Public health post-2013 Contents

2Funding

Summary

Local authorities are aiming to deliver more with less, giving rise to innovative practice, but they are now at the limit of the savings they can achieve without a detrimental impact on services and outcomes. There is clearly a mismatch between spending levels on public health - which are set to reduce - and the significance attached to prevention in the NHS 5 Year Forward View.

23.Local authorities are currently allocated a ringfenced public health grant. Public health accounts for some 4% of local authorities’ total spending. There are six ‘prescribed’ or mandated public health functions—services that local authorities are obliged to provide with their public health grant. In July 2015 public health budgets were subject to an in-year cut of £200m (6.7%), and the 2015 Spending Review announced further cuts to the public health budget.

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24.The graph below has been adjusted to include the funding for 0–5 services which prior to 2015–16 was allocated to NHS England. It shows the reality of a sharp drop from 2014–15:

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25.The cuts are likely to be “significantly front-loaded”, according to the Health Foundation. Real terms reductions in the first four years from 2015–16 (-3.8%, -4.2%, -4.4%, -4.6%) are followed by a lower reduction in 2020–21 of -2.2%.11 This amounts to a real terms reduction from £3.47bn in 2015–16 to just under £3bn in 2020–21.12

26.Funding allocations for public health activities were originally determined by a baseline audit of spending against public health activities by primary care trusts. There was wide variation in this historic expenditure across the country, ranging from £18 per head in Surrey to £108 per head in Westminster with an England average of £47 per head. This resulted in inequality of funding, as funding was matched to past spending, not need. A resource allocation formula has been devised to match funding more closely to deprivation and need. This formula suggests that Slough was receiving 48% under target, and Kensington and Chelsea was receiving 199% over target. The growth funding in the allocations in 2013/14 and 2014/15 was applied differentially with the aim of bringing councils closer to their target allocation. The most over-target areas received 2.8% growth in each of the years while the most under-target areas received 10% in each year.13 However, this reallocation has only resulted in small reductions to variations, and funding cuts have been made on an equal basis without reference to target allocations.

27.Funding sources for public health are likely to change significantly in coming years. In 2018–19 the ringfence will be removed, and central government grants to local authorities will be replaced by funding through retained business rates.

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Note: Health expenditure is measured as a total department expenditure limit, excluding depreciation. Sources: HM Treasury, Public Expenditure Statistical Analyses 2015. DCLG, Local authority revenue expenditure and financing England: individual local authority data – outturn. NAO report: Public Health England’s grant to local authorities, Figure 1, p.12

28.Our witnesses had mixed views on whether the removal of the ringfence was a positive or a negative development.14 There was concern that the formula for adjusting retained business rates should be carefully designed so as not to further disadvantage poor areas and compound health inequalities.15

29.Some witnesses argued that working within more straitened financial circumstances had the potential to prompt local authorities to be more creative about unlocking resources in other local authority services to achieve public health goals:

One of the reasons that local government has sustained the level of funding cuts so far is because of its ability to innovate and do things in a different way, which requires professionals to help politicians make the different decisions they need to make and run services in a different way.

The decades of bearing the brunt of cuts is not great for local government, but the one positive to come out of that is that we have become very good at commissioning and redesigning services and trying to deliver the same or better with flat or reducing resources. We have brought some of those skills to bear in relation to the contract that we took on. There are a number of examples I could give from Hackney, but if I look at one, which was smoking cessation services through general practice, through a redesign of that service we have moved from a 19% to a 51% quit rate in a year, and it costs the same amount of money.

[Jonathan McShane, Chair, Public Health System Group/Local Government Association, Q21]

There are opportunities to work more closely with community partners around the provision of services, which is not necessarily around funding but doing things differently. Those are the opportunities that we need to focus on, because funding is not going to get any better, from what I can see of the settlements. [Housing professional, informal session]

30.In oral evidence to us, PHE took a pragmatic view that the system would work with the resources it has:

No reductions in funding are welcome. However, we believe the 9.6% cash reductions in the public health grant over the next five years, announced in the spending review, are manageable. Local authorities have a demonstrable record of getting more for less and PHE will support local authorities in this task using our intelligence and expertise.

