This document offers a précis of the publication of the NHS operating framework which takes into account the proposed government changes to the structure of the NHS. The operating framework sets out what needs to happen in the NHS over the coming year 2011-12. Given the reforms set out in the Government’s white papers and the efficiency savings envisaged under the Spending Review settlement, as well as the drive to improve quality under the QIPP programme, this will be a year of significant transition for the NHS.

The document states the intention to ‘maintain a strong grip on the system during 2011-12’ and in practice this will involve Strategic health authorities (SHAs) playing a key role until their abolition in April 2012. They will oversee the clustering of PCTs with joint management boards so that the dual challenge of meeting efficiency savings and supporting newly emerging GP led commissioning consortia is met.

The operating framework refers to reductions in the ‘overall running costs of the new NHS superstructure’ which will decrease by one third by 2014/15. This relates to £1.7b worth of running costs.

In addition, the framework:

• Gives an initial indication of the management allowance for GP consortia running costs in the range of £25 to £35 per head of population by 2014/15. The final figure will not be determined until further work has been undertaken with the GP consortia pathfinders.
• Maintains tight financial control of the NHS throughout 2011.12 by PCTs holding back 2% of their allocation to create ‘financial flexibility and headroom to support change’
• Extends the time frame to meet the challenge of £20 billion to the end of 2014/15. The NHS had been working towards meeting efficiency savings of £15-20 billion over the next three years. But the operating framework says that an improved level of funding compared to the scenario in 2009; the adoption of a pay freeze for most NHS staff for two years; and deeper than originally thought reductions in management and administration costs has enabled the time period to be extended.
• Reduces the overall tariff between 2010/11 and 2011/12 by 1.5%. This reduction is achieved through changing the way in which long stays in hospital are funded; reducing all tariffs by 1% as an initial step in policy to set tariffs below the national average level; and off-setting pay and prices uplifts of 2%. The NHS tariff will become a maximum rather than a set price for treatments from April 2011. This signals the introduction of price competition among NHS providers.
• States that PCTs will be given responsibility for securing post-discharge support, with hospitals responsible for any readmissions within 30 days of discharge.
• States that all NHS trusts will become NHS foundation trusts by the end of 2013/14 and that it will not be an option for organisations to decide to remain as an NHS trust.

The Operating Framework for 2011/12 does mention pharmacy and states that:

It is important that NHS organisations continue to maintain and develop pharmaceutical services, including local enhanced services to meet pharmaceutical needs. Optimising the use of medicines in people with newly diagnosed long term conditions, and targeting of Medicines Use Reviews are areas that SHAs and PCTs should actively engage in. In addition, evidence continues to build for the provision of public health services through community pharmacies, as highlighted in Healthy Lives, Healthy People: Our strategy for public health in England.