A year after stepping down as boss of the NHS in England, David Nicholson has spoken truth unto power with a series of statements about the service that politicians will find uncomfortable.
He is saying that despite the parties’ bidding war over extra money for the NHS, none of their pledges will alter the grim reality of the service’s fast-crumbling finances.
The £8bn extra by 2020 will probably prove to be too little, he said, as the matching £22bn efficiency savings are “a big ask”. Wildly optimistic, he could quite as easily have said. According to Norman Lamb, the Liberal Democrat health minister, the £22bn is a “heroic assumption”.
A major cash injection is needed because of the NHS’s growing deficit – which NHS Providers, which represents hospitals, expects to be as much as £2.5bn by the end of the year – but none of the parties have even mentioned that.
Instead, Nicholson pointed out, they prefer to talk about the extra things – more nurses and doctors (Labour), seven-day NHS services (the Tories), and easier access to GPs (Liberal Democrats) – that the NHS would have or do if they were in power. His intervention amounts to a timely, well-informed, honest and therefore necessarily painful reality check to Messrs Cameron, Miliband and Clegg. Think you’ve got the NHS’s finances sorted? Think again. They’re actually much worse.
With the election campaign in full swing, Nicholson’s point that political leaders are not facing up to the scale of the problem is arguably the most damaging for the Labour leader.
The Tories moved fast to highlight his remark that it would be helpful if Labour finally committed to the £8bn, pointing out that all the health thinktanks see Labour’s isolated stance as unhelpful. The Conservatives and the Lib Dems have already done so in response to a plea from the NHS England chief executive, Simon Stevens.
Curiously, by refusing to guarantee the £8bn, the party that voters trust more than any other on the NHS has got itself into a tight spot, and given its opponents an open goal.
Labour’s rationale – the party won’t commit to anything more than its planned £2.5bn a year Time to Care Fund for extra staff until the NHS has been reformed along the lines it has set out – is hard to explain simply, however well-intentioned it is. Andy Burnham, the shadow health secretary, has further complicated the picture by suggesting a reformed NHS may need less than £8bn.
Nicholson knows a lot about the NHS’s ability to end up with financial black holes. He became its chief executive in 2006 after his predecessor, Nigel (now Lord) Crisp, copped the blame for a much smaller-scale failure to balance the books. If anything, Nicholson underplayed his case. Yes, the NHS is facing a “substantial financial problem”. But the scale of it is already apparent.
Anita Charlesworth, chief economist at the Nuffield Trust health thinktank, says: “NHS finances can only be described as dire at the moment, three-quarters of our hospitals can’t balance their books and at the turn of the year they were running a deficit of £900m.” That £900m will have topped £1bn by 31 March, the end of the NHS’s financial year. And rapidly worsening deficits – among mainly NHS hospital trusts but also a growing number of England’s 211 GP-led clinical commissioning groups – mean it is likely to have grown to between £2bn and £2.5bn soon.
This alarming state of affairs will become “crystal clear” in the autumn, Nicholson said. Actually, it will be sooner than that. The Department of Health’s annual accounts, due in July, will reveal the rapid downward trajectory in NHS finances over the last year or so.
It is an irony that the health secretary in a government committed to austerity and reducing public spending, Jeremy Hunt, has allowed the rapid and widespread accumulation of debt across NHS providers of care to happen on his watch. Until recently, such lax cash control costs jobs, as Crisp knows. Yet he has pursued a strategy of allowing, even encouraging, hospitals to keep on hiring staff, and doing whatever else was necessary, to ensure that quality of care was prioritised over the bottom line.
The reckoning, when it comes – there will be calls for the new government to write the NHS a huge and immediate blank cheque the moment ministers have sized up their new offices for the first time – will be brutal.
The still-fragile state of public finances, the fact that the NHS is going to get lots of extra money whoever is in power and the possibility of having to cut other Whitehall budgets more than already anticipated if the NHS receives even more dosh, all make the signing of that blank cheque politically very difficult. But it will have to happen.
Why? Because the alternative – visible deterioration of NHS services that patients notice – is even worse to contemplate.
As Dr Mike Dixon, a senior GP and chair of the NHS Alliance, says: “It’s not rocket science to predict the impact on the NHS if this commitment is not met. Patients would face longer waits, services would face severe cuts and rationing, and many hospitals and GP practices would struggle to survive in their current form.”
And no government will want what Nicholson called “managed decline” happening on their watch.
