Back Door Cuts in NHS Funding

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2005 Health Care Service Group Conference
30 December 2004
Carried as Amended

Conference notes that ‘recycling’ money, annual ‘efficiency savings’, ‘top-slicing’ for different purposes, ‘brokerage’ and multiple announcements of the same pots of new money have long been features of Government funding of the NHS. Making sense of the direct funding of individual Trusts has become a nightmare, even before variable, activity-based funding and PFI contracts are taken into account.

In 2005/6 two changed features of NHS finance stand to mean cuts in NHS funding at a local level across the whole country:

·The accounting value of the NHS estate has been increased significantly, meaning the capital charges all Trusts must pay back to the Government as a ‘rent’ for the assets they use will go up. (It also means the amounts individual Trusts get to keep from the sale of any surplus land they have left has gone down dramatically).


·The annual ‘Cash Releasing Efficiency Savings’ (CRES) that each Trust is required to make year on year – a 1-2% reduction on all budgets, itself a dubious measure – are being taken back by the Government rather than being left with PCTs to invest in new services as previously.


The combined effect of these changes will amount to around a 2% cut in the budgets of individual Trusts, with an obvious impact on UNISON members and the services we provide.

Conference calls upon the Government to stop the policy of CRES cuts in budgets and to increase the core funding of NHS Trusts to offset the increased capital charges arising from the increased value of NHS Estate.

Conference also notes that the need for a core of activists with a basic understanding of NHS finance in all branches is growing ever greater and calls upon the Service Group Executive to work with the union’s education department and others to develop an activist-focussed guidebook (and possibly a supporting course) on understanding NHS finance.

Branch representatives also need to understand funding issues relating to Payment by Results (PbR) and Financial Flows policy. Conference calls on the Service Group Executive to provide briefing notes for branches on this subject, to ensure that branch negotiators are up to date with issues relating to Health Resource Groups (HRGs), reference costs, national tariffs and market forces adjustments.