities.

How

can these longer-term challenges be

used to address the short-term

challenges, we talk about moving

care out of hospital into the

community, achieving it is far more

difficult, will it deliver savings,

what are the savings that can be

delivered, are they sufficient?

There are some tensions and

trade-offs, of course there are, but

in those parts of the country that

have gone furthest on the service

redesign and integration agenda, we

see early signs that it is helping

moderate pressure on hospitals, I

think we will have a discussion

facilitated by the NA oh, with

yourself, on this topic, in the not

too distant future, on emergency

admissions pressure, and that has

shown some of the data for the early

Vanguard programme. -- NAO. In no

sense is this mission accomplished.

Part of the country are showing what

it looks like but big changes will

happen everywhere, one of the things

is while supporting individual GP

practices we must have much more

networking between practices on a 30

to 50,000 population basis, more

support into care homes and

Sunderland and the north-east have

done a good job in showing what that

looks like, we will be expanding the

funding for clinical pharmacist in

care homes, to help reduce the

emergency hospitalisation rate for

people there. We have a big

programme underway to join up what

is happening in community mental

health services and community

physical health services. At a

national level, we know what the

shape of this looks like but in

practice, it is going to be

different in West Suffolk than it is

in Sunderland, but that is what the

IACS, integrated care system, are

all about, driving the change with

hearts and minds of local people and

clinicians in each part of the

country. -- ICS.

Where do managers

grow more quickly than funding will

allow, what action can be taken to

manage some of the demand?

For next

year, we said that certain things

cannot be used as a balancing item,

NHS England board publicly in

November and then again in February

said that looking for Rafael would

do next year, we are ranked, a

series of reality is that the NHS

had to get right. First, acknowledge

that services are being delivered

which are in a sense and funded, and

that is why the extra money for next

year, we have allocated just over £1

billion to both the trust provider

sustainability fund and the

equivalent fund deficit CCG 's.

Second, we said that funding

realistic levels of activity growth

next year is going to be important,

and we will kick the tires more

vigorously between NHS England and

NHS improvement on what those

capacity plans look like in every

part of the country. Thirdly, we

said, we did not see where there

were financial pressures they should

be balanced on a bag of mental

health all cancer care of primary

care services, and went further and

said that we were making it a

requirement that every CCG next year

increases mental health spending

faster than its overall funding

growth, and that will be subject to

independent external audit.

Fourthly, we are looking to expand

the amount of routine surgery that

is being funded in the NHS next

year, and lastly, we said that the

much deserved pay rises for NHS

staff would have to be funded