Statement to Parliament: NHS funding

Mr Speaker I wish today to make a statement about the future of our NHS, one that I hope everyone in this House will welcome. In October, NHS England and its partner organisations published an ambitious Five Year Forward View which was welcomed across the political divide. Today I wish to announce how the government plans to implement that vision.

Pillar 1: strong economy

Our response has 4 pillars. The first pillar is to ensure we have an economy that can pay for the growing costs of our NHS and social care system: a strong NHS needs a strong economy. Some have suggested the way to fund extra cost pressures is through new taxes including on people’s homes. But through prudent economic policies, the government can today announce additional NHS funding in the Autumn Statement without the need for a tax on homes. This funding includes £1.7 billion to support and modernise the delivery of frontline care, and £1 billion of funding over 4 years for investment in new primary care infrastructure. All possible, Mr Speaker, because under this government we have become the fastest growing economy in the G7. The NHS itself can contribute to that strong economy in a number of ways. It is helping people with mental health conditions get back to work by offering talking therapies to 100,000 more people every year than 4 years ago. But the NHS can also attract jobs to the UK by playing a pivotal role in our life sciences industry. We have already attracted £3.5 billion of investment and 11,000 jobs in the last 3 years, as well as announcing plans to be the first country in the world to decode 100,000 research-ready whole genomes. Today I want to go further by announcing we are establishing the Genomics England Clinical Interpretation Partnership to bring together external researchers with NHS clinical teams to interpret genomic information so that we go further and faster in developing diagnostics, treatments and therapies for rarer diseases and cancers. Too often people with such diseases have suffered horribly because it is not economic to invest in finding treatments: we want the UK to lead the world in using genetic sequencing to unlock cures that have previously been beyond our reach.

Pillar 2: new models of care

The second pillar of our plan is to change the models of care to be more suited for an ageing population, where growing numbers of vulnerable older people need support to live better at home with long term conditions like dementia, diabetes and arthritis. To do this 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. Some have argued that to do this we need to make clinical commissioning groups part of local government and force GPs to work for hospital groups. Because this would amount to a top down reorganisation, we reject this approach. We have listened to people in the NHS who say that more than anything the NHS wants structural stability going forward and even if others don’t, we will heed that message. We have already made good progress in improving out of hospital care. This year all those aged 75 and over have been given a named GP responsible for their care, something that was abolished by the last government, and from next year not just over 75s but everyone will get named GPs. Three and a half million people already benefit from our introduction of evening and weekend GP appointments which will progressively become available to the whole population by 2020. And the Better Care Fund is merging the health and social care systems to provide joined up care for our most vulnerable patients. Alongside this, this government has legislated for the first time ever on parity of esteem between physical and mental health. But to deliver world class community care we will need much better physical infrastructure. So today I can announce a £1 billion investment fund in primary and community care facilities over the next 4 years. This will pay for new surgeries and community care facilities in the places where people most want them: near their own homes and families. These new primary care facilities will also be encouraged to join up closely with local job centres, social services and other community services. Additionally from the £1.7 billion revenue funding we are also announcing, we will make £200 million available to pilot the new models of care set out in the Forward View. To deliver these new models we will need to support the new clinical commissioning groups to take responsibility with partners for the entire health and care needs of their local populations. So as well as commissioning secondary care, from next year they will be given the opportunity to co-commission primary care, specialist care, social care through the Better Care Fund, and - for the first time if local areas want to do it - public health. The NHS will therefore take the first steps towards true population health commissioning with care provided by accountable care organisations.

Pillar 3: innovation and efficiency

A strong economy and a focus on prevention are the first 2 pillars of our plan. The third pillar is to be much better at embracing innovation and eliminating waste. We are making good progress in our ambition for the NHS to be paperless by 2018, and last month the number of A&E departments and ambulance services able to access summary GP records exceeded a third for the first time. From next spring, everyone will be able to access their own GP record online. But today I want to go further. £1.5 billion of the extra £1.7 billion revenue funding will go on additional frontline activity – but to access this funding we will be asking hospitals to provide assured plans showing how they will be more efficient and sustainable in the year ahead and deliver their commitment to a paperless NHS by 2018. Mr Speaker we also have to face the reality that the NHS has often been too slow to adopt and spread innovation. Sometimes this is because the people buying healthcare have not had the information to see how much smart purchasing can contain costs, so from next year CCGs will be asked to collect improved financial information, including per patient costing. But the best ways to encourage investment in innovation is a stable financial environment. So I can today announce that this government, in collaboration with NHS England, will give local authorities and clinical commissioning groups indicative multi-year budgets as soon as possible after the next Spending Review. We expect that NHS England and Monitor will follow this by modernising the tariff to set multi-year prices and make the development of year of care funding packages easier. Mr Speaker, the NHS also needs to be better at controlling costs in areas such as procurement, agency staff, the collection of fees from international visitors and reducing litigation and other costs associated with poor care. I have announced plans in all these areas and we will agree the precise level of savings to be achieved through consultation with NHS partner organisations over the next 6 months. That will lead to a Compact signed up to by the department, its arm’s length bodies and local NHS organisations with agreed plans to eliminate waste to allow more resources to be directed to patient care.

Pillar 4: culture

The final pillar of our plan is the most important and most difficult of all. We can find the money, we can support new models of care, we can embrace innovation but if we get the culture wrong, if we fail to nurture dignity, respect and compassionate care for every single NHS patient then we are betraying the values that underpin the work done every day by doctors and nurses throughout the NHS. We have made good progress since the Francis report, with a new CQC inspection regime, 6 hospitals turned round after being put into special measures, 5,000 more nurses on our wards, the MyNHS website and 4.2 million NHS patients asked for the first time if they would recommend to others the care they received. But in the next few months we will go further, announcing new measures to improve training in safety for new doctors and nurses; launching a national campaign to reduce sepsis; and responding to recommendations made in the follow-up Francis report tackling issues around whistleblowing and the ability to speak out easily about poor care.


Mr Speaker, under this government the NHS has, according to the independent Commonwealth Fund, become the top-ranked healthcare system in the world. In 2010 we were seventh for patient centred care and we have now moved to top. Under this government, we have also become the safest healthcare system in the world. But with an ageing population we face huge challenges. How we prepare the NHS and social care system to meet those challenges will be the litmus test of this government’s ambition to make Britain the best country in the world to grow old in. We are determined to pass that test and today’s 4 pillar plan will help us do just that. Our plan will need proper funding backed by a strong economy, so I welcome yesterday’s comment by Simon Stevens that when it comes to money “the government has played its part.” But we also need ambitious reforms to the way we deliver care, focusing on prevention, innovation and a patient-centred culture that treats every single person with dignity and respect. Proper reforms not as a substitute for proper funding but as condition of it. A long term plan for the economy. A long term plan for the NHS. I commend this statement to the House.
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