Improving access to mental health services Contents

1Costs and funding

1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department of Health (the Department) and NHS England on preparations for improving access to mental health services.1 We also took evidence from Andy Bell, Deputy Chief Executive of the Centre for Mental Health, Joe Rafferty, Chief Executive of Mersey Care NHS Foundation Trust, and Dr Gary Wannan, Senior Consultant Psychiatrist at Central and North West London NHS Foundation Trust.

2.Around one in four adults in England is diagnosed with a mental illness at some point in their lives, and may need to use mental health services. Mental health conditions cover a broad range of disorders of varying severity. The most common problems are conditions such as depression, anxiety and panic disorders. In 2014–15, 3.3 million people were known to be suffering from depression. Psychosis is less common but more severe and may affect up to three in every 100 people during their lives. Other forms of mental illness include eating disorders and personality disorders.2

3.The Department is ultimately responsible for securing value for money from spending on healthcare, including mental health services. It sets objectives for NHS England through an annual mandate and holds it to account for the outcomes the NHS achieves. In the 2015–16 mandate, the Department set out its expectation that NHS England would introduce access and waiting time standards in key areas of mental health services by March 2016, as part of its wider objective to work towards ‘parity of esteem’ between mental and physical health. Parity of esteem means that mental health is valued as much as physical health, for example in terms of access to care and allocation of resources on the basis of need.3

4.The Department completed an impact assessment in September 2014 that envisaged a staged implementation of access and waiting time standards across all mental health services between 2015–16 and 2019–20. However, because of the funding available and uncertainty about future policy priorities, the Department and NHS England developed firm proposals for only three specific areas of mental health provision: improved access to psychological therapies, early intervention in psychosis and liaison psychiatry. From a long-list of options, they considered that these three areas had the strongest evidence base supporting the likelihood of positive outcomes for users.4

5.In 2014–15, the Department gave a total of £97.4 billion to NHS England for all NHS services. NHS England directly commissioned around £3.7 billion of mental health services, and clinical commissioning groups an estimated £7.9 billion, together representing some 12% of total NHS spending. Mental health services include a range of interventions offered in community, inpatient and primary care settings, which may need to be integrated and multidisciplinary. Most of the spending is on the cost of staff. Treatment may include medication, such as anti-psychotic drugs, anti-depressants or mood stabilisers, and appropriate psychological therapies.5

The cost of mental health services

6.The National Audit Office reported that limited data are available to attribute spending on mental health services to treatment for different mental health disorders.6 We also heard from the Centre for Mental Health that we need to have real-time data on what is being spent on what.7 The Department agreed that transparency in data is incredibly important, and pointed to work that NHS England has done to track spending better in the future than it had in the past.8 NHS England told us that it has attempted to carry out a reconciliation for every clinical commissioning group comparing last year’s out-turn spending to the goal for increased spending on mental health they had set. NHS England confirmed that, during 2016–17, they were moving to open-book reporting, which would mean clinical commissioning groups would have to be able to show what money they were receiving and how they had spent it.9

7.We asked what was happening to the drug budget for mental health. NHS England explained that clinical commissioning groups are spending about £400 million on mental health drugs prescribed by GPs, a total that NHS England expected to increase about 4% in 2016–17. This spending would not be visible to a mental health trust, because it would appear in GPs’ prescribing budgets rather than in the trust’s own income and expenditure.10 NHS England confirmed that total NHS spending on mental health medication would not be very much greater, because long-term prescribing is done by GPs. In the context of the total £11.7 billion spent on mental health, the cost of drugs represents a small proportion because almost all drugs are off patent.11

8.An estimated 90% of prisoners have a diagnosable mental health problem or substance misuse problem, with 70% having two or more recognised conditions.12 We asked how much of the total budget for mental health is spent on prisons and secure units. NHS England, which is responsible for providing mental health and other health services in prisons, told us that the total health budget for the criminal justice system, including mental health treatment, is £493 million a year. Secure mental health services operated by NHS providers or third parties outside the criminal justice system cost around £1.7 billion a year.13

Funding and health outcomes

9.The Centre for Mental Health questioned whether there is sufficient accountability for how much funding is given to mental health services in each local area.14 NHS England told us that it has commissioned an independent panel to assess the extent to which every clinincal commissioning group is using money appropriately to improve mental health services.15 NHS England emphasised that focusing on funding is a proxy for the availability of high quality services and the outcomes they achieve, and that more of the funding needs to be linked to the outcomes that services achieve. The health service has not in recent years been very precise about what the improvement goals for mental health services should be. NHS England told us that it is now being precise, based on the recommendations of the mental health taskforce, and would become more prescriptive so as to hold the NHS to account for delivering those improvements.16

