Responding to COVID-19: insight, support and guidance
Just after the election, CIPFA concluded, in The Health of Health Finances, that additional upfront funding and new approaches would be needed if the NHS was to deliver to the Five Year Forward View. A consensus developed along those lines. The government recognises the issues and has taken some action in the November 2015 Comprehensive Spending Review and 2016-17 settlement. Meanwhile, policy developments, notably around integration and devolution, are promising but their benefits are likely to impact only in the medium to long term, leaving worrying gaps in the short to medium term. In More Medicine Needed? The Health of Health Finances Revisited, to be published shortly, CIPFA will examine the position now, and ask: what more needs to be done?
There are no certainties, but we believe there will be a shortfall of at least £5bn, quite likely £10bn and in the worst case as much as £16bn by 2020. That’s because we estimate that pressures on health by then will be in the range £35-40bn (compared with the government assessment of £30bn), and the savings achieved will be in the range £16-22bn (and it would be an exceptional and historically unprecedented performance to achieve the Government’s £22bn target). A gap of £13-24bn then remains, against which the government has promised £8bn.
Consequently there is a clear need for more action. The frontloading of promised financial support in 2016/17 and the planned increases in the Better Care Fund are welcome, but too modest. The effect of the actions to date is to maintain the focus on the short term, as illustrated in responses to the projected NHS overspends of 2015/16. Against that background, CIPFA believes that it is a leadership challenge as much as a financial challenge, and concludes that:
It is vital that those matters are addressed in the right way as part of the realistic long term planning which should form the core of the government’s thinking. Accordingly, CIPFA calls on the government to set up a commission which starts from the consensus that fundamental questions need to be asked of how the NHS can be adequately funded in the long term, and seriously examines the alternative options. We suggest the commission would have two key tasks:
 This would in large measure constitute a Government follow-on from the work of the Commission on the Future of Health and Social Care in England, known as the Barker Report, published in 2014, which came to conclusions which remain highly relevant. See The Kings Fund.
 The Barker Report recommended that ‘the government should plan on the basis that public spending on health and social care will reach between 11 and 12% of GDP by 2025’ without recommending a ‘golden ratio’ as such. A figure of 10% reflects the new reality that health and social care spending is set to fall to 8% of GDP under current Government plans.