Brian Ferguson: Treasury should end its obsession with public health spending


By the government’s logic, NHS preventative services should have to show they will save councils money, writes the professor in the Department of Health Sciences at the University of York and former chief economist of Public Health England.

When the Treasury recently emphasised its need for data to allow “effective challenge” of how public health funding is spent, the public health community rolled its eyes and thought ‘here we go again’.

In his comments to the House of Lords public services committee in April, chief secretary to the Treasury Steve Barclay also highlighted how last year the prime minister “asked Andrea Leadsom to do a review of the earlier years in order to look at whether the public health grant could be spent more effectively in certain areas”.

No one, least of all public health professionals and others who work in local government, would question the need to assess the value for money of services that are commissioned or delivered – but when will the NHS be subject to the same rigours? Over the years it has become tempting to conclude that regularly probing how £3bn is spent is so much more manageable than how £130bn is spent.

And this despite years of evidence from the National Institute for Health & Care Excellence that investing in public health interventions is typically good value for money. More recently, researchers at the University of York concluded that spending on public health is around three to four times more productive at the margin than spending money on treatment services. Much work has been done to assess the return on investment from various areas of public health spending, with more detail and rigour than can be found on NHS spending.

So all of this begs the question of what level of evidence would persuade HMT to stop ‘picking away’ at the public health grant and start to focus on bigger fish. Instead, public health or preventive interventions have to get over a ‘higher bar’ – demonstrating that they have to be both cost-effective and save the NHS money. Should NHS preventive services similarly have to demonstrate that they will save local government money?

What level of evidence would persuade HM Treasury to stop ‘picking away’ at the public health grant and start to focus on bigger fish?

The other obsession that rears its head regularly is the question of variation: how can it be that things like health checks or weight management services can differ across local authorities? There is a good reason why NHS atlases of variation are produced – the clue is in the name. But the question of variation is not whether there is any, but instead attempting to distinguish between justified (or explained) and unjustified (or unexplained) variation. In his 2016 review of efficiency in hospitals Lord Carter (Lab) highlighted that up to £5bn – roughly 1.5 times the total public health grant – could be saved in the NHS if “unwarranted variation” in the acute sector was tackled.

One of the reasons costs vary across the country relates to markets, a concept with which Treasury colleagues will be familiar. For example, in London there are many more potential providers for a range of services, whereas in rural areas the scope for commissioners to reduce costs or improve efficiency through testing the market is likely to be less. A more sophisticated approach is therefore required to understand local variation and where there is potential for efficiency savings.

The additional funding for the public health grant essentially amounts to 0% real growth at best – the public health grant has stopped being cut, at least for now. But the grant has not increased anywhere near in line with NHS spending, which increases by several percentage points in real terms without a serious value for money question being asked.

The experience of the past 18 months should leave no one under any illusions that investing in prevention and resilient health protection systems is essential. Failing to seize the day now in relation to spending on prevention will simply continue to stack up problems for future generations. Recognising that the NHS will spend the next few years getting back to where it was pre-pandemic, the solution is not to ‘raid Peter to pay Paul’. Indeed the suggestion, implicit in several recent ministerial pronouncements, that the NHS will essentially undertake prevention at scale is wholly unrealistic given its track record and the inevitable priority to focus on recovering lost ground on elective surgery and waiting lists over the next few years.

The solution is to commit serious additional investment to prevention, not continually pick at the value for money from one part of the health and social care system. There is nothing unrealistic about finding such investment – it was found during the pandemic. Political will needs to be matched by hard cash, not trying to squeeze the pips from the same orange.

The recent report on levelling up health co-authored by former ministers Damian Green MP (Con) and Lord Filkin (Lab) is in a long line of worthy reports that have called for ‘transformation funds’, ‘prevention funds’ or ‘health improvement funds’. The concept is correct, but the name doesn’t matter; as Nike says, “just do it”.

Brian Ferguson, former chief economist, Public Health England; professor in the Department of Health Sciences, University of York



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