NHS trust boss resigns in protest over underfunding of health services

Denis Campbell Health policy editor
Hospitals are fighting against ‘inexorable pressures’ of rising demand, increased costs and the tightest restraints on spending in recent times, Bob Kerslake claims. Photograph: Peter Byrne/PA

The boss of one of the NHS’s biggest trusts has resigned in protest at what he claims is such serious government underfunding that hospitals cannot perform their key role properly.

Bob Kerslake, who was the head of the civil service until 2015, is quitting as the chairman of the board at King’s College hospital in London, after a long-running dispute with the NHS watchdog over its finances. Ministers are in denial about the reality of how much extra money the NHS requires, he says.

In an article for the Guardian, Lord Kerslake, a highly respected crossbench peer and former permanent secretary at the Department for Communities and Local Government, explains that he is stepping down because hospitals are being asked to agree to meet unrealistically demanding savings targets.

“My two and half years at King’s have been in equal parts inspiring and frustrating. There are undoubtedly things that I and the trust could have done better – there always are – but fundamentally our problems lie in the way that the NHS is funded and organised. We desperately need a fundamental rethink. Until then, we are simply kicking the can down the road,” says Kerslake.

His move comes days before NHS Improvement, which regulates the health service’s finances in England, is expected to put King’s into “financial special measures” over its inability to stick to its budget for this year. Kerslake says that, despite reducing its spending on agency staff, its financial situation has worsened since it took over the troubled Princess Royal hospital in 2014.

“The hospital has struggled financially since it took on responsibility for another hospital, the Princess Royal University hospital in Bromley, in 2014. When I became chair in April 2015, the underlying annual deficit was in excess of £140m. Since then, major and positive changes have made in how the hospital is run. Savings of £80m, twice the average of other hospitals, have been delivered in each of the last two years.

“Spending on expensive agency staff and consultants has been drastically reduced. Despite making savings, we have continued to perform well on cancer waiting times and have some of the best health outcomes in the country,” Kerslake adds.

“But King’s, like many other hospitals, is fighting against the inexorable pressures of rising demand, increasing costs of drugs and other medical supplies, and the tightest spending figures in recent times. It was this squeeze that led Simon Stevens, the chief executive of the NHS, to argue publicly and rightly for an extra £4bn a year in the recent budget. In the event, the extra resources in the budget fell far short of that. Social care, critical to the health service because of its impact on discharges from hospital and facing an equal if not greater challenge, got nothing.”

Kerslake’s reputation, his readiness to speak his mind and his long track record of senior positions in the public sector could prompt a renewed focus on government funding of the health service. NHS England’s leadership is locked in a public dispute with ministers over what they claim is the denial of sufficient funds to the health service.

Stevens has stated bluntly since Philip Hammond’s budget that the chancellor’s refusal to provide the £4bn extra he said the NHS needed in 2018-19 would mean greater rationing of care, longer waiting times and other “painful” choices about what a cash-strapped health service could and could not afford.

King’s is one of the NHS’s busiest hospital trusts and has forged an international reputation for its often pioneering work in areas such as neurosciences, haematology, liver disease, diabetes and cardiovascular disease. As one of the capital’s four regional trauma centres, it treated victims of the Westminster Bridge and London Bridge terror attacks and the Grenfell Tower fire earlier this year.

Prof Anita Charlesworth, the director of research at the Health Foundation thinktank and a former head of public spending at the Treasury, backed Kerslake’s claim that the NHS’s financial problems were due to underfunding.

“Hospitals in the NHS are caught between a rock and a hard place. Emergency admissions have increased by 3.4% in the first half of this year, there is a shortage of 30,000 nurses and it has proved really hard to free up beds occupied by people who are medically fit to leave but need social care support,” she said.

“This would be challenging in the best of circumstances, but at the same time as pressures mount funding is simply not keeping pace.”