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Sunday 25 June 2017

The new government needs to face the facts on funding and pay

By Jon Restell

With the economy growing more slowly than healthcare demand, the government will have to find more money to maintain services and end the pay cap.

Jon Restell
Only the self-deluded would claim a commanding understanding of our current politics. Such self-delusion in public life has always existed but the extraordinary developments of recent years, here and overseas, make it easier to spot and ridicule. Certainty seems a suspicious quality. The best we can do is feel our way, plan and reflect, and assume pretty much nothing. 

The latest extraordinary political event was June’s UK general election. The fall-out includes a deal with the DUP and, as I write, growing pressure for an end to the public sector pay cap.

The DUP deal smacks of the pork barrel politics more often associated with America than the UK. That said, in her shoes, I’d probably have done the same as Arlene Foster. 

By protecting the pensions triple lock and universal winter fuel payments, the DUP deal ties down some big chunks of money – money that would’ve been available for other things such as health and social care.

A hung parliament also means more power for backbench MPs across the political spectrum. This consigns controversial domestic legislation to the ‘too difficult’ box, where it’s likely to be joined by the radical elements of the STP programme in England. 

Backbenchers will find it hard to resist the temptation to use their newly acquired leverage to intervene in planning and funding decisions. If this undermines fair funding and evidence-based decision making, it won’t be good for the NHS in the long run.

It’s been particularly startling to see Conservative cabinet ministers publicly calling time on the public sector pay cap. Michael Gove, for example, talks about honouring the integrity of the pay review body process as if he’s a union press officer. 

Not before time. The pay cap is often described as a recruitment issue. But it’s just as much a matter of retention. Staff, whose real earnings have fallen by 15%, are voting with their feet. High turnover and the loss of experienced staff hurts patient care. 

But a hung parliament doesn’t touch demand for health and care, which is stubbornly rising at a long-term trend rate of 4% a year. With the economy growing at less than half that rate, the government will need to find more money for the NHS if services and quality are not to be cut and the pay cap is to end.

For MiP and health campaigners, funding must be the priority in the run up to the autumn budget. 

Simon Stevens and other NHS leaders are right to say that the NHS must show that it’s as efficient as possible and can effectively shift resources within the care system. But we need to be realistic about how much more can be done. Also rightly, Stevens points out that the NHS is leanly managed, with running costs significantly lower than comparable healthcare systems. Eye-watering savings, particularly in providers, will be hard to repeat. There’s little gold left in those particular hills.

There’s also a belief in targeting savings at the back office. The superb response of the NHS team to the recent terrorist attacks in Manchester and London shows how much we need effective systems and infrastructure. And after the WannaCry cyber attack, who would now claim that that the back office has no part to play in keeping patients safe? Leadership and management is key to meeting a whole of range of challenges from efficiency to staff wellbeing. We treat managers as second class employees at our peril.

Finally, it’s become tempting to see ditching the pay cap as an end, not as the means to an end. Yes, it removes the shackles from bargaining committees or review bodies, so they can look at the needs of public services and the aspirations of public servants to pay their bills and protect their standard of living. But it does not automatically mean we will be able to fund long-overdue pay reform or guarantee decent pay rises. That will only be achieved with a wider political commitment to stop hollowing out the public realm and fund public services properly.

Jon Restell is chief executive of Managers in Partnership.

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