Making the case for a transformation fund

policy digest

11 / 08 / 2015

Making change possible: a Transformation Fund
Health Foundation/King’s Fund, 21 July 2015

This report jointly produced by The Health Foundation and The King’s Fund calls for a new explicit strategy to accelerate change in the NHS. The authors point to the Five Year Forward View’s suggestion of dedicated funding for the NHS with a view to fast tracking new models of care, a so called Transformation Fund for the NHS in England. Six case studies of funding transformation in the health sector and further afield are highlighted, along with illustrations of local NHS initiatives, which provide lessons on the design and administration of such a Fund. The report also captures experiences from NHS leaders who are at the forefront of implementing changes in the delivery of care. 
Key recommendations include:

  • The NHS needs a single body (whether within an existing organisation or newly created) to oversee the investment for transformative change in the NHS. It should have strong, expert leadership, which is credible to NHS clinicians and managers.
  • Existing disparate strands of transformative funding should be pooled into one Transformation Fund.
  • The Transformation Fund requires £1.5–£2.1bn a year in dedicated funding between now and 2020/21. While bringing together the existing strands will go some way towards this, more resources will be needed above the £8bn increase in NHS funding already announced by the Government. 
  • The introduction of the Fund would involve two phases:
    • The first phase (2016/17–2020/21) would be split into two strands: an Efficiency Strand, which would look to achieve higher rates of efficiency growth across all services, and a Development Strand to invest in new models of care.
    • The second phase (2021/22 and beyond) would focus on widespread roll-out of the successful new models of care. This would include double-running costs associated with these new models.
  • The Fund must be properly resourced to support investment in four key areas, which are essential for successful transformation: staff time to spend away from the ‘day job’ to develop new ways of working; programme infrastructure on national and local levels; physical infrastructure, predominantly improved use of IT; and double-running costs enabling new services to be set up while still providing current services.
  • The Fund should ensure proper accountability for public money. Upward accountability for spending to the Department of Health and/or the Treasury is important, as is clear accountability to those in the NHS who are seeking to implement change. Its investments should be properly linked to, and measured against, core objectives. Keeping distinct core tasks will allow for clarity of purpose and guards against scope creep.
  • Ongoing evaluation should be a core activity of the Fund. This evaluation would need to include both summative (what works) and formative (how it works) components. It must be ‘real-time’ not after the event and feedback to local programmes to shape the evolution of models of care.
  • Further consideration should be given to generating funding through the development of the NHS estate into a long-term sustainable source of new income.
  • The Fund should also have innovation and spread of best practice as twin goals.
  • Funding to invest in the NHS workforce is the largest single component for a dedicated Transformation Fund over the next five years. The authors added that proper investment of staff time is consistently shown to be the most crucial aspect in ensuring success. 
As there is no single robust, systematic evaluation of the different approaches to funding transformation in the NHS, the authors concede that creating a Transformation Fund would be an ‘act of faith’ as it is not possible to produce a robust business case to show what would be gained for any specific level of investment. The authors argue in conclusion that the Fund must not be seen as a one-off project but as a way of operating - part of the DNA of the health service and its funding system.   

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