PM told to face up to realities of NHS funding

The NHS funding gap increased by 185 per cent in 2015/16, according to a report by the National Audit Office.  Picture: Peter Byrne/PA Wire
The NHS funding gap increased by 185 per cent in 2015/16, according to a report by the National Audit Office. Picture: Peter Byrne/PA Wire
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Health officials are making “pie in the sky assumptions” about closing the NHS funding gap and must face up to the service’s “endemic” financial problems, an MP has warned.

Meg Hillier, chairwoman of the Public Accounts Committee, urged the Prime Minister to address “realities of increasing deficits in NHS trusts” following the publication of a National Audit Office (NAO) report which highlighted that NHS trusts’ deficit grew by 185 per cent in 2015/16.

Provider trusts’ overall deficit was £2.45bn, up from £859m in 2014/15, meaning the NHS began the current financial year with a “worse than expected starting point”. This could hamper plans to close the estimated £22bn gap between patients’ needs and resources by 2020/21, the NAO said.

The Department of Health, NHS England and NHS Improvement believe £6.7bn of efficiency savings can be made through measures that include capping public sector pay and renegotiating contracts, the NAO reported.

The bodies also estimate that trusts and commissioners can save another £14.9bn by “moderating the growth in demand for healthcare services” and making two per cent productivity and efficiency improvements.

But, the NAO warned: “We found limited testing by the Department, NHS England and NHS Improvement of their estimates of how much they expect to generate from their savings programmes. This raises concerns about whether planned savings can be achieved.”

Amyas Morse, NAO head, said: “With more than two-thirds of trusts in deficit in 2015-16 and an increasing number of clinical commissioning groups unable to keep their spending within budget, we repeat our view that financial problems are endemic and this is not sustainable.”

Commenting on the report, Ms Hillier said: “The Department of Health, NHS England and NHS Improvement are making pie in the sky assumptions to maintain they can still close the forecast gap in funding by 2020-21.

“This year, they already had deficits of £461m three months in, despite getting £450m of sustainability funding.

“Again, I call on the Prime Minister to address the realities of increasing deficits in NHS trusts, long-term workforce problems, unrealistic efficiency targets and the impact these financial stresses are having on the quality of services.”

Prof Jane Dacre, president of the Royal College of Physicians, said: “Not only is the NHS struggling to balance today’s books, but it is unable to invest in new plans for joined-up services that are needed to transform and improve care in future.”

A report released last week showed NHS trusts are making progress towards financial recovery. The NHS deficit is now £648m, some £968m better than at the same point last year, figures from NHS Improvement show.

A Department of Health spokesman said: “We know finances are challenging for some parts of the NHS, which is why we have a strong plan to get back on track.

“We are already seeing progress, with 40 fewer trusts in deficit compared to this time last year. We are also investing an extra £4bn in the NHS this year to transform services and improve standards of care, which will rise to an extra £10bn per year by 2020/21.”