New NHS shock as Westminster faces big losses

Posted: 11/12/13

December 9th 2013

Right Hon Jeremy Hunt MP
Secretary of State for Health
Department of Health
Richmond Terrace
London SW1

Dear Jeremy,

I am writing prior to what I understand will be a decision of NHS England on December 17th relating to the 2014/15 CCG Indicative Target allocations.

I am deeply concerned about the implications for inner London, both in respect of Central London CCG and West London CCG, which covers the Queen's Park Ward in my constituency. These two CCGs face reductions of £53m and £89m (37%) respectively.

I appreciate that changes in the funding formula will be phased, and central London has been above the target allocation under previous formula changes. However, I have been advised that even means that the cash the Central London CCG has to spend on healthcare will be flat whilst inflationary pressures exist within their contracts. The impact of this is roughly £5m per annum and would mean a gap to close in 2015/16 of £12.5m once the redistribution of funds into the Integrated Transformation Fund are also taken into account.

In reality, the underlying pressure on NHS expenditure further increases the pressure on CCGs, who, in our case locally, also have to deliver the ‘Shaping a Healthier Future' agenda, with the proposed major re-structuring of Accident and Emergency services. In addition, inner London continues to face the extreme challenges of accommodating population churn, a substantial commuter population and the health needs associated with homelessness, amongst others. I am no doubt that even phased reduction, unless offset by a ‘floor' settlement ensuring a real terms uplift, will impact severely on the delivery of local health services and the ambitious West London change agenda.

I believe that the current review will be considering:

• Why the proposed ACRA formula behaves differently from the previous formula used to determine allocations to primary care trusts and will investigate the significance of inappropriately met need.
• The "pace of change" that should be used to move Clinical Commissioning Groups to their new targets, whatever these happen to be.
• Whether or not to make settlements below real terms growth.

As I understand it, the review group will publish its initial findings in time to inform 2014-15 Allocations, but will not report finally until July 2014. It would therefore be helpful to know exactly on what basis next week's decisions will be made.

Westminster City Council have offered support to both CCGs in making representations to the Department of Health and NHS England. However, both CCGs are working with the CWHH collaboration to make their views known to NHS England.

It is also my understanding that the removal of health inequalities from the proposed funding formula is being justified on the grounds that local authorities are being separately funded for their public health duties instead.

Public Health Funding Formula

However, initial modelling undertaken by London Council suggested that Westminster City Council could see a 57% drop in public health funding if no changes were made to this formula.

The draft formula uses premature mortality as the key factor and as such does not take account of a number of issues which public health funding would be used to address, including

• The mandatory requirement for local authorities to provide demand-led, open access, sexual health services, which have little relationship with premature mortality.
• Particular population characteristics, including age structure, levels of mental health problems and homelessness (which is rising sharply).
• Substance misuse services which fall outside of the Pooled Treatment Budget, which is focussed on opiates and crack treatment,
• That high premature death rates will be caused by a multitude of complex and inter-related factors, which are likely to require a disproportionate amount of funding for health improvement. As Westminster Council have suggested:
Over time, the formula is therefore likely to increase health inequalities between the richest and poorest areas.
• The impact of population churn, which accounts for up to 30% of inner London population. This in turn leads to additional demands for services including NHS Health Checks as well as other screening programmes.
• The needs of large numbers of children, particularly in inner city areas, with the forthcoming responsibility for the public health of children between 5 and 9 and, from 2015, those between 0 and 5 years old.

It is particularly galling to see that many areas which are set to gain under formula changes face few if any of these challenges.

I therefore urge you not to proceed now with changes which will be to the considerable detriment of our highly pressured inner city populations, particularly at a time when health and local authority leaders are seeking to manage the ‘Shaping Healthier Futures' agenda, and coping with rising problems like homelessness.

I look forward to your early reply.

Yours sincerely,


Karen Buck