Government's first 100 days: Treasury's fingerprints are all over health policy

After 100 days in office, the government’s plans for the NHS are beginning to take shape.

Three major themes can be discerned and within each there are real tensions to resolve.

• Executive Summary: The government’s first 100 days

Controlling spending and improving quality

Ministers have acted quickly to make clear that the NHS must bring spending into line with available funding while also continuing work to improve the quality of care.

Actions on spending include controls over agency staffing costs and the use of management consultants alongside advice from Monitor and the NHS Trust Development Authority on how providers should seek to reduce ballooning deficits. These actions reflect the government’s frustration at the inability of the NHS to live within its means, even though it has received greater protection than other public services.

Actions on quality include moves to extend seven day working in both primary and secondary care, work on safe staffing through NHS England, and new arrangements to improve patient safety. The plans for seven day working raise the prospect of difficult negotiations with the British Medical Association over changes to the consultant contract and will require additional investment.

‘Plans for seven day working raise the prospect of difficult negotiations with the BMA’

Plans to extend transparent reporting of information about performance in different parts of the NHS have been received more favourably, both as a means of informing the public and of stimulating providers to improve performance.

The key tension here is how to reconcile spending controls with quality improvements. Jeremy Hunt is surely right to argue that good quality care will often cost less by reducing errors, but it is not clear that the potential savings will offset increased costs elsewhere.

It is also implausible to expect the health secretary to reduce his personal commitment to quality and safety under pressure from the Treasury to reinstate financial discipline.

Tightening the grip on the NHS and devolving decision making

Ministers have tightened their grip on the NHS to control spending.

At the same time, they have expressed a desire to see improvement happen from the bottom up and to give some areas of the country much greater responsibility for public services including health and social care under the leadership of the chancellor.

Mr Hunt set out his personal vision in a major speech at the King’s Fund in July where he called for more emphasis on “self-directed improvement” in place of targets and money as the main way of bringing about improvements in care.

‘While the government’s commitment to devolution is not in doubt, there are obvious risks’

The experience of areas such as Manchester and Cornwall will be watched closely to see whether devolution really does lead to improvements for citizens and users.

While the government’s commitment to devolution is not in doubt, there are obvious risks when further deep cuts in public spending are in prospect.

As recent debates on the Cities and Devolution Bill in the House of Lords have shown, it is also not clear how devolution will be squared with current arrangements for accountability and regulation in the NHS which lead back inexorably to Whitehall and Westminster.

The tension between central control and local decision making was built into the design of the NHS, and the pendulum has swung back and forth since 1948.

The prospect during the current Parliament is that centralisation and devolution will co-exist uneasily with different arrangements emerging in different areas. Frustration at continuing centralisation may fuel interest in devolution but equally discomfort at having to make difficult and unpopular decisions about the use of scarce resources may result in devolution being perceived as a poisoned chalice.

Giving priority to prevention and cutting public health budgets

Ministers have added their voices to those of the national bodies that produced the NHS Five Year Forward View to reiterate the need to give greater priority to prevention, particularly by tackling obesity among children. The credibility of this commitment was undermined by the decision to cut £200m from local authority public health budgets in 2015-16 as part of a package of public spending reductions announced by the chancellor shortly after the election.

‘Ministers will look to the NHS to use its resources to compensate for cuts in unprotected budgets’

In this area, as in the growing pressures on social care, there is every likelihood ministers will look to the NHS to use its resources to compensate for cuts in unprotected budgets.

The tension is how to do this without accentuating financial pressures within the NHS.

Without adequate and sustainable funding for public health there is little prospect of moderating the demand for healthcare arising from the growing burden of illness in the population.

Who is pulling the strings?

The fingerprints of the Treasury are highly visible on the government’s health policy, not surprisingly in view of the emphasis on deficit reduction and spending controls.

How current tensions are resolved may rest ultimately on the prime minister and his role mediating between the Department of Health and the Treasury when patient care comes under pressure.

The outcome of the next general election may depend on whether and how he intervenes.

Chris Ham is chief executive of the King’s Fund