10.We heard that current payment systems do not act as incentives to promote higher quality or more efficient services. The Centre for Mental Health pointed to the fact that many mental health services are paid for on ‘block contracts’, under which a provider will get paid a certain amount every year rather than being paid for the number of procedures it carries out.17 The Department agreed that it was hamstrung by the fact that so much of the money spent on mental health is hidden within block contracts, making it difficult to make judgements about whether that money is being well spent. The Department emphasised the importance of being able to relate the money being spent to the outcomes being achieved in order to start properly measuring value for money. NHS England and NHS Improvement are working to replace block contracts with one of two alternative models. This would either be a proper capitated budget, under which a provider would be responsible for the local population, or funding would be attached to the episodes of care themselves.18 NHS England confirmed that it is seeking to realign financial incentives.19

11.The Department explained, however, that it had not ring-fenced funding for mental health because that would have distorted local spending, and emphasised that it is trying to strengthen incentives to focus spending around the patient rather than around the service. Around 30% of people who have long-term physical conditions also have mental health issues. The Department told us it wants GPs, clinicians and others to think about what the right package of care is for each patient in the round, taking into account both their mental and physical health issues.20 NHS England’s National Clinical Director for Mental Health added that all trusts would be required to join quality improvement networks that would, over time, show the impact of funding and targets for waiting times.21

Meeting future funding needs

12.Mental health problems cost the economy an estimated £105 billion each year.22 We heard from both Dr Wannan and from the Centre for Mental Health that spending on mental health would free up other resources.23 The Department told us that there is quite a lot of evidence about how much specific interventions save, although the amount varies depending on the particular treatments and on whether they are done well. NHS England pointed to the Centre for Mental Health’s report, Priorities for mental health: Economic report for the NHS England Mental Health Taskforce for evidence of the savings that can be made by investing in mental health services. The Department noted that the way it had prioritised funding for specific conditions and interventions has been partly driven by that cost-benefit analysis.24

13.The Department and NHS England allocated some additional funding to support the access and waiting times programme, totalling £120 million over the two years 2014–15 and 2015–16. However, the amounts are relatively small and commissioners are mainly expected to use their existing budgets to fund improvements in services.25 Furthermore, according to evidence from NHS Providers, only 52% of mental health trusts said that they had received a real terms increase in funding in 2015–16.26 NHS England accepted that in some parts of the country the money is not getting through. In other areas some of the money is going to other parts of the mental health system such as independent providers, GPs and liaison psychiatry services in accident and emergency departments, rather than to mental health trusts.27

14.In written evidence, the British Psychological Society raised a concern that mental health services tended to suffer disproportionate pressure on finances when NHS services more generally were under pressure.28 NHS England asserted that large cost overruns in acute hospitals have crowded out what would have been investment in mental health services and primary care, but that this year it would adjust some spending in acute hospitals to free up resources for mental health.29 Of the funding increases available to the NHS over the next five years, £1 billion has been earmarked to implement the mental health taskforce recommendations.30 We asked whether that money is going to be provided evenly over the next four years. NHS England confirmed that it is not, but that most of the improvement will be seen in 2018–19, 2019–20 and 2020–21.31 NHS England also cautioned that mental health services will need to make the same 2% efficiency savings expected of other parts of the NHS. Furthermore, were there to be a continuing unbudgeted overspend in the acute sector, or any substantial economic shock to the financial prospects of the National Health Service, that would call for a rethink.32

15.We challenged the Department and NHS England over how confident they were that estimates of the cost of meeting access and waiting time targets were accurate, and raised a concern that any underestimate would mean additional funding would not be enough to meet actual need.33 NHS England confirmed that the projected figures should not be treated other than as estimates, but assured us that the waiting time standards are being implemented as part of what the NHS is doing this year.34 NHS England made clear, however, that the need on the ground already outstrips the budget and, while increased funding meant that more people would be able to access services in future, demand will still outstrip even the expanded budget in 2020.35

1 C&AG’s Report, Mental health: preparations for improving access, Session 2015–16, HC 492, 21 April 2016

2 C&AG’s Report, para 1

3 C&AG’s Report, para 3

4 C&AG’s Report, para 2.3

5 Q 122; C&AG’s Report, paras 2, 1.9

6 C&AG’s Report, para 1.10

12 C&AG’s Report, para 1.15