does £1.7bn NHS funding represent value for money?


The chancellor, George Osborne, has pledged an additional £1.7 billion for the NHS in England from next April to stave off a financial crisis in the service.

It comes in response to calls to boost funding and is on top of an additional £300 million for winter-related pressures.

But is throwing more cash at frontline NHS services really generating good value for money? We must remember that prevention is better than cure; targeting resources at primary and secondary preventative action can save up to £6 for every £1 spent.
The answer lies in where the money is being directed and from which other areas it has been taken.

In terms of the source, Mr Osborne said the additional funding would come from other budgets in the Department of Health, as well as savings from other departments.

As for the direction of the money, most is going on the frontline. King’s Fund chief executive Chris Ham, who pressed for the extra cash, warned of an “inevitable” financial crisis in the NHS without the money.

Simon Stevens, chief executive of NHS England, agrees that the money is needed “to sustain frontline NHS services”. And health secretary Jeremy Hunt confirmed that £1.5 billion of the total is for “additional frontline activity”.

That leaves £200 million for everything else, such as prevention, innovation and integration; which were the key goals set out in the Five Year Forward View. Mr Hunt said this money would go towards piloting the new models of care set out in the report.

Mr Stevens called the extra money a “vote-of-confidence” in the Forward View and is hopeful that it heralds the start of a transformation in the way care is funded.

The evidence from ministers was also encouraging. The health secretary said: “We need to focus on prevention as much as cure: helping people stay healthy without allowing illnesses to deteriorate to the point they need expensive hospital treatment.”

But is the £200 million enough? NHS England will face a £30 billion shortfall by 2020/21 if current trends persist, according to the Forward View. An extra £1.7 billion, the vast majority of which will be swallowed up by frontline services next year, is not going to meet that gap easily.

Will the government be able to find another billion or two next year? Even if it could, it’s still not enough if it’s not going towards preventing long-term conditions that are piling pressure on the NHS.

While £200 million is a start, more money needs to be diverted into ensuring the NHS can be funded sustainably in the future.

Without greater emphasis on preventing long-term conditions like diabetes and obesity, the funding gap will only widen.