31.However, NHS England’s response in a recent Board Paper clearly illustrate the potential for public health cuts to derail the delivery of the Five Year Forward View:

[…] the Forward View called for a radical upgrade in prevention, and support for wider public health measures. Given the funding pressures in the local authority financed public health services and the need for wider government action on obesity and related challenges, we cannot yet conclude that this test has been met. Much hinges on whether the Government’s proposed childhood obesity strategy [which has yet to be published] comprises an effective package of credible actions […] Absent this, and other linked action, the NHS will be exposed to patient demand and consequent funding pressures over and above that modelled in the Five Year Forward View assumptions.16

32.Unsurprisingly, our witnesses from local authorities and public health services echoed these concerns, describing the cuts as ‘galling’, and as sending out a very unhelpful message that seemed to run counter to government policy:

So far…in terms of the efficiencies in the way we have recommissioned, we have managed to cushion a lot of things. I do not think we can carry on doing that. As we…get into the reductions over the next few years, that is going to start cutting into some of the core services and I fear what that is going to do to outcomes. There has been a lot of discussion about sexual health services. It is quite clear that we are going to have to start making reductions in that area. Some of the areas we would want to protect, such as early years, in line with Professor Marmot’s recommendations, area also going to start to feel the squeeze over the next few years. [Dr Eugene Milne, Director of Public Health, Newcastle Council, Q147]

If we are serious about what is being said in the Five Year Forward View, why would you do that? It does not seem to tally, so there is an incoherence to it.[Martin Smith, Chief Executive, Ealing Borough Council, SOLACE, Q49]

It is irrational to cut the prevention budget when we are expecting so much of the overall healthcare system to reduce demand on hospitals and to close beds and all the other things that need to be done … clinicians from all the [royal] colleges feel … that cutting back on prevention in public health is crazy in this present context [Professor John Ashton CBE, President, Faculty of Public Health, Q25]

We welcome the language in the Five Year Forward View about the importance of prevention … but it is frustrating when you hear that rhetoric and it gets you excited, because you think we are beginning to win the argument and then fundi ng decisions are taken that undermine that. You have to remember not only that the Five Year Forward View requires efficiencies that are hugely ambitious but that Simon Stevens is very clear that it demands that shift to prevention, which I assume means at least maintaining public health spending but also assumes maintaining adult social care spending—and neither of those things are now happening. These are not just issues for the services that w e are talking about specifically in relation to public health. It is about the viability of the whole system. [Jonathan McShane Chair, Publ ic Health System Group/Local Government Association, Q47]

I am very concerned at cuts to the public health budget and cuts to the budget for the areas that I think impact on the health of the public. I am very concerned … we know that, in general, areas with higher mortality r ates, that is, more deprived areas, have had steeper cuts to local government funding ….other things being equal, [this] will have an adverse impact on health inequalities. Simon Stevens made very clear i n his Five Year Forward View the importance of prevention … I looked at a King’s Fund report a couple of weeks ago looking at the question of waiting times in the NHS and they said it was pretty simple: demand had gone up, funding was relatively flat, and so waiting times went up … What are you going to do? You can put more money into it, reduce demand or put up with longer waiting times. That is what you have to do … What we are talking about has the potential to reduce demand, so it is, again, joined-up thinking [Professor Sir Michael Marmot, Director, Institute of Health Equity, University College London, Q94]

33.Witnesses also explained to us that prevention is the first thing to get squeezed, but that this is a false economy.

We have a sexual health service to run. We know that most of the money will go on treatment and the service; it has to. The service will always demand and pull that, but, if you are not doing any of the preventative work, your service will go up and up, and that is just wasteful money. [GP, informal session]

If you started from quite a low base, as a number of places did because of this 6.8-fold difference in funding per head, then the wriggle room when you have an in-year cut and then these other cuts means that some of the stuff we all want to be doing, which is the upstream prevention stuff, gets squeezed out by things like treatment of drug and alcohol problems or sexual health services. That does not feel sustainable in the long run. [Jonathan McShane Chair, Public Health System Group/Local Government Association, Q46]

On the one hand, you have the public health services, like screening, sexual health and so on, but on the other, as Jonathan has indicated, a lot of public health work, particularly on determinants, is broader than that and there has been a real growth of interest over the last few years in community development in public health. That working with community, supporting community leadership, health literacy and all sorts of other initiatives is what is really going to suffer from a reduction in funding. That is very worrying. [Professor John Ashton CBE, President, Faculty of Public Health, Q49]

34.A Director of Public Health explained that because returns on public health preventative investment are often seen as very long term, this makes them particularly vulnerable to cuts:

If places start to lose, for example, action on smoking in pregnancy, that is going to impact on health not only now and within the next few months but in 70 years’ time, when people who were born with lower birth weight because we did not manage to do anything about the smoking then have heart disease. The outcomes are spread over a long period, and in a way that is what makes public health vulnerable; it is that you do not necessarily see those immediate changes. You cannot put an easy number on to that impact, but it will be there. [Dr Eugene Milne, Director of Public Health, Newcastle City Council, Q147]

35.Simon Stevens, Chief Executive of NHS England, also emphasised the importance of protecting preventative services to ease pressure on and save money in more expensive parts of the NHS:

