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Let’s face reality. The NHS is on the brink.

A new junior doctor contract has been imposed without proper costing, planning or an equality assessment. Nursing bursaries have been withdrawn, despite the fact we are already in the midst of a ‘safe staffing’ crisis. Doctors are standing on picket lines or voting with their feet to pursue the ‘Australian dream’ of safe and fair working conditions.

The sub-plot to this headline, an equally concerning one, is the dire financial situation in the NHS. As recently as 2012/13, the NHS was functioning at an operating surplus of £592 million; we are now facing the reality of an estimated £2.5 billion deficit by year’s end. Take a minute and consider those figures. A £3.1bn financial swing from surplus to deficit in 3 years; numbers to make even the most financially imprudent of CEOs – or the Secretary of State for Health – wince.

The government blame the trusts, the trusts blame the locum agencies, the political parties blame each other, the Brexiters blame Europe and the mainstream media outlets seem to blame just about everyone except the Department of Health.

The problem is complex, multifactorial and needs to be processed and understood to be resolved. If this issue is not confronted quickly, we are facing what the cross-partisan Public Accounts Committee (PAC) described as a future “black hole” in the NHS finances.

The PAC reported that it was “unacceptable” for officials to blame the difficulties on “excessive agency costs”. While it is clear the £1.8bn NHS agency bill – encompassing clinical and allied staff – is incredibly high, the solution here is to recruit, retain and value permanent staff. The Government claims to support the free market ideology, they even promote it. They are, however, unwilling to accept that requiring doctors to work extra hours to fill gaps generated by poor workforce planning must be costed and remunerated appropriately.

The locum agency rate cap appears to have saved some money, primarily as a result of leaving many shifts unfilled and generating potentially dangerous staffing gaps in hospitals across the country. This news may delight Charlie Massey – the current government’s Director General of Strategy and External Relations  – who pointedly admitted to a rather bemused PAC that he felt the deficit was related to managers making their hospitals “too safe” by “overstaffing”.

Jeremy Hunt recently responded to these independent criticisms, some levelled from members of his own party, in an interview for the British Medical Journal. Despite months of extensive work on the subject, detailed analysis of the data, and the publication of a report suggesting that there appears to be no credible contingency plan, Mr. Hunt remains bullish. He stated that he believes the report findings to be “completely wrong” and assures the public “we have a very good plan”.

So where is the money going? Look no further than private finance initiative (PFI) payments.

The 2012 Health and Social Care Act opened the floodgates for the privatisation of the NHS. We have now built lots of shiny new hospitals, which look fantastic to cut a ribbon next to, but what is the long-term damage to the NHS here? How does £2bn in 2015 (£3,729 a minute), rising to £2.67bn annually by 2030 sound? PFI deals alone will cost the NHS £79bn over a 31-year period. This is just one of many examples of poor financial planning and short-termism that have preceded exponential -and potentially unnecessary – increases in spending.

So, we are overspending, right? Well put simply, no. The NHS has always haemorrhaged money, healthcare is expensive and spending practices can always be improved. The efficiency savings achieved in the previous 5 years have been unprecedented. Grassroots staff of all disciplines have gone above and beyond the call of duty to achieve these savings, which have now plateaued. Much of this valuable quality improvement was undertaken by dedicated staff – in unpaid time – for the love of their national institution; with little or no recognition for their efforts.

The single most important myth to debunk in this whole debate is that of persistent overspending.

The actual crux of the issue is chronic underfunding.

The Government remind us daily about their “record breaking investment in the NHS’. The government continually trumpet an additional £8bn in NHS funding. In reality, by next year the UK will only be spending 8.5% of GDP on healthcare – the Organisation for Economic Co-operation and Development (OECD) average is 8.9%; the UK is behind France, Portugal and the Netherlands in terms of comparative healthcare spend as a portion of GDP. Both the Economist Intelligence Unit (EIU) and the OECD have stated that the NHS is one of the lowest funded, lowest staffed healthcare systems in the world, as well has having one of the lowest ratios of hospital beds to population.

During 3 successive Labour governments, NHS spending was seeing a 4-5% real terms increase annually, whereas this spending has now been squeezed to <1% under the Conservatives.

Respected apolitical think-tanks (The King’s Fund and The Nuffield Trust) and healthcare economists (Appleby and the Barker Commission) have independently reviewed the NHS financial projections. They conclude that, even if Lord Carter’s proposed £5bn efficiency savings were somehow achievable and these were combined with £8bn of government funding, the NHS would still be £17bn short by 2020. Former Lib Dem MP David Laws has accused the Government of being disingenuous regarding the estimates. He claims that the Chief Executive of NHS England, Simon Stevens, actually advised a figure closer to £16bn would be required to keep the struggling NHS afloat. Laws claims the Government fully understood the financial situation, but pressured Stevens to halve his figure to £8bn to support their election campaign.

The above figures are, of course, based solely on the safe provision of the current 7-day emergency service. We have yet to see projections, plans or estimates for what a “true 7-day NHS” would look like, let alone the costings of such plans.

Absolute spending increases make for excellent soundbite politics. In reality, the Government is enforcing real terms per-capita spending cuts, which does not make for a financially sustainable NHS. We currently spend less per patient on older, more complex patients. We continue to spend a smaller proportion of our GDP on healthcare than most of our counterparts including per-capita spending ,well below the OECD median.

As a country we are living longer, have more complex healthcare needs and, as such, become more expensive to care for. In response to skyrocketing patient care and hospital overhead costs, we have allowed a systematic reduction in funding per patient.

The financial collapse of the NHS has one of two remedies, further privatisation or adequate funding through re-nationalisation.

It’s time for us, the public, the patients, to have an honest and frank debate about what the NHS is really worth and whether we are willing to put our money where our mouth is.

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