The financial situation of the NHS is getting worse. The latest quarterly monitoring report from the King’s Fund shows that NHS trusts are forecasting an end-of-year net deficit of around £2.3 billion. The estimate, based on survey responses from 83 trusts, comes as NHS national bodies are imposing stringent financial controls in an effort to reduce the deficit to £1.8 billion by the end of the financial year. There is a risk that the Department of Health will breach parliamentary protocol by overspending its budget.
Key findings from this quarter’s survey include:
Responding to the King’s Fund quarterly report, Paul Healy, Senior Policy Advisor on Economics and Regulation, NHS Confederation said: “NHS leaders know the status quo isn’t sustainable and are working hard to join up across the health and care system, so as to be more efficient, deliver better value and offer a more individual service for the public. This survey shows up many of the challenges facing the service at this particular point in time and highlights a broader signal from leaders on the need to overcome these through a process of transformation”.
“A new approach to value needs to be stitched into the fabric of the health and care system, which moves away from a technical focus on reducing the costs of current services to a coordinated attempt to get more out of resources within a defined budget. What this means in practical terms is less reliance on cutting the prices paid to hospitals, which has impacted on the bottom line of providers, and more emphasis on transformation across the system through new models of care and effective commissioning”.
“While this is an enormous challenge, it is achievable if national bodies keep working to support strong local leadership and enable them to build on the significant savings delivered in the last five years to ensure the NHS is sustainable and continues to deliver good value for taxpayer funding.”
In January Monitor and the NHS Trust Development Authority issued a financial “control total” to every trust in England for 2016-17, which they had to accept to secure their share of the £1.8bn “sustainability and transformation fund”. This fund was promised as immediate cash flow by after Simon Stevens’ put pressure on the government. According to the HSJ two-thirds accepted the deal in their draft plans for the coming financial year, many only with conditions attached.
A common reason for not accepting the target was that the control totals were based on trusts’ financial positions at the end of October, so trusts which had experienced deterioration after October had not seen this reflected in their offer. Another was that one-off income had not been discounted, so trusts that received large amounts of non-recurrent funding in 2015-16 effectively had a tougher target next year.
One anonymous respondent to the HSJ story said: “some Trusts have accepted figures they stand absolutely no chance of achieving, solely because of the perceived consequences of not accepting. This is against a backdrop of declining financial performance (suggesting almost all of them are going the wrong way in reality, declining target attainment, rapidly rising mortality (causal effect not yet established) and the single biggest decline in public satisfaction. On top of that, the collapse in primary care, summer of junior discontent and the consultant contract ‘negotiations’ still to come…”
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