Treasury launches review into how to shift investment to primary care

The Government will undertake a review focusing on how to shift funding from hospitals into primary and community care, including testing new financial flows.

The Treasury has announced reviews into ‘wasteful spending’ in four areas – bringing healthcare out of hospitals; homelessness; the provision of youth services; and the management and maintenance of public sector assets. 

It confirmed to Pulse that the healthcare review was launched to strengthen the Government’s work to shift activity and investment from hospitals into primary and community care, and in this testing new financial flows and delivery models at selected sites.

Announcing the review, the Government said: ‘As healthcare has become increasingly centred around hospitals, community, primary care, mental health, social care and local services have been left working in silos – driving inefficiency and making the system harder for patients to navigate.

‘The healthcare review will highlight these challenges and establish better how the government can deliver the shift of healthcare back to communities in a sustainable way across the NHS.’

The chief secretary to the Treasury will lead the reviews, working with relevant secretaries of state and ministers as they identify ‘wasteful spending’ in their departments and make recommendations to improve value for money in these areas. 

These recommendations will inform the next spending review, which will take place in 2027, the Government added.

Shifting funding from hospitals to community is a key pillar of the the Government’s 10-year plan for health published last year although it did not clarify how funding flows would shift to enable the goal.

BMA chair of council Dr Tom Dolphin said that doctors support the broad principle of shifting more care into the community, but there are ‘many outstanding questions about the “how”’.

He said that any shift to community care must mean ‘a genuine new investment’ in general practice, mental health services and other neglected services, not a divestment of secondary care.

Dr Dolphin also argued that the efficiencies of general practice, receiving only 34p spent per patient per day in England, ‘do not need new reviews to be explained to us’.

He told Pulse: ‘Rooting out inefficiencies and duplication is fine in principle: no one benefits from a fragmented system in which the left hand does not know what the right hand is doing, and doctors are all too aware that the way the NHS is currently set up is confusing, frustrating and often damaging for patients.

‘If this review into NHS funding can help simplify the transition into a more patient-centred and community-based service then it is good news.

‘Crucially, reviews like this should not form an excuse to cut funding from already cash-strapped hospital care. Running the NHS as ragged as we have for the last couple of decades has left little fat to trim.’

RCGP chair Professor Victoria Tzortziou Brown said that for reforms to succeed, they must be ‘supported by sustained investment and realistic planning’.

She said: ‘If we are going to shift more care out of hospital and into the community, funding and resources must follow, rather than simply transferring pressure from one part of the system to another.

‘General practice is already under significant workforce and workload pressure and cannot safely absorb additional responsibilities without this support. Strong, well-supported general practice plays a vital role in prevention, continuity of care and in reducing avoidable demand elsewhere in the NHS and wider care system.

‘The College would welcome the opportunity to contribute to these reviews, bringing frontline clinical insight to help distinguish genuine inefficiencies from activity that is essential to safe, high-quality patient care, with a continued focus on patient wellbeing, workforce sustainability, and community-based care.’

The National Association of Primary Care’s clinical chair Professor Andy Brooks pointed out that inefficiency in healthcare ‘rarely comes from duplication alone’.

He told Pulse: ‘We welcome the government’s focus on improving value and reducing waste across public services. From NAPC’s experience, inefficiency in healthcare rarely comes from duplication alone, but from fragmented decision making and a lack of shared accountability for people and place.

‘Real efficiency is created when general practice and neighbourhood teams are enabled to take responsibility for a defined population — supporting people to stay well, preventing avoidable escalation, and making high quality clinical decisions close to home.

‘If reviews focus only on moving activity out of hospitals or reorganising structures, they risk repeating past failures.

‘Sustainable improvement comes from investing in neighbourhood capability, continuity and clinical stewardship — with hospitals acting as a vital safety net, not the organising centre of care.’

Chief secretary to the Treasury James Murray said: ‘These reviews will scrutinise government programmes to ensure they improve people’s lives while rooting out wasteful spend from the public sector.

‘We have a duty to taxpayers to make sure every pound of their money works as hard in government as the people who earn it.’

Last month, an analysis conducted as part of the 10-year health plan recommended that the Government should consider different ways of funding general practice – including partial payment for a GP practice only being ‘released’ if ‘a certain proportion of patients confirmed they were satisfied with the waiting time before their appointment’.

And the National Institute for Health and Care Research (NIHR) has been asked by the Government to produce an ‘overall recommendation’ on replacing the Carr-Hill formula for GP funding, which could include a departure from the existing approach.

Pulse exclusively revealed that GP leaders had been told the review may have to be ‘cost neutral’.