Summary

Despite a rescue fund worth £1.8 billion in 2016–17, the financial position of the NHS remains in a perilous state. The NHS is still very much in survival mode, with budgets unable to keep pace with demand. The Department of Health and Social Care (the Department), NHS England and NHS Improvement are too focused on propping up the system and balancing the books in the short term and have not paid enough attention on transforming and improving patient services in the long term. This short-term view was apparent over the winter when, despite early warning of a looming crisis, the Chancellor only announced additional funding in November. With trusts forecasting a deficit of over £900 million in 2017–18, the NHS still has a long way to go before it is financially sustainable.

We are disappointed that the Department’s lack of action means we have to repeat some of the same messages as our previous reports on the dangers of short-term measures used to balance the NHS budget and the risks of raiding investment funds to meet day-to-day spending. Despite our earlier warnings, the Department has not yet assessed the impact on patients or services of repeatedly raiding its capital budget to fund the short-term needs of the NHS. Local health bodies are quickly setting up new integrated care systems, which offer the potential for more strategic and long-term planning and better joined-up services for patients. But we are concerned that the witnesses could not clearly explain how accountability within these systems will work in practice or how they will improve the care that patients receive. The announcement to lift the 1% pay cap for NHS staff is welcome but we will be watching to see whether this will lead to better retention of staff. We also need to be clear that this is not robbing Peter to pay Paul.