A return to top-down control

In January 2016 the government began a major top-down reorganisation of the NHS in England that has gone relatively unnoticed, but which is poised to make it far easier for the government to control NHS spending and make cuts to services. The reorganisation reverses previous moves in the NHS to focus on local decision making via clinical commissioning groups.


The reorganisation, based on NHS England guidance published in December 2015, began in January 2016, with the designation of 44 sustainability and transformation plan (STP) areas or “footprints”, which vary in population size from 300,000 up to 2.8 million. The sustainability and transformation plan for each area is being devised by a discussion body or board comprised of representatives from local health (NHS trusts and CCGs) and care organisations and local councils.

According to government guidance, STPs are long-term plans designed to change the way health and care is planned and delivered for a local population. In reality the STPs are a major reorganisation of the NHS in an effort to cut the current NHS deficits, but without the substantial extra funding the NHS really needs.

The primary goal of an STP to save money and balance the budget, may be achieved through the management of demand, an increase in provider efficiency, and the reconfiguring services, however it is more likely to be achieved by cuts to services and a reduction in quality of care.

The King’s Fund has noted that the post-Francis era of concern for quality and safety is over and that ‘it is inconceivable that the NHS will be able to achieve both financial sustainability and large-scale transformation within these financial constraints.’

The STPs were all to be submitted by the end of June 2016 for formal assessment in July 2016 by the Department of Health. This timetable is already out the window though as many boards did not submit by the end of June.

Funding – but only if the books are balanced

STPs are billed as local plans developed by local organisations, but in reality what they can achieve is dependent on funding and access to funding is very tightly controlled by central government. The funding for the STPs is from the Sustainability and Transformation Fund (STF), held by NHS England, but it is ring-fenced and can only be released with agreement from both the Department of Health and HM Treasury.

So no money from the STF unless the STP can be shown to balance the books and eliminate deficits for that “footprint” then stick to tight budgets over the next four years. As all but one of the STP footprints is in serious deficit, balancing the books may well be impossible without swingeing cuts to services.

The STPs bring together NHS trusts that are in a very difficult position financially, with almost all of them in deficit, with other organisations, including CCGs, most of which are not in deficit, although not flush with money either. The result is that the overall financial situation of the STP footprints is very poor; all but one of the 44 STPs is in deficit overall, according to research carried out by the HSJ, and about a third have deficits of more than 4% of their turnover.

The first tranche of money from the £2.1 billion STF for 2016/17 has already been allocated to NHS trusts, however due to the dire finances of the trusts, all £1.8 billion will be spent on bailing out the providers’ deficits. The fund will be paid out to the trusts quarterly, in arrears, based on the trusts agreeing and then achieving financial targets.

A return to central control

The boards that devise the STPs are not statutory bodies, they have no legal right to demand that providers or CCGs carry out any of the plans. However, by the use of tight financial controls, commentators have noted that the use of STPs is a move back to more central control over the NHS. It is likely then that pressure from the top (NHS England, NHS Improvement [Monitor and the NHS Trust Development Authority], Health Education England, NICE, Public Health England, and the CQC) will push through STPs in the face of local opposition.

However, as councils are also involved in the STPs, the Department for Communities and Local Government may well have to become involved to persuade councils to toe the line.

A lack of accountability

The lack of a clear legal position for the STP boards also leads to a lack of accountability. According to Colin Leys, an honorary research professor at Goldsmiths, University of London, “it is also not clear who will be accountable for the results in terms of service provision, or the accompanying redeployments of public funds, or the conflicts of interest and opportunities for fraud which the process is liable to generate.”.

More private sector involvement

Finally, the STPs provide the perfect opportunity for the private sector to muscle further into the NHS. The STPs combine the free NHS with social care, which already involves a high-level of private sector involvement. This combining of services is likely to lead to an increase in private sector involvement in the NHS.

The private sector is reported to be very interested in gaining access to the leaders of the STP footprints. In an interview with the HSJ, Jim Easton, managing director of Care UK’s health care division and chair of the NHS Partners Network, which represents independent sector providers of NHS care, noted that it was an “immediate priority for the organisation to speak to the leaders of each STP footprint about closer working with private sector providers.”

Easton added that the sector could offer “capacity, capability and capital investment to help develop new services and maintain performance.” In other words the private sector sees the chance to make a profit from STP footprints desperate to show they are transforming and saving money.