Health funding in Northern Ireland Contents

1Transformation

An ageing population

18.According to most recent estimates Northern Ireland has a population of 1.88 million.25 The population in mid-2018 grew by 10,800 people (0.6 per cent) from mid-2017, mainly due to natural growth (births minus deaths) with some net inward migration.26 Alongside moderate population growth and in common with global trends, the proportion of adults in Northern Ireland aged 65 or older is rapidly increasing. In mid-2018, 308,200 people (16.4 per cent) were aged 65 or older of which 37,700 (2 per cent) were 85 or older.27 This represents an increase of 1.7 per cent and 1.5 per cent respectively from mid-2017.28 By contrast, the number of children aged 0–15 years increased by just 0.7 per cent.29 In the last decade the median age (the age at which half the population is older and half is younger) has risen from 30.4 years to 38.7 years30 and on current trends it is forecast that the number of people aged 65 or older will exceed the number of children aged 0–15 years by mid-2028.31

Figure 2: Projected population of Northern Ireland by age band, 2019–2059

Source: Northern Ireland Statistics and Research Agency, Principal projection—projection summary (2016–2066), 26 October 2017

19.These demographics necessitate a transformation in how health services are structured and delivered. As the population ages the patterns of demand it places on the health service change—incidences of chronic health conditions including cardiovascular disease, hypertension, osteoarthritis and diabetes increase with age as do rates of disability and cognitive conditions including dementia.32 The health needs of a population also become more complex as people age, with older people more likely to be living with multiple chronic conditions at the same time.33

Figure 3: Number of co-morbidities by age band

Source: Age UK, The Age UK almanac of disease profiles in later life, 26 October 2017, page 40

As the number of patients with complex, long-term health needs increases pressure mounts on hospitals, leading to decreased capacity in the acute sector and sub-optimal management of conditions that could be better managed elsewhere.

The transformation agenda

20.In response to these changes, along with rising patient expectations and the opportunities opened up by technological advances, a broad consensus has developed around the need to move away from the acute care model centred on hospitals and towards a more community-based, integrated model of patient-centred care. A number of strategic frameworks have laid the groundwork for this approach, including Caring for People Beyond Tomorrow (2005) which sets out a 20-year framework for the transformation of primary care; Transforming Your Care (2011) which made a number of recommendations on the future shape and direction for health and social care services; and The Right Time, The Right Place (2014) which examined the application of health and social care governance arrangements.

21.The current direction for health and social care reform in Northern Ireland was set out by the clinically-led, expert panel chaired by Professor Rafael Bengoa in 2016 and appointed with the remit of delivering “the configuration of health and social care services commensurate with ensuring world-class standards of care”34 as recommended by Sir Liam Donaldson in The Right Time, The Right Place (2014). Its report, Systems, Not Structures (usually referred to as the Bengoa report) found an “unassailable case for change”35 with the existing system struggling to sustain services in the face of changing circumstances. Along with pressures on the HSC from rising patient demand the report also identified severe difficulties in recruiting and retaining staff;36 insufficient capacity in the social care sector impacting on acute care capacity;37 and financial unsustainability—estimating that as currently configured the HSC would require at least a 6 per cent budget increase year on year merely to maintain current levels of performance.38 The review concluded that:39

Without systematic and planned change, already stretched services will undoubtedly be forced into unplanned change through fire-fighting and crisis. The stark options facing the HSC system are either to resist change and see services deteriorate to the point of collapse over time, or to embrace transformation and work to create a modern, sustainable service that is properly equipped to help people stay as healthy as possible and to provide them with the right type of care when they need it.

22.The report contained a number of recommendations for the direction and delivery of service transformation. It highlighted the fragmented and reactive nature of the current model and advocated a move towards ‘accountable care systems’ whereby the provider sector—encompassing primary care, the HSC Trusts and the independent and voluntary sectors—adopt collective responsibility for the health and social care needs of defined populations under joint budgets. This would enable better continuity of care for patients; better integration across services and professions; a structure in which patients could participate actively in their own care; a shift in accountability to the provider level; and ultimately better outcomes. It highlighted Integrated Care Partnerships and GP Federations as model examples of existing networks to be built on.40 The report also recommended investing in eHealth and empowering non-medical staff, such as nurses and pharmacists, to make the best use of their skills.41 While advocating transformation as the only long-term solution, the panel also acknowledged that excessive waiting times for elective care had damaged public trust in the HSC and that efforts should be made to stabilise the system in the short-term.42 To enable service transformation the panel recommended establishing a dedicated, ring-fenced transformation fund.43