At the very least, we wanted the availability of preventive services to be sustained relative to need. An area where you get very quick payback, or indeed a worsening of the situation if those services are not there, for example, is drug and alcohol services and sexual health services. If those services diminish, that shows up as extra demand in more expensive parts of the National Health Service within 12 months, not within 10 years. [Simon Stevens, Chief Executive, NHS England, Q350]

Some of the evidence that has been provided to the Committee as part of this inquiry is that many local authorities are cutting back on exactly those services you mentioned—smoking cessation and alcohol services. Are you concerned about the reductions in those services? [Helen Whately, Committee member, Q351]

To the extent that they have an impact on downstream demand, clearly, yes. [Simon Stevens, Chief Executive, NHS England, Q351]

36.Witnesses from a wide range of different public health services and professional backgrounds also gave examples of the immediate impact of cuts on their services at our informal roundtable session:

As to the reductions, they are incredibly challenging because they come alongside difficult cuts in broader local government budgets. In particular, the £200 million cut in year is very challenging… [Jonathan McShane, Chair, Public Health System Group/Local Government Association, Q25] 5 McShane

When we went over to the local authority in 2014, we were presented with a wonderful service level agreement that we would love to deliver, which incorporates everything we want to do. However, with the number of nurses we have and the increasing number of schools, population and immunisation programmes, we do not have a hope of being able to deliver that, and now we are being told that we will be cut rather than invested in. [School nurse, informal session]

In particular, the local services based in my local area have seen a 34% cut to be managed in a short space of time. Nobody is looking after or protecting the interests of substance misuse services there. [Substance misuse service manager, informal session]

I would echo the variability we have seen across the country. We have frequent reports of cuts to services, which are influencing clinical delivery [Sexual health consultant, informal session]

The move to local authorities should have improved our ability to deliver public health services, and initially in many ways it did. Our DPH was really excited. Being able to walk across the floor to the drug and alcohol team, the children centres’ team and so on has been wonderful, but, as someone said earlier, in many ways the timing could not have been worse because of the cuts. Smoking has been mentioned. On the one hand, we have a reduction in still births. A toolkit has just come out, and “Stop smoking” is the first plank of that. On the other hand, we are sitting in meetings every week where people say that if we stop the stop smoking services it will save £70,000. I am doing a big piece of work on prematurity. You have £70,000 and prematurity. There does not seem to be any sense in some of those discussions, but the council is in an impossible position in terms of what it has to save. [Consultant midwife, informal session]

One of our great concerns is about addiction services. We have seen great cuts. The new system means you can cut services without people knowing what you are cutting. Where I work in east London, it has been a race to the bottom for the cheapest service and cheapest provider. In general hospitals where I work, I have seen enormous consequences and an increased burden on our

emergency department, because there is not even a nurse or doctor in the building to prescribe for withdrawals of various medications.

[Psychiatrist, informal session]

We are unlucky enough to be in the borough that has the highest rates of childhood obesity, yet we have less than two full-time equivalent dietitians working in this area. We have seen cuts to our teams.

[Dietician, informal session]

It is becoming clear, if you look at the national picture, that whether the local authority is prepared to fund or commission posts going forward for health visiting depends very much on where you live. Some areas are looking at 40% reductions in health visiting staff, which is quite scary. Obviously, there is a sunset clause at the end of 18 months. While the services will be secure until then, it is safe to assume that because of the cuts in the social care budget it will impact upon health visiting going forward.

[Health visitor, informal session]

37.A survey commissioned by the ADPH shows that local authorities are planning cuts across a wide range of public health services both in 2015–16 and 2016–17:17

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Source - ADPH; 2015–16

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Source - ADPH; 2016–17

Conclusions and recommendations

38.As we concluded in our recent report on the Spending Review, cuts to public health funding are a false economy and jeopardise the delivery of the demand and efficiency savings essential to a sustainable NHS outlined in the Five Year Forward View.

39.Local authorities have managed to make some savings by recommissioning services, but they are at the limit of the savings they can make without adversely affecting the provision of services. Preventative services are likely to be particularly affected including those investments which support long term health and wellbeing.

40.Cuts to public health are a false economy. The Government must commit to protecting funding for public health. Not to do so will have negative consequences for current and future generations and risks widening health inequalities. Further cuts to public health will also threaten the future sustainability of NHS services if we fail to manage demand from preventable ill health.

41.We recommend that the Government sets out how changes to local government funding and the removal of ring fencing can be managed so as not to further disadvantage areas with high deprivation and poor health outcomes. We plan to return to review the variation in funding and outcomes.

11 Health Foundation (CSR0097) p1

12 Calculations made by the House of Commons Scrutiny Unit.

13 Department of Health, Public health Grants to Local Authorities 2013-14 and 2014-15

14 Q49

15 Q150

16 Supplementary evidence from NHS England (CSR107), Chapter 4

17 ADPH, Impact of funding reductions on public health, February 2016

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30 August 2016