Updated: While the CSR deal is a success, it is far from an unmitigated one

Before you judge the outcome of the Comprehensive Spending Review, consider this. The Treasury’s opening position was that NHS funding should be backloaded, arguing that the Conservatives’ manifesto commitments were for the end of the parliament. They probably expected to end up with growth spread evenly over the five year period. That the health secretary, after eight no doubt increasingly high pressure meetings with the chancellor, turned that round to a frontloaded settlement represents a very significant win for the NHS.

Mr Stevens played a brilliant hand in this high stakes poker game. His audacious and unprecedented warning to the Chancellor that the CSR negotiations were on track to fail the NHS was the equivalent of the Prussians arriving at Waterloo to secure Napoleon’s final defeat. Even to the end he was making his influence felt; letting it be known that he was due to appear on Friday’s Any Questions – a suitably high profile platform from which to express his reaction to the settlement.

The shine comes off

However, while the CSR deal is a success, it is far from an unmitigated one. Inevitably an examination of the small print begins to rapidly take the shine of next year’s significant funding increase.

The settlements for 2018-19, especially, and 2019-20 are among the lowest ever given to the health service. Mr Stevens can be expected to take the government on its word that a “strong economy” means a “strong NHS”, and push for further investment in the latter years of the parliament if the economic outlook improves.

We now know that the cost of NHS England’s £8.4bn uplift is a 21 per cent real terms cut to other areas of health expenditure over the same period. Just as the NHS England boost is front-loaded, so too are these cuts with £1.5bn cash (half the real terms total) being taken out in 2016-17.

The brutal reductions to the budgets of the NHS’s arms-length bodies may invoke feelings of schadenfreude among local service leaders. But they also have implications for the frontline as Health Education England chief executive Ian Cumming explained to HSJ.

”The plan to give local authorities the power to use council tax rises to fund social care is a partial solution at best”

Mr Stevens will not be able to put the frontloaded investment he has won to the use he originally intended; and the CSR does not pass all of the “five tests” he set for it.

The £700m real terms cut to public health are of particular concern. In two years’ time local authority public health spending will no longer be ring-fenced. With councils facing financial armageddon we could see the effective extinction of an effective public health service as budgets are raided. 

Uncertain central interventions like the planned childhood obesity strategy potentially giving local authorities greater regulatory powers seem a sticking plaster at best.

The £1.5bn increase in the two years to March 2020 for the Better Care Fund and the plan to give local authorities the power to use council tax rises to fund social care are partial solutions at best. Social care funding is very much unfinished business for this government and having crossed the Rubicon on local revenue raising, it is unlikely council tax hikes will remain capped at two per cent.

As chief executive of Central and North-West London Foundation Trust Claire Murdoch warns the hits to public health and social care risk leaving the NHS “a reactive, crisis-driven service.” Avoiding that might, ironically, see the NHS having to flow some of its hard won cash into public health and social care.

Returning to the black

The three NHS tests have been broadly passed, although Mr Stevens will have to remain at the top of his game to make sure the government’s seven day service ambitions can be recalibrated not to consume too much of his hard won cash.

When the Forward View was published, Mr Stevens hoped it would mark a new morning for the NHS. He did not envisage having to spend most of the first year’s funding allocation patching up the provider sector deficit.

”NHS organisations will require an even greater degree of political cover as they seek to build the future while continuing to survive the present”

The planned “transformation fund” has been renamed the “transition and transformation fund” and will have one purpose above all: attempting to return most providers to the black in 2016/17. Getting the service back on an even keel is, of course, essential; but it places a huge burden of delivery on 2017/18 when funding growth falls significantly.

NHS organisations will require an even greater degree of political cover as they seek to build the future while continuing to survive the present. At a reception for the Forward View Vanguard projects yesterday at Number 10, David Cameron promised to protect these “pioneers” from “arrows in the back”.

The direct support of the PM is welcome; it is just one of the many factors that will need to play in the NHS’s favour if it is to prosper through a period of change that will dwarf the Lansley reforms in their complexity, breadth of impact and importance.