NHS England allocates £560 billion of NHS funding to deliver NHS Five Year Forward View

The NHS England Board today has decided how the Health Service will spend its budget for the next five years, including the additional £8.4 billion real terms NHS funding growth announced in the government’s Spending Review in November.

The health service locally is being given a five year settlement so local health leaders in every part of the country can put services on a stable financial footing and develop robust plans to accelerate the redesign of care set out in the NHS Five Year Forward View.  In doing so it will enable improvements in primary care, mental health and cancer services across the country.  The plans show:

  • Spending on GPs and primary medical care services will grow in real terms at a higher rate than for other health services, with an extra 4%-5.4% per cent cash funding every year for five years. The primary medical care allocation formula is updated to account for changes in GP workload since the original ‘Carr Hill’ methodology was developed over a decade ago.
  • Every CCG will get real terms budget increase, with adjustments made so that extra funding for local health services is targeted at those parts of the country with the greatest health needs, where the population is growing rapidly, and where there are additional and historic pressures because of rurality
  • Mental health services will also see extra investment as CCGs are expected to use their extra funding to increase funding for local mental health services in real terms next year by at least the level of the CCG’s overall funding growth, and extra funding will be allocated from the national Sustainability and Transformation Fund.

Commenting on the decisions taken today, NHS England chief executive Simon Stevens said:

“Just over a year ago the NHS came together to produce the Five Year Forward View, charting a new direction for health, care integration, and sustainable funding. Having won the argument about the inescapable need to advance on all three fronts, today we back our plan with five year funding. Our aim is to relieve frontline service pressures in the here-and-now, while kick-starting the fundamental strengthening of primary care, mental health, cancer care and other major priorities.”

Specifically NHS England has today made NHS funding allocations for the period 2016/17 to 2020/21. These will:

  1. Stabilise performance and fund the Forward View

NHS England is establishing a Sustainability and Transformation Fund of £2.14bn for 2016/17. Of this, £1.8bn will be deployed on ‘Sustainability’ to stabilise NHS operational performance, and £340m for ‘Transformation’ to continue the Vanguard programme and invest in other key FYFV areas).

The Sustainability and Transformation Fund will grow from £2.1bn in 2016/17 to £2.9bn in 2017/18, rising to £3.4bn in 2020/21, with an increasing share of the growing fund being deployed on transformation including the FYFV’s New Care Models, and mental health parity of esteem.

The NHS England Board will make decisions on allocating the STF for 2017/18 and beyond in the light of place-based Sustainability and Transformation Plans to be developed by July 2016 across the NHS.

Today’s proposals therefore incentivise stronger collaboration between commissioners and providers through more aligned incentives for effective planning. The move is aimed at encouraging and supporting different parts of the NHS to move beyond the walls of individual organisations, shifting the focus of health care planning away from bricks and mortar towards building services around the needs of patients.

  1. Fund primary care, CCGs and specialised care

NHS England is allocating real terms funding increases for CCGs in every year to 2020, with firm allocations for the next three years and indicative allocations for the final two years. Following today’s Board decisions, individual CCGs will be notified of their resulting allocations in early January.

Disproportionately higher funding increases will be available for GP services and primary medical care than for overall CCG growth, with the ability for CCGs to make further investments on top of this using the co-commissioning option.

Growth funding for new specialised services is allocated for 2016/17 and beyond, partly to fund improvements in cancer care and other key services.

£450 million of new funding is being earmarked for services in Greater Manchester delivering NHS England’s support for the “DevoManc” partnership deal.

  1. Takes clear action to improve the fairness of NHS funding shares to help cut inequalities

Action is being taken to cut inequalities by improving the fairness of funding allocations to respond to unmet need.

First by ensuring next year for the first time that no CCG is more than 5% below their fair share funding, both in terms of their CCG-commissioned spending, and for the first time also taking account of their overall ‘place based’ population budget (combining primary, CCG-commissioned, and specialised care). Second, by factoring in the pressures facing CCGs with faster population growth. Third, by taking full account of inequalities in resourcing for primary medical care. Fourth, introducing for the first time a new inequalities adjustment for specialised services. Fifth, by factoring in the unavoidable pressures of rurality and sparsity, benefiting challenged areas such as Cumbria.