NEWS XXXX
NHS trusts faced with ‘unprecedented’ deficits as demand soars
NHS service providers are faced with ‘unprecedented’ deficits due to demand pressures and the need to maintain care quality, official figures have revealed.
Two-thirds of hospital trusts are either in deficit or forecasting one at the end of the financial year.
In the first three months of the financial year, Monitor revealed that the foundation trust (FT) sector had racked up a deficit of £167m, compared to a planned deficit of £80m. Of the 147 NHS FTs, which make up two-thirds of all NHS trusts, 86 reported a deficit (of which 80% were acute trusts).
The FT sector failed to meet the 95% target for A&E four-hour waits in Q1 2014, with a performance of 94.8%. Attendances hit 2.7m, a 3.5% like-for-like increase on the previous year.
Monitor says the reason is “unclear” but that it is the severity and complexity of cases causing the A&E under-performance more than the rise in attendances itself.
Many managers and commenta- tors have noted that what used to be considered ‘winter pressures’ are now year-round.
The NHS Trust Development Authority (NHS TDA), which oversees the 98 non-FT NHS providers, also reported, for the four-month period to 31 July
2014, that their aggregate deficit was £300m, compared to a planned £224m.
Mental health and community providers reported net surpluses – it is the acute sector driving the deficits. NHS TDA is continuing to investigate the causes of the record demand.
Spending on temporary and agency staff rockets
Monitor says increased FT activity, when combined with the continuing need to make cost savings and an over-reliance on expensive agency staff, is putting trusts under unprecedented pressure.
It was revealed that FTs spent £391m on contract and agency staff, double the £189m they had planned.
Dr David Bennett, chief executive at
Monitor, said: “NHS FTs
are striving to overcome the challenges they face while still meeting patients’ expectations for quality care. However, we believe trusts can make further progress by improving their planning, aggressively
implementing best
operational practices and working more effectively across local systems.
“In particular, getting a greater grip on their staffing costs, especially for agency staff, will help trusts increase their financial resilience.”
6 | national health executive Sep/Oct 14 ‘You get what you pay for’
The Foundation Trust Network (FTN) said the figures from Monitor and NHS TDA confirm what its members have been telling it about the “huge, unfunded investment they are making in quality and the unceasing demand for NHS services”.
Its chief executive Chris Hopson said the figures “show the cost of investing in quality and dealing with increasing demand”.
He added: “They should come as no surprise, as we and others have been predicting this for some time. They provide a dose of realism about the true costs of meeting rising demand and investing in greater quality. You get what you pay for.”
But a DH spokesman said the NHS budget has risen by £12.7bn over this Parliament, and that it is up to trusts to get a grip on their finances.
“Delivering high-quality services and balancing the books must go hand in hand and we expect trusts to achieve this during the course of the financial year or there will be tough consequences,” he added.
Richard Murray, policy director at the King’s Fund, added that the figures were “significantly” worse than expected and provide yet more evidence that the “NHS
is heading towards a financial crisis”.
“Unless significant extra funding is found, patients will bear the cost as staff numbers are cut, waiting times rise and quality of care deteriorates,” said Murray.
“Emergency support is needed for otherwise sound organisations that are running up deficits as a result of the unprecedented pressures on their budgets.”
Incessant demand
Dr Peter Carter, chief executive and general secretary of the RCN, added that the figures highlight a “really worrying situation”, which shows how fragile NHS finances are.
Rob Webster, chief executive of the NHS Confederation, which launched its 2015 Challenge Manifesto in September, said the financial crisis was another reason why the NHS needs a long-term funding settlement and pump priming money for change projects.
He said: “We have been warning for some time that NHS trusts will fall further into deficit as they try to balance rising demand for care against flat funding. These figures are more evidence of the incessant demand faced by our members this year and the impact on their finances as they strive to deliver safe care every hour of every day.”
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