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NHS is not meeting the “Nicholson Challenge” says Health Committee

12 February 2014

The health and care system needs fundamental change if it is to meet the needs of patients, according to a senior committee of MPs.

Launching a report following the Health Committee’s annual inquiry into Public expenditure on health and social care, Committee Chair Stephen Dorrell MP said,

"The Nicholson Challenge requires the health and care system to deliver fundamental change so that services are joined up and focussed on the needs of patients. What we have heard during our inquiry indicates that while many of the straightforward savings have been made, we have not seen the transformation of care on the scale which is needed to meet demand and improve care quality”.

"The NHS budget is static, and the social care budget is falling. In these circumstances, the successful integration of high-quality health and care services represents a substantial and growing challenge.

"The situation is not helped by the current fragmented commissioning structures. The Committee’s view is that, as Health and Wellbeing Boards have been established to allow commissioners to look across a whole local health and care economy, their role should be developed to allow them to become effective commissioners of joined-up health and care services.

"We also recommend, as we did a year ago, that the current level of real terms funding for social care should be ring-fenced. Alongside the Government’s commitment to maintain health spending at current levels in real terms, this would give certainty about budgets for a whole health and care economy and provide a firm financial basis for Health and Wellbeing Boards to plan and implement transformative service change.

"Without stronger commissioners and ring-fenced health and care funding, we believe there is a serious risk to both the quality and availability of care services to vulnerable people in the years ahead."

Among other issues that the Committee considers in the report are:


The Committee is concerned that in the case of the proposed merger the Royal Bournemouth and Christchurch Hospitals and Poole Foundation Trusts the competition authorities intervened to obstruct a proposed service reconfiguration on competition grounds without being able to substitute another proposal to deliver service change. It recommends that recommends that the Government should examine the background to the Bournemouth and Poole proposal in order to ensure that unnecessary impediments to necessary change are removed.

Pay restraint

The Committee welcomes the Government’s recognition that the future of the health and care system cannot be built on an open-ended pay freeze: “If the health and care system is to be a good employer (which it needs to be if it is to deliver high quality care) it needs to undertake transformative change in order to ensure that its committed staff are better able to meet the needs of users of its services”.

Trusts and Foundation Trusts

The Committee notes that 48% of Trusts are forecasting a deficit in the current financial year, and that at the beginning of the financial year 19 Foundation Trusts were in breach of their terms of authorisation. It comments that in successive reports during this Parliament "we have drawn attention to the urgency of transformative change of the care model if the needs of patients are to be met. The fact that the number of NHS Trusts and NHS Foundation Trusts reporting underlying deficits continues to grow represents evidence that the pace of change has not been sufficient to meet the challenge."

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