Making change happen: A Transformation Fund for the NHS

The health service in England needs a dedicated fund to finance and drive forward essential changes to services, according to a new report launched today by the Health Foundation and The King’s Fund. The report comes as the Department of Health releases its 2014/15 accounts which reinforce the financial challenges facing the NHS at this time.

Changing population needs combined with a prolonged funding squeeze have placed the service under intense pressure. It is widely recognised that continuing with "business as usual" is not an option – doing so would mean that the NHS is unable to meet the needs of the English population, and would result in a significant funding gap opening up. 

Making change possible: A Transformation Fund for the NHS is the result of intensive research carried out by the Health Foundation and The King’s Fund. The report sets out the case for a dedicated Transformation Fund, which would be independently administered, with the aim of supporting and accelerating changes to the way that health services are delivered. 

The purpose of the Fund would be to enable the shift to new models of care as set out in the Five Year Forward View, as well as helping to unlock the efficiency savings required to balance the books, The Fund would not only deal with the current urgent need for service change but would, in the long term, become a fundamental part of the NHS and the way it is funded.  

Building on the need for additional money to pump prime new services identified in the Forward view, the report argues that more funding is needed over and above the £8bn increase in the NHS budget pledged by the government by 2020, and sets out how the Fund would be administered. 

Key findings from the report 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 clinicians and managers.
• The Transformation Fund requires £1.5–£2.1bn a year in dedicated funding between now and 2020/21. While bringing together 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.
• Key to successful change is the engagement with, and investment in, staff. At its heart the task facing the NHS is to get over one million people to work differently. To do this, front-line staff must have time away from the day job, and this won’t happen unless it is properly resourced.
• Further consideration should be given to generating transformation funding by the development of the NHS estate into a long-term sustainable source of new income.

Anita Charlesworth, Chief Economist at the Health Foundation, comments: 'While we recognise that it is challenging to provide additional funding for the NHS in the context of other services receiving cuts, the alternative is to risk a decline in quality and safety in NHS-funded care and a reduction to the services currently available. Without more resources specifically for transformation, the NHS will be unable to become more productive and the bill for additional running costs will only get larger. The Transformation Fund should become a fundamental part of the DNA of the health service from here onwards.'

Richard Murray, Director of Policy at The King’s Fund, said: 'The fundamental task is to get a workforce of more than one million people to work differently. This would be a huge challenge at the best of times but is an even bigger task when services are under such intense pressure. This cannot be done within the existing resources – dedicated funding is required to deliver the changes needed.'

Media contact

Media contact at the Health Foundation

Mike Findlay
Senior Media Manager
T: 07826 671730
E: mike.findlay@health.org.uk

Media contact at the King's Fund

Patrick South
Assistant Director, Communications (External Affairs)
T: 020 7307 2585
E: p.south@kingsfund.org.uk