A transformation fund for the NHS

It is now widely accepted that, in order to meet the challenges facing the health and care system, the NHS will need both to improve productivity and to receive a real-terms increase in funding. It is probably just as widely accepted that this needs to be accompanied by – and indeed relies on – a fundamental change in the way that care is delivered.

NHS England’s Five Year Forward View recognises that the NHS must adapt to a changing world by breaking down the barriers in how care is provided and improving the integration of services. The Forward View outlines a handful of ‘radical new care delivery options,’ which local areas will be able to choose from.

But delivering major change is not easy. All too often local services have been forced to introduce change on the cheap – by overburdening local leaders already too busy just managing their day job, by leaving too little time and resource for genuine engagement with staff and the public, or by closing old services before the new ones are running at full capacity. To break out of this model, both The King’s Fund and The Health Foundation have called for a properly resourced 'transformation fund' to support change in the NHS.

This argument is gaining weight: the Autumn Statement identified £200m for next year to help establish the models of care set out in the Forward View, and this is welcome. However, it still leaves the questions of exactly how big such a fund ultimately needs to be, and even more importantly, how to spend it so that the investment does support real change at scale across the NHS.

Over the coming months The King’s Fund and the Health Foundation will be exploring the concept of the transformation fund in more detail. We hope to address the question about what resource is required and to explore alternative sources of funding. In particular, we will be looking at whether resources tied up in surplus NHS assets and estate could be used – what is the scale of these resources, are they accessible, and how might they be released?

We will also look at past transformation programmes within the NHS, within other health sectors internationally and in other sectors. By examining examples of successful (and indeed, unsuccessful) attempts at transformation, we want to identify the key drivers of large-scale change. This means also understanding the role of factors other than funding: notably leadership, staff, and approaches to setting goals and measuring progress.

One important outcome from the review of past examples of transformation will be the lessons for the administration of the fund. Just as NHS England will need to decide how, when and where to allocate the £200m outlined in the Autumn Statement, we will need to consider how a future NHS transformation fund should be administered and over what period of time. Some principles are clear – for example, the fund must be earmarked for genuinely transformative change and not be raided to prop up indebted health economies – but others, such as who will host the fund, and whether it should operate at a central or local level, whether it will be given as a loan or a grant, and to whom, are all still open questions.

As we develop our thinking, we will be seeking input from stakeholders across the NHS, national bodies and national and international experts. Look out for further blogs on our progress.

This blog was co-authored with Lillie Dunn at The King's Fund.

Anita is Chief Economist at the Health Foundation.