New five year planning guidance from Monitor, the health sector regulator, estimates that all NHS providers will need to make real efficiency savings of at least 2% every year as part of their contribution to the wider financial challenge facing the NHS.
This compares with an estimated real saving of only 1.5% or less in recent years.
In addition to providers improving their efficiency, commissioners will need to work with them to redesign care pathways across local health economies to deliver further efficiency savings while also improving quality.
Monitor is to introduce a new strategic planning regime to support NHS Foundation Trusts (FTs) in developing new ways of working and delivering quality services more effectively.
Independent research has indentified that the current quality of strategic planning among FTs is inadequate to respond to the long-term challenges, facing the NHS.
A separate review conducted by Monitor also found widespread weaknesses in short-term operational planning by FTs, with over 75% unable to forecast their financial performance accurately within a reasonable range.
A Monitor report Meeting the needs of patients states that robust planning by Trusts is an essential first step in meeting the challenges facing the sector, enabling them to make decisions about service provision and resource allocation, and to govern effectively in the interests of patients.
Under the new planning guidelines, FTs will be required to adopt a five year strategic planning regime from 2014 instead of three years as at present; provide Monitor with a detailed two year operational plan, followed by a further three year strategic plan outlining transformational plans for the organisation; and submit plans earlier in the financial year to allow for quicker visibility of upcoming risks.
Monitor is aligning its planning processes with NHS England and the NHS Trust Development Authority to ensure FTs, local commissioners and NHS Trusts work together to meet local patients’ needs now and in the longer term.
David Bennett, chief executive of Monitor, said: “Robust strategic planning is essential if Trusts are to provide patients with high quality care now and in the future. We know that Foundation Trusts are facing major clinical and financial challenges, but we also believe they have the capacity to rise to them. For example, the introduction of the Better Care Fund, which potentially takes £2 billion from the budget of providers in 2015-16, offers an unprecedented opportunity to make the transformational changes we have been urging for some time, to enable patients to be treated out of hospital and closer to home.
“Our guidance contains advice as to how providers can improve their current offer to patients and work with commissioners to take other steps to improve productivity, such as redesigning care pathways.”
