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Storm clouds on NHS funding horizon 1

Fundraising | Daniel Fletcher | 3 Dec 2009

The last month of the Noughties is looking to leave health charities in a high degree of uncertainty, despite positive indications that the recession is unlikely to get any worse.

One storm cloud on the horizon relates to NHS and statutory funding. The facts seem reasonably clear. A report from The King’s Fund and Institute for Fiscal Studies in July  demonstrated that the NHS would need to find £20 billion in savings from 2011-2014 in order to simply standstill. Half of charity funding comes from the statutory sector, some as contractual income from the NHS. A reduced NHS budget is bad news for charities.

A further blow was made in September when the health secretary, Andy Burnham, announced that preferred bidders for NHS funding would be other NHS bodies rather than “any willing providers” from other sectors, such as charities. This has gone on to cause growing concern from charities, resulting in a recent letter from ACEVO’s Stephen Bubb to the Chancellor, Alistair Darling, suggesting that charities could be the solution to cost savings and productivity improvements. Although this does miss the point about the priority of safe-guarding NHS jobs and appeasing health care workers’ unions for a health secretary.

This week, The King’s Fund released another report, Windmill 2009. The NHS response to the financial storm. Representatives from across the health economy spent a day in July working through scenarios of impending financial doom, and their behaviours and actions were analysed in the report to identify what should, and shouldn’t happen, when these scenarios become more like reality.

One recommendation is that NHS “Commissioners and providers need to grasp opportunities to work with the independent and third sectors, where these can make a contribution to innovation and improvement.” To do this, commissioners need to be more explicit about what they are trying to solve and the outcomes they want, rather than simply specifying the outputs, i.e. the products and services they need.

In return, independent and voluntary sector suppliers should find ways to help risk-averse commissioners handle some of the risks, and the challenges of implementation associated with commissioning new services.

The big question is whether this would or could happen? Instead, do health and social care charities need to see the writing on the wall, and batten down the hatches, to mix my metaphors?

Job losses and reorganisations will be on the way, such as those already taking place at Diabetes UK and Arthritis Care. Or, is this an opportunity to rely less on statutory funding, and invest in diversifying into more fundraising approaches as some parts of the economy grow in financial confidence.

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