STPs may be fundamentally flawed, says HFMA

The Healthcare Financial Management Association (HFMA) has reported that the foundations and frameworks of the sustainability and transformation plans (STPs) may be fundamentally flawed.

According to the association’s latest NHS Financial Temperature Check, which reflects the opinions of over 200 finance directors in England, the majority of finance directors have concerns over the set up of STPs, with 72 per cent concerned about their governance.

STPs have been introduced to transform services and help re-balance NHS finances, but the research has found that only six per cent of trust finance directors and 17 per cent of CCG chief finance officers (CFOs) responding in confidence of delivering both STP and organisational financial objectives.

The survey also found: only 54 per cent of finance directors believe that risks associated with STPs have been recognised; just five per cent believe adequate risk management arrangements are currently in place; 62 per cent of NHS finance directors still say they will prioritise their organisational objectives rather than their STP objectives; and 82 per cent of finance directors believe that the regulatory regime needs to change to support the delivery of STPs.

Despite concerns, 58 per cent of NHS finance directors see clear and effective leadership in place within STPs, while 46 per cent view relations between commissioners and providers as having improved.

Moreover, similar to previous reports, the HFMA research suggests that planned savings for 2016/17 are ambitious and finance directors lack confidence that their organisation can deliver the two per cent to three per cent a year productivity gains needed to close the expected £22 billion NHS funding gap.

Paul Briddock, director of policy at HFMA, said: “Although STPs were met with enthusiasm and positivity when they were introduced, there is scepticism from finance directors that the STP frameworks can work in practice. It is encouraging to see reported improvements in collaboration and some strong leadership in place, but when operating in a ‘club versus country’ framework, where there are conflicting priorities between individual organisations and footprint areas, the lack of clear governance is causing some angst.

“Given it is early days, many organisations are yet to find a balance and there are clearly still issues that will need to be worked through, but doing this in an open and transparent manner will be key to achieving the success we need to see across the NHS.

“Finance directors are calling for more financial realism across the sector, and a frank discussion about what services are affordable in the future. The current numbers don’t add up and are merely a sticking plaster over a much bigger problem. Despite the NHS agreeing that initiatives such as sustainability and transformation plans provide the platform for achieving a more financially balanced NHS, further conversations and collaboration is needed.”