Question to the Department of Health and Social Care:

To ask Her Majesty’s Government whether, before withdrawing supplementary funding for the highly specialist work carried out at tertiary and teaching hospitals in England, they carried out an impact assessment of the effects of such a withdrawal on medical research; if not, why they did not do so; and if so, whether they will publish that assessment.

The supplementary funding, known as Project Diamond funding, was provided by the former London Strategic Health Authority in recognition of arguments made by providers about the higher costs of tertiary and teaching hospitals both for research and service provision. The research component was subsequently taken on by the Department, and the service component was taken on by NHS England.

In the case of research funding, the Department’s view is that the approach to funding already recognises the higher costs of providing services. For example, a large part of funding is bids based. In bidding for research funding, providers will have taken into account all the costs they face. Any supplementary funding would be double-counting costs. Consequently the Department does not expect an impact on medical research from withdrawing funding as existing funding streams should meet all costs.

In the case of funding for specialised services to patients, 2014/15 was the final year of supplementary funding provided by NHS England. Refinements to the National Tariff are being made, including the introduction of HRG4+, that make a significant improvement in recognising the additional costs associated with patient complexity. However no payment system can perfectly reflect patient complexity and other local issues. Monitor have a published process for providers who wish to seek an amendment to tariff prices, known as the local modification process.