One of the most enduring myths in the NHS and the wider public sector is that there is “no money”. This is a refrain I often hear from clinical staff and managers in the NHS: I have heard it every month for the 275 months that I have been working inside and around the NHS.
At face value, this statement is clearly absurd. The NHS spent around £96 billion last year and has spent around £1.4 trillion since I joined the NHS. This would buy every nurse in the UK 20 Rolls Royces each or 3 flats in Chelsea. The NHS spends a colossal amount of money every year.
So why do people still believe that there is no money?
The answer is largely cultural. Ever since the NHS was founded in 1948, it has struggled to deal with demand and to contain costs. There has always been huge pressure to manage the demand — for hospital beds, pay rises for its staff, drugs, advances in technology –within the available funding.
This has meant that generation after generation of NHS managers has spent large amounts of their time turning down requests for increased spending. If clinical staff believe that there is money, they will approach those who they believe have it and ask for it. If the staff believe there is no money, many will not even bother asking managers about it. Doing so would be seen as a waste of time. So if this belief in “no funding” can be embedded in clinical staff, the managers will get far fewer requests for it.
So where is the money?
We first need to understand the difference between recurrent and non-recurrent funding. Recurrent funding is the funding that most budgets are made of: the money that will be spent regularly every year and usually renewed the following year. Non-recurrent funding is “one off” money that is sometimes available and when it is spent, it is gone.
Non-recurrent money is usually created when there is a delay in recruiting staff to posts but can also be created when reserves are dipped into or when there is a national or local problem that needs addressing or a scandal in the media. When this money is made available it has to spent on very short notice and so the existence of this money is only usually known to extremely senior managers (typically Board-level directors).
Why the money is usually hidden
Non-recurrent money is often made available at the end of the financial year. February and March are very good times to look for non-recurrent funding. It is important to understand that this money is often hidden and there are usually only a few senior people in the organisation who know that this “one-off” money is available. If money is suddenly announced, it will damage the credibility of the managers or commissioners who have spent years building up the expectation that there is no money. This would set them right back to dealing with more requests for funding than are able to be met.
Genuine “invest to save” is always attractive
The sort of schemes that are most likely to be funded from non-recurrent funding are “invest to save” models, where some non-recurrent money spent now will save large amounts of recurrent money in the future. It is the equivalent of spending some money now on insulating your house to save money on all your future heating bills. These are always extremely attractive because the savings usually massively outweigh the initial costs and these are almost always funded provided that:
a) the person genuinely believes that the savings will be made (and there is some good evidence that this will happen) and
b) the organisation that is providing the initial funding will receive the savings
The second point is really important: there is no point (for example) asking a community organisation to provide funding which will save costs spent in a hospital or asking a health commissioner to provide funding which will save the local authority money.
If your scheme will genuinely save your organisation (or the commissioner) funding then it is usually only turned down because they simply don’t believe that your project will works and that it will save money. This is why pilots are so attractive as they provide concrete evidence that your idea works and that it saves money.
Do you have any great ideas to improve your patients lives and save the organisation money?
-Dave
Community Health Innovators 