1/14 NHS financial allocations for second half of the year released overnight. Thread of initial thoughts below. Probably of most interest to those steeped in, and fans of, the delights of NHS finances. But some potentially big issues depending on how this plays out.....
2/14 NHS frontline been waiting for allocations for some time, so good that they have finally arrived. There is a lot of complexity here. These allocations have been made at system level for the first time and they also include some detailed calculations on individual items.
3/14 Four specific areas of concern that we expect trusts to raise. First, some ambitious assumptions about recovering non-NHS income that will be a significant issue for a number of trusts who are a long way off from seeing their non NHS income return to pre-COVID levels.
4/14 Second, COVID-19 may hit differentially in a possible second wave, and if trusts experience significantly higher costs than expected, these may not be covered. We need details on how any emergency finance process, in event of localised second surges, will work if needed.
5/14 Third, non covid costs for 2H calculated by rolling over 1H costs and stripping out non recurrent items like Nightingale set up costs. Vital only non recurrent costs have been stripped out and that the covid related cost element of these allocations is appropriate.
6/14 Fourth, trusts will want more detail on exactly how the claw back of allocations will work if ambitious service recovery targets are not met and what flexibility there will be if those targets are not met for good reason. There is.....
7/14 There is very good progress on restoring services and activity volumes - trusts are going faster than they expected a few months ago. But we still think majority won't meet targets. Though that definitely won't be for want of trying!
8/14 Trusts telling us this morning that it will take them time to work out detail of what this means for them. Complex work needed to bring together income streams from within their system allocation, from other system allocations and from direct/specialised commissioners....
9/14 They also need to understand adjustments which have been made for costs which will be funded nationally in the second half of the year. There are some big shifts here - for example PPE costs and cost of some independent sector contracts now being borne locally
10/14 Initial, first off, reactions generally ones of concern that allocations look lower than expected & insufficient to cover expected costs. We understand NHS did not get all it asked for from Treasury and this will, by definition, affect size of frontline allocations.
11/14 NHS England and Improvement tell us that what initially might look like a large financial gap will close once trusts have accounted for all their full sources of income and the costs that will now be covered nationally. But we obviously need to be sure this occurs.
12/14 If financial gaps don't close, we risk trusts dialling back on what they're currently spending on service recovery / preparing for winter. This is the last thing we want. Vital that strategic intent and funding flows match each other. Patient care at risk if they don't.
13/14 NHS England and NHS Improvement have assured us that they will carefully consider any request from a system or trust that genuinely believes it has an insurmountable problem. This will need to be followed through if required.
14/14 Summary initial reactions. Lot of complexity. Significant concern allocations look inadequate. Hope, when detail worked through, large looking financial gaps won’t end up as big as they currently seem. Lot riding on detailed work over the next few days!
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