23.Bengoa was followed up the same year by Delivering Together (2016)—a 10-year road-map for transforming health and social care based on Bengoa’s recommendations. The strategy reiterates the challenges identified in Bengoa, namely the negative impact of current delivery models on the quality and experience of care for service users;44 the thin spread of HSC resources across an excessive number of sites;45 difficulties in filling vacant posts and an over-reliance on locums;46 rising demand and pressures from an aging population;47 and the need to tackle health inequalities.48 The strategy aimed at an holistic, person-centred approach to health and social care with a focus on “prevention, early intervention, supporting independence and wellbeing”49 with care to be designed in collaboration with service users and communities through close partnerships across organisational boundaries and delivered as close to home as possible.50 It advocated: co-production and co-design of services under a model of partnership working;51 integrating quality improvement systems into HSC organisations and establishing an Improvement Institute to support developments in patient safety, regulation, evidence gathering, data analytics and user experience;52 investment in the HSC workforce and the development of a workforce strategy to cover recruitment and retention, new job roles and reskilling and upskilling initiatives;53 a flattening of unnecessary hierarchies to facilitate professional engagement in the management and leadership of services;54 and better use of technology and data to improve outcomes for patients and free up time for front line staff.55

24.As part of the Confidence and Supply Agreement, £200 million of funding was made available over a two-year period beginning in 2018–19 to resource these aims. In 2018–19, £100 million was allocated to the following areas:56

A further £100 million, together with £16 million re-profiled from the previous year, has funded a number of transformation projects into 2019–20. These include:57

Delivering transformation

25.The Committee heard unanimous support for the transformation agenda as set out in Bengoa and Delivering Together. However, significant concerns were raised over the non-recurrent, year-on-year funding model for delivering transformation. The Chartered Society of Physiotherapy told us that Delivering Together “requires a longer-term budget commitment to deliver it, rather than current care and maintenance approach where emergency budgets are allocated one year at a time.”58 The Northern Ireland Commissioner for Children and Young People told us that “long-term transformational change requires long-term strategic planning that is matched with the required public funding to deliver it.”59 She added that:

Across the health and social system, multi-year funding is essential to develop longer term plans, that are needed to address pressures across the system, rather than relying on short term initiatives and funding top ups.

26.This was a view shared by Action for Children, who told us that “transformative investments need to take a longer-term approach and not just cover a one to two-year Budget period.”60 The Royal College of Surgeons of Edinburgh expressed “major concerns” that “the £100m [transformation fund] is a ‘sticking plaster’ without a long-term strategy and the foresight to ensure that the funds are used as effectively as possible.”61

27.The Committee heard how the deployment of transformation funds in the absence of long-term financial planning had led to sub-optimal results and in some cases created additional problems. The Royal College of Occupational Therapists raised the issue of posts being recruited on a temporary basis within the context of protracted financial uncertainty.62 Ulster University told us that transformation funds received by the University to support workforce development could not be used to plan effectively in the absence of recurrent funding:63

As a result of confidence and supply funding, Ulster University has received an increase in the number of student places commissioned by the Department of Health for students beginning their studies in 2018. Whilst these increases are very welcome, the additional places will only be granted for this year, meaning we must plan to revert to the 2017 figures for each of these courses next year. The lack of long-term funding makes it difficult, not only for the University but for the whole sector to plan effectively, including the Department of Health itself.

The Royal College of Nursing placed the inadequacy of the current funding model within the broader context of a political situation that can not deliver on the sustained and meaningful change needed, noting that:64

Transformation of the health and social care system in Northern Ireland is a long-term process that is dependent upon an elected Assembly and Executive in addition to a number of factors, particularly workforce planning and development, and capital investment in the HSC estate, that are in themselves long-term. We do not believe that transformation in any meaningful sense will ever happen within the constraints of annual budgets, extraneous and non-recurrent sources of funding, or whilst there exists a simultaneous requirement to “balance the budget.” [ … ] Transformation requires committed and secure investment over a three–five year (at least) timeframe. It will not be delivered, or even meaningfully “pump-primed” in our judgement, through “funding in the short-term.”

