"The NHS will last as long as there are folk left with the faith to fight for it"
Aneurin Bevan

Saturday, 30 April 2011

The big squeeze

When you put someone in charge of Monitor who has said that he wants the NHS dismembered, you should expect something nasty from him. And here it is.

The NHS is expected to make 4% "savings" for each of every year for the next five years. This is extremely difficult, and finance directors of hospital trusts (acute and mental trusts) have been jumping through loops, trying to make the sums add up (for example, Hull And East Yorkshire Hospitals NHS Trust, has recently announced that it needs to cut 300 beds by closing 10 wards over the next 5 years).

Now the economic regulator has moved the goalposts.

Four per cent savings/cuts for 5 years was going to be difficult, but now Monitor says that Foundation Trusts must make efficiency savings of between 6.5 and 7.1% over the next five years. A value of 6.5% compounded over 5 years comes to a "saving" of 37%. This is frankly ludicrous. John Appleby, the chief economist for the Kings Fund is quoted in the Financial Times:
"I can see a hospital doing this for one or two years but not five years," Professor Appleby said. "It’s like the unit cost of a hip operation [around £6,000] has got to decrease by 37 per cent. How?"

How, indeed.

Monitor is deliberately pushing all hospitals towards bankruptcy and the government has said that it will not "bail out" any trust in the future.

Furthermore, there are still 85 trusts that are not yet Foundation Trust, and these trusts have to meet Monitor's tough financial criteria to be authorised.   Even at 4% the Department of Health was worried that 22 trusts would not become Foundation Trusts by the April 2014 drop down dead date forced on them by Lansley. If these trusts are not able to meet these initial 4% criteria by that date, then they will not achieve FT status and since the current NHS Trust status will no longer exist after that date, they will no longer be NHS hospital trusts. They will cease to exist.

Monitor has now made the criteria worse. Increasing the 4% annual "savings" to 6.5 to 7.1% annual "savings", means that all of the remaining 85 NHS Trusts are at risk of not being able to achieve FT status and hence not being allowed to be an NHS hospital trust after April 2014. The fact is, all of these trusts, covering over 100 hospitals are at risk.

This is how David Bennett expects the NHS to be "dismembered".

Here are the details in the letter from Monitor.

Here is a short video from the BBC explaining the issues in the simplest of terms.


  1. The amazing thing is that there is not demonstrations in the streets.

    Profoundly depressing.

  2. The Royal Wedding put paid to the thought of demonstrating. It will not be till the cuts affect the people in real life that the Brits will turn from stiff upper lip to snarling lip. But let us not forget that it was Labour who instigated this mass of destruction and trying to give money to the private organisations to take over the Welfare State. The Cons-LibDem-floccinaucinihilipilification Government has simply taken the next step of controlling the people. What better way of doing so than ensuring the people are of ill health, poorly educated and impoverished than by giving money out to the private firms to take over the Welfare State. They have to give them sweeteners because it is not a overtly profitable venture to undertake.

  3. @J A Y B

    Sometimes it just makes you think that the entire political establishment is against the rest of us.

  4. Good piece, Richard. I think the 37% figure may at last help people wake up. Part of the problem is that there's been so much focus on local authority cuts, and this is because there's a local fairly open democratic process which creates an obvious focal point for protest.

    I think this may now change.

  5. Except that 37% isn't the right figure. Go actually read the linked letter. It states that some of the efficiencies required will *NOT* be compounded.

    So you can't compound it over the 5 years.

  6. @Tim Worstall,

    I have read it, as has some very clever people at the Kings Fund, Health Service Journal and the Financial Times. The letter says that the expected "efficiencies" are thus (Implied in-year efficiency requirement, Table 3):

    2011/12 6.5%
    2012/13 6.0%
    2013/14 6.4%
    2014/15 6.7%
    2015/16 7.1%

    If you compound these you get 37.26% Happy now?

  7. So this Lansley's 'Plan B'? I think its fair to say the NHS is under threat all the while Lansley, who has been bought by the Private Health lobby, is in charge.

    Corrupt bastard doesn't do him justice

  8. @Jobbing Doctor - there will be. In face there is one in London on 17th May. Meet UCH 5.30pm


  9. Shame on Nick Clegg and his Lib Dem supporters...We knew David Cameron had no priciples and would break his promises as he is a Tory...the future now looks bad, very bad for my children and my childrens children...shame on you Nick Clegg and your Lib Dem supporters...

  10. This needs to be publicised more to break the propaganda the govt is putting out - the big Camden demo on the 17th is good but we need more. There's an event in Lewisham to talk to people in the street about it soon: https://www.facebook.com/event.php?eid=142020612536001

    Would be good to see this happening in every local area.