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Welfare Reform on the Web (June 1999): National Health Service - Funding

AN AGENDA FOR CHANGE: MODERNISING THE NHS PAY SYSTEM

Department of Health
London, 1999

Under the proposals staff will be allocated to one of three pay spines. The nurses' and doctors' pay review bodies will stay, with the remaining 300,000 staff covered by a single forum based on the General Whitley Council. Pay rates will continue to be set nationally, but employers will be able to decide how to divide the three national pay spines into local bands. They will also be able to add a local market forces factor.

DOBSON PROPOSES RADICAL NHS SALARY OVERHAUL

N. Timmins
Financial Times, Feb. 16th 1999, p. 1

Reports government proposals for a new salary structure within the NHS. Under the proposal there would be three pay 'spines', one for doctors and dentists, one for nurses and therapists and one for other staff. The national framework will lay down minimum pay rates for key types of post, but health authorities and hospitals will have discretion over where each post is placed on the pay spine. The most radical proposal is that NHS consultants would have a new contract based on "agreed responsibilities and achieving good clinical outcomes" rather than the number of sessions worked. The proposals were greeted with caution by the BMA and anger by Unison, which saw them as reflected the previous Tory government's failed experiment with local pay.

(See also Independent, Feb. 16th 1999, p.2; Times, Feb. 16th 1999, p.2)

DOWNSIZING FOR THE 21ST CENTURY: A REPORT TO UNISON ON THE NORTH DURHAM ACUTE HOSPITALS PFI SCHEME.

D. Gaffney and A. Pollock
London: Unison, 1999.

Concludes that the PFI is extremely expensive, fails to demonstrate extra efficiency, and demands reductions in budgets for clinical services in order to make returns to shareholders of nearly 20% per annum. On the Trust's own account, this does not represent value for money in comparison with public sector procurement.

FINANCE: HSJ SPECIAL REPORT

Health Service Journal, vol. 109, March 4th 1999. Supplement. 16p.

Considers three aspects of NHS funding. Firstly investigates how the government's plans to cash-limit primary care prescribing within unified budgets managed by primary care groups will work out in practice. Secondly looks at how the imposition of a controversial risk-pooling scheme for trusts in place of commercial insurance will be linked to strict new standards on the management of non-clinical risk. Finally reports that the private finance initiative once proclaimed as providing the largest-ever hospital building scheme, appears to be falling out of favour and is now seen as just one among a range of options.

FUTURE NHS STAFFING REQUIREMENTS

Health Committee
London, TSO, 1999. (House of Commons papers. Session 1998-99; HC 38)

Report calls for reduced use of the private finance initiative in the health service until its impact has been properly evaluated through pilot schemes. Other key recommendations in the report centre on future NHS staffing requirements.

GPs FEAR NURSES' PAY BILL WILL CUT DRUG USE

C. Brown
Independent, Feb 18th 1999, p. 7.

Health authorities across Britain are warning that they will have to cut their drug budgets, leading to rationing, to meet the pay rise of 4.7% for most nurses.

LIABILITIES INTO THE MILLENNIUM

C. Shah
Public Finance, Feb. 19th-25th 1999, p. 26-28.

Far from being a bargain for taxpayers, PFI hospital funding can be badly inflated by the government's approach to creditworthiness. If the government guarantees trusts' financial obligations under a PFI scheme, then they should be able to borrow at low cost. However, the monies raised will be accounted as government borrowing, which New Labour is trying to reduce. If the government does not promise to bail out the trusts in case of financial difficulties, then the costs of borrowing will shoot upwards.

LOOKING-GLASS WORLD OF PFI

J. Shaoul
Public Finance, Jan. 29-Feb.4 1999, p. 14-16.

The Private Finance Initiative (PFI) is now being extended to education, health, defence, fire and police stations. Article critically examines the Royal Infirmary of Edinburgh scheme, which will produce fewer staff and beds at a cost of almost £1 billion to the taxpayer.

NURSES ARE WARNED OF STAFF CUTS

D. Brindle
Guardian, March 8th 1999, p. 8.

Reports that the Royal College of Nursing is warning that hospitals are beginning to cut numbers of trained nurses in favour of cheaper health care assistants. The trend is not yet widespread, but there is concern that it will grow since the nurses' pay award has increased the cost of registered staff.

(See also Daily Telegraph, March 8th 1999, p. 4)

READY, STEADY?

B. Elliott
Health Service Journal, vol. 109, March 4th 1999, p. 23.

Discusses risks involved in the move from the internal market to the new NHS funding regime. Problems could arise from the lack of a tightly controlled process for moving from one funding regime to another, with the consequent risk of financial destabilisation in 1999-2000.

A SUITABLE CASE FOR BEST VALUE TREATMENT

S. Ward
Public Finance, Feb. 12-18 1999, p. 16-18.

Highlights a number of 'best value-type' changes introduced into the NHS by the Labour Government. These include the National Reference Costs Register and the establishment of the Commission for Health Improvement and the National Institute for Clinical Excellence. Finally, government has tied all the new money given to the NHS to efficiency gains.

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