28.The Health and Social Care Board confirmed that there had been difficulties in deploying non-recurrent funding, telling the Committee that “to go from a standing start to £100 million of spend for just two years is [ … ] extremely challenging.”65 When asked whether this approach could be wasteful, the Director of Finance told us:66

I think the projects that we are spending the funds on are the types of things that, if we had more funding in our core services, we would want to be doing anyway, but because our core budget [ … ] is so constrained, we have very little development funding. I do not believe that any of the money from transformation will be wasted—far from it. I think that it allows us to pilot things in certain areas to ensure that they work before they are then bid for full recurrent funding to roll out to the whole of Northern Ireland.

The view that non-recurrent funding had been limited to preparatory work rather than on making truly transformative, long-term changes was also voiced by the Chief Medical Officer, Dr Michael McBride, who told us that transformation funding had allowed the Department to “do much preparatory work [ … ] to put in place the foundations for a transformed health and social care system” but that “making permanent changes to the service model, making fundamental commitments to change in policy or strategy, or committing resources in the long term, will require the machinery of government and Ministers to be in place to make those decisions.”67 In correspondence with the Committee, the Department of Health noted that “delivering the transformation agenda will require additional investment over a sustained period over and above what is required to run existing services, until the impact of transformation has been realised.”68

29.Transformation of Northern Ireland’s health and social care services in line with the aims and recommendations of Bengoa and Delivering Together is needed urgently if services are to keep pace with the increasingly complex and evolving needs of an aging population. The Committee welcome funding ring-fenced for this purpose. However, the current model of non-recurrent funding over a two-year period is not suited to delivering the truly transformative and sustained change required. We recommend that, if an Executive is not in place by the end of this year, the UK Government work with the Department of Health and the Department of Finance to secure a multi-year funding settlement ring-fenced for transformation.

Annual budgets

30.The commissioning and budgetary cycle is currently set on an annual basis. We have heard how this is impeding long-term planning and service transformation. Dr Michael McBride told the Committee that annual budgets were not suited to delivering transformational change:69

Unfortunately and regrettably over the last number of years, we have been largely dependent on in-year monetary rounds and non-recurrent funding. It is very difficult and challenging to bring about change in the health service in a financial year. It is very difficult to bring about transformation when you have money that is non-recurrent. You need to recruit staff. You need to put new services in place. Longer-term budgetary cycles, more certainty, examination of what our baseline budgetary position is, and a continuation of moneys to allow us to transform the health service and that being ring-fenced, would be very advantageous.

31.The Northern Ireland Council for Voluntary Action drew attention to the impact successive annual budgets were having on the community and voluntary sectors:70

One-year budgets fuels stagnation and destroys proper planning. This is true for Northern Ireland as a whole, and particularly for voluntary and community sector organisations that have a financial arrangement with government, for whom year-on-year uncertainty around continued funding and successive annual reductions in funding undermine organisations’ ability to retain staff and sustain services.

32.Staffing difficulties under single-year budgets were also raised by Ulster University, which drew attention to the high vacancy rate for nurses in Northern Ireland, noting that due to the investment and planning required in the recruitment and training of nurses “a sustainable model of funding and commissioning is crucial to the future development of the nursing workforce.” The University went on to “strongly recommend moving towards a three-year commissioning plan for pre-registration and post-registration nursing commissioning, and ensuring that appropriate levels of resource are allocated.”71 Moves towards a minimum three-year budgetary cycle were also advocated by the British Red Cross. They told us that this would “provide a greater level of stability and enable implementing the vision of Delivering Together” and that “such a plan should be developed in partnership with patients, professionals and the wider sector, including the community and voluntary sector, and apply for all providers within the system.”72

33.Inspire, a charity and social enterprise delivering mental health-related services on the island of Ireland, was critical of the reluctance of the Government to revisit this funding model in the absence of a functioning Northern Ireland Executive:73

Continuing a failing funding formula cannot be said to be a sufficient legislative or political approach by Westminster. Any political response from a Westminster perspective that, if Northern Ireland wishes to manage its public services itself it should encourage its representatives to reach an agreement to reactivate the Stormont institutions, is counter-productive [ … ] because overseeing the continued decline in health and social care provision will make restarting institutions and more pertinently, remedying the health service crisis more difficult.

