Reasons to be cheerful? Prospects for health policy in 2016


It would be easy to start 2016 in a mood of deep despondency, mostly driven by the dire financial situation of the NHS. It is inevitable that, whatever financial engineering talents are deployed, the NHS as a whole will finish 2015/16 with a record deficit of around £2 billion. The Comprehensive Spending Review settlement announced in November 2015 looked like more of the same – a bit of a bailout for the NHS in 2016/17 (mostly used to deal with this year’s deficit and mostly financed by raiding other Department of Health budgets like education and training, public health and capital investment) followed by three more years of near zero real terms growth. In addition, the social care settlement looked equally parsimonious, meaning even more pressure on healthcare spending, at a time when pay restraint and cost improvement programmes have cut pretty much all there was to cut.

So are there any reasons, as Ian Dury said, to be cheerful? I think prospects are not as black as they might seem, for four main reasons.

First, the Lansley reforms to the NHS were such an unmitigated failure that, paradoxically, they have created some breathing space for creative NHS reform to be led in and by the NHS itself. It is hard to believe that the new models of care now being piloted in the Vanguard programme, or the move toward health and social care devolution being spearheaded in Manchester, could have happened without the crisis of political confidence that Lansley caused. He may have left a legislative framework and organisational structures that are not fit for purpose, but that too, in a strange way, has produced all sorts of creative extra-legislative solutions. The moratorium on any further reorganisations, while probably not sustainable in the medium term, has forced people to think differently about how to secure reform. And all sorts of new organisational forms – GP federations, local care organisations, and the like – have begun to grow up in the meantime. We could be heading for the first era of NHS reform designed not in Richmond House but in NHS organisations around the country.

Second, there is a near universal consensus now that the health and social care systems have to be integrated. What “integrated” means, when they are funded and provided in very different ways, is not really clear, but the Berlin wall that has existed for forty years or more between local authority social care services and NHS healthcare services is simply collapsing under the weight of its own irrelevance to societal need. One of the few good points in Lansley’s reforms was the creation of Health and Wellbeing Boards, and the forum they provided for bringing health and social care decision makers together. The next step is being trialled most ambitiously in Manchester, but will soon mean more freedom everywhere to budget, plan for and deliver health and social care services together.

Third, the last thirty years of various experiments with commissioning, markets, competition, tendering, any willing provider, choice and the like are finally being consigned to the dustbin of health policy history. That does not mean that there is no place for contestability and challenge in healthcare provision, or for a commissioning function. But it does mean that such mechanisms are seen as a means to an end, not an end in themselves. The demise of Monitor (and its replacement by the rather differently oriented NHS Improvement) seems to signal an end to the obsession with contracts and tendering and the arrival of a more pragmatic approach to service reconfiguration. Everyone seems to now realise that competition and markets have proven to be about as useful in dealing with most of the big problems we face – urgent care demand, chronic disease management, wellness and fitness to work – as the proverbial chocolate teapot.

Finally, I don’t think many people in either the Department of Health or NHS England really think the financial settlement for the next five years will hold. Much may depend on how the wider economy performs, but the political consequences of five more years of fiscal austerity would be too much for any government to bear, especially as an election approaches. So expect a renegotiation, around 2017, based on the premise that the NHS has delivered it side of the deal – and government now needs to revisit its frankly barmy assumption that healthcare spending would fall as a share of GDP over this parliament. I doubt that means any change to the basic, tax-funded nature of most healthcare spending, but it does mean a move back to realistic assumptions about the trajectory of UK health spending – that it will be more like France or Germany, and less like Greece or Poland.

So, though the financial prospects still look pretty grim, there is certainly some scope for optimism about the coming year. After several years of relentless and pointless NHS reform and reorganisation, in which the voice of and needs of patients and the public were almost silenced, it seems that there is now an opportunity for NHS leaders to focus on what really matters again – designing and delivering health services to meet the needs of patients and the wider public. Happy new year!


About Author

Kieran Walshe is Professor of Health Policy and Management at Alliance Manchester Business School, and head of the health management group at Alliance MBS.

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