Overhaul in health funding requires stakeholder solidarity

Local government finance officers must be sick and tired of blogs about storm clouds, crises and impending financial oblivion.

But it’s hard to avoid, particularly when writing about health and social care. And as all chief finance officers know only too well, the situation is grim. The LGA has calculated that local government is facing a £16.5bn financial black hole by 2020, in large part down to the spiralling cost of social care, while NHS England has suggested that the NHS is looking at a £30bn funding gap in a similar time frame.

This could be rhetoric, in part, to give service professionals a little jolt in the right direction – that is to say, to help nudge them towards greater integration between health and social care, convincing them that salami slicing will fail to make a deep enough cut. But the facts have been clear for some time, in the social care world at least – radical change is long overdue.

Local government is used to change of course. Responsibilities (whether statutory or politically-driven), levels of funding, public confidence – all of these have fluctuated over local government’s long history, and the sector has grown to adapt.

And many local areas have been working together in an integrated way for some time. Some have been utilising pooled budgets between council and health services for several years – Oxfordshire being a case in point.

But it remains to be seen how the wider NHS culture will react to such a radically different world. Yes, many Health and Wellbeing Boards are forging ahead with strategies and revised Joint Strategic Needs Assessments. Yes, we have pooled budgets for older people and mental health in a growing number of areas. Yes, we are hearing all the right noises from both parliamentary front benches about supporting (and funding) integration.

Yet, are politicians and the NHS truly willing to dive headlong down an integrated and preventative services rabbit hole? How are acute medical professionals going to react when commissioning policy starts to catch up with the rhetoric and solutions that begin to plug that circa £45bn funding gap emerge and result in widespread hospital closure proposals? And how strongly will they fight back against what they might see as the political ‘bean counters’ taking charge of healthcare?

Perhaps more important is how will the public react. Can this be sold to them by the numbers alone? And who will be the ones selling it to them? Arguably, it can only be achieved through demonstrating a better, or maintained, quality of life; and only if local government, the NHS (both GPs and acute providers), and Ministers can hold the line together – infighting will result in plunging public confidence and messaging catastrophe.

Finally, given the lag period, how different might the politics of the integration game be if the crisis explodes under a post-2015 government? It was interesting to note that Shadow Secretary for Health Andy Burnham’s proposal to transfer £60bn of health commissioning budgets to local government was notably absent from his Party Conference speech.

In any case, all of the major parties would do well to listen to local authority finance colleagues. When you plan your budget four years in advance, you get pretty good at spotting a crisis looming.

Steven Howell is a Senior Policy Officer at the localism think tank, Localis, who recently launched a report on local government’s role in the new health system.