34.A 2016 report by the Northern Ireland Assembly Public Accounts Committee supported calls for multi-year budgetary cycles. It noted the dependency of HSC Trusts on substantial financial support through in-year monitoring rounds that had the potential to mask underlying financial management difficulties and advocated a move towards three-year budgets to avoid annual constraints and place the Trusts on a sustainable footing.74 In December 2018, the Northern Ireland Audit Office also advocated longer term financial planning and commissioning to “help move Trusts away from ‘firefighting’ short term pressures, and assist them in developing longer-term and better value for money solutions.”75

35.The Department of Health told us that successive annual budgets combined with the need to reduce costs was impeding long-term change as the investment needed is unable to deliver savings in a single financial year:76

We have been faced with consecutive single year budgets and the need to identify significant reductions in costs on an annual basis. The resultant impact is a focus on measures which can be taken to reduce costs, rather than measures which should be taken, as such measures will only have an impact in the longer term, and cannot deliver savings in a single financial year. Consequently, a short term focus means that cost reduction proposals may be counter strategic in nature and could result in increased cost pressures in future years. The challenging financial circumstances mean that hard choices are unavoidable and that there will be very limited scope for in-year additional initiatives to counter rising hospital waiting times and growing pressures elsewhere in the system. Without adequate funding being secured in future years, service reductions will be necessary across health and social care.

36.When asked by the Committee whether it would be helpful for the Secretary of State to legislate beyond the current financial year, the Permanent Secretary at the Department of Health told us: “I would not only welcome a budget for 2019–20; I would love a budget for the next two or three years to undertake that long-term planning. I think I could make bigger, more significant change in that context.”77

37.Successive one-year budgets are impeding planning and investment in Northern Ireland’s health and social care services. Without a long-term approach the measures needed for improving outcomes and delivering value for money cannot be taken. We recommend that, following consultation between the Department of Health, the HSC Trusts and the community and voluntary sectors to determine budget priorities, the UK Government work with the Department of Health and the Department of Finance to produce three-year minimum budget allocations. This should be implemented from the next budget.


25 Northern Ireland Statistics and Research Agency, 2018 Mid-year Population Estimates for Northern Ireland, 26 June 2019, page 1

26 Ibid., pp. 2–3

27 Ibid., page 9

28 Ibid., page 1

29 Ibid., page 7

30 Ibid., page 5

31 Ibid., page 5

33 Age UK, The Age UK almanac of disease profiles in later life, 26 October 2017, page 40

34 The Right Time, The Right Place, December 2014, page 44

36 Ibid., page 22

37 Ibid., page 21

38 Ibid., page 33

39 Ibid., page 11

40 Ibid., pp. 42–44

41 Ibid., page 51

42 Ibid., page 64

43 Ibid., page 57

45 Ibid., page 6

46 Ibid., page 7

47 Ibid., pp. 7–8

48 Ibid., pp. 8–9

49 Ibid., page 11

50 Ibid., page 11

51 Ibid., pp. 20–21

52 Ibid., page 21

53 Ibid., page 22

54 Ibid., pp. 22–23

55 Ibid., page 23

58 Chartered Society of Physiotherapy (HTH0040)

59 Northern Ireland Commissioner for Children and Young People (HTH0049)

60 Action for Children (HTH0020)

61 The Royal College of Surgeons of Edinburgh (HTH0046)

62 Royal College of Occupational Therapists (HTH0008)

63 Ulster University (HTH0036)

64 Royal College of Nursing (HTH0037)

65 Q5

66 Q8

68 Department of Health (NI) (HTH0050)

70 Northern Ireland Council for Voluntary Action (HTH0038)

71 Ulster University (HTH0036)

72 British Red Cross (HTH0032)

73 Inspire (HTH0045)

74 Northern Ireland Assembly Public Accounts Committee, Report on General Report on the Health and Social Care Sector 2012–13 and 2013–14, 20 January 2016, pp. 11–12

75 Northern Ireland Audit Office, General Report on the Health and Social Care Sector, 18 December 2018, page 3

76 Department of Health (NI) (HTH0050)




Published: 2 November 2019