PAC tells Government it is time to start shifting NHS funding to general practice

The Government and NHS England should review NHS funding processes so that they align with the ambition to shift care out of hospital, a group of influential MPs has said.

MPs from the public accounts committee (PAC) said that the ambition has ‘stalled’ due to a lack of ‘fresh thinking’ and ‘decisive action’ within NHS England and the Department of Health and Social Care.

In a report on NHS financial sustainability published today, they recommended that NHS England should ensure that, year on year, a ‘greater proportion’ of its funding is spent in the community, including general practice, ‘in line with its own policy ambition’.

They also warned that, while the Government’s forthcoming 10-year plan will be ‘essential’ to the health service’s recovery, senior health officials ‘seem to be unambitious’ when it comes to taking the steps to begin to implement it.

Expected in the spring, the 10-year plan will be ‘underlined’ by a shift from ‘hospital to community’, with plans to deliver ‘neighbourhood health centres’ where GPs work under the same roof as district nurses, physiotherapists, health visitors and others.

But the report found that this ambition ‘has stalled’. In questioning both DHSC and NHS England, the committee found that officials ‘do not seem ready’ to prioritise this shift.

The report said: ‘NHSE’s long-held ambition to move more care from hospitals to the community has stalled. There would have been more investment and progress in mental health and community services, particularly GP surgeries and dental services, in 2023/24 had NHSE not redirected funding to prop up the day-to-day spending of local NHS systems.

‘Despite carrying out 15% more elective activity compared to before the pandemic, the NHS is less productive overall once the activities of mental health trusts, community trusts and GPs are considered.’

The MPs also said that NHS England’s payment mechanisms can mean that local systems do not receive ‘financial recognition’ when they prioritise ‘hard-to-reach’ patients.

They also highlighted ‘perverse’ incentives around vaccination funding for GPs which could be seeing more deprived areas ‘losing out’.

It added: ‘GP surgeries receive a payment for every child vaccination. This vaccination funding mechanism favours areas where parents are more willing to inoculate their children, while areas with higher levels of vaccine hesitancy, which may be more deprived areas, receive less funding and therefore have fewer resources to carry out much-needed activities such as outreach and education, potentially leading to even fewer patients being vaccinated in those areas.

‘NHSE should review current payment systems and processes to ensure they incentivise local systems to work with those most in need of help.’

Committee chair Sir Geoffrey Clifton-Brown said that ‘truly fresh ideas’ and ‘radical energy’ are needed to turn the situation around.

He said: ‘The current Government has told the public that the NHS is broken. This will not come as news to NHS patients, nor to its hard-working staff across the country.

‘Nor indeed does it to this committee, which has long warned of the systemic issues plaguing the NHS, issues which the Government has transformative ambitions to address.

‘The evidence given to our inquiry exposes the perennial weaknesses with which those scrutinising this country’s health systems are now very familiar.

‘We therefore have a simple message for those senior officials responsible for delivery. Truly fresh ideas and radical energy must be generated to meet the scale of what is required – on community healthcare, on prevention, on digital transformation.’

But NHS England said that the report contains ‘basic factual inaccuracies’ and a ‘flawed’ understanding of financial processes.

An NHS England spokesperson said: ‘The report from the PAC contains basic factual inaccuracies and a flawed understanding of how the NHS and the Government’s financial processes work.

‘While NHS productivity is now improving at double pre-pandemic levels – far from being complacent, NHS England has repeatedly been open about the problem and the actions being taken to address it, including in the December public board meeting, and we will be publishing further improvement measures later this week in planning guidance.

‘Reform is part of the NHS’ DNA and has ensured performance improvements for patients in the past year, including innovations such as virtual wards – despite the huge challenges the NHS has faced, including capital starvation, unprecedented strikes and a fragile social care sector.

‘Lord Darzi’s report was clear many of the solutions can be found in parts of the NHS today, and we are working closely with the government to drive this innovation forward as we develop the ambitious 10 Year Health Plan to build an NHS which is fit for the future.’

A Department of Health and Social Care spokesperson said: ‘We have been consistently clear that fixing the broken NHS and ensuring it is fit for the future requires urgent and radical reform. 

‘This will be a challenge, but health leaders in the NHS have said they will meet this task, and we will work with them to deliver it as part of our Plan for Change– as we shift healthcare from hospital into the community, from sickness to prevention and from analogue to digital.’

The BMA said that the report’s recommendations around allocating more funding to services in the community, including general practice, and improving NHS financial planning, make ‘absolute sense’.

BMA council chair Professor Phil Banfield said: ‘Allocating more funding to the community and giving local systems greater control over how that’s spent, for example, is something the BMA has long called for to help prevent ill health and avoidable, often expensive hospital treatments.

‘Continuity of care in general practice reduces hospital admission, morbidity and mortality. When it comes to increasing the amount spent on prevention, including specifically public health services, the report fails to identify additional central funding that would be needed to achieve this, while there is an imperative to maintain elective and emergency services in parallel in a period of transformation. 

‘This report highlights the importance of holding the Government and NHS England to account, and making sure every penny is well-spent, both in the NHS and on wider population health initiatives.’

Nuffield Trust senior policy analyst Sally Gainsbury said that the report highlights how ‘dysfunctional’ budget setting in health and social care has become.

She said: ‘One area where the potential for savings is at particular risk of optimism bias is in the imagined gains from shifting care from hospital to community settings.

‘As politicians deliberate the forthcoming 10 Year Health Plan, they should be mindful that simply enforcing a target to spend more on care closer to home will not be enough without leadership and clarity over what such a shift will mean for patients.’

Director of policy at The Health Foundation Hugh Alderwick said that the report highlighted ‘short-termism’ and ‘dysfunction’ in financial planning for the NHS.

He said: ‘Ambitions to develop new ways of delivering care, improve the NHS’s ailing infrastructure, and boost spending on preventive services repeatedly get crowded out by day-to-day pressures.

‘While it might be tempting to blame officials and accounting rules, the root causes of these problems are political. Pressures on the NHS increase each year – for instance, as the population ages and wages and other costs grow – meaning government investment needs to increase just to stand still.

‘The question for the new government is what package of investment and policy change they will offer the NHS to help achieve these ambitious productivity targets – or even get close to them.’

GPs have also been urged to share ideas for how to ‘fix’ general practice in order to shape the 10-year plan.

The 10-year plan, plans for which were announced over the summer, will be informed heavily by Lord Darzi’s recent investigation which said increased general practice funding should be a ‘fundamental strategic shift’ for the NHS.

Writing in Pulse when the consultation on the plan was first announced, NHS England primary care director Dr Amanda Doyle said that there is a ‘real sense of hope’ as this new Government is committed to shifting more NHS resources into primary care.

But the Prime Minister has previously said that there will be ‘no more money without reform’, as he pledged the ‘biggest reimagining of our NHS since its birth’ following the publication of the Darzi review.