Fears over patient care as trusts run largest deficit in NHS history

Data shows NHS trusts ended the last financial year a record £2.45bn in deficit, lower than the £2.8bn which had been predicted, but almost three times bigger than the previous year.

Overall, 65 per cent of the 240 trusts are in deficit with nearly all hospitals ending the year in the red. The data comes as the NHS struggles to hit key targets, with performance against the four hour A&E waiting times target at its lowest ever level and the highest ever number of patients being delayed leaving hospital due to inadequate community and social care.

Some have argued the massive black hole actually represents huge Government underinvestment in the NHS as the health service deals with more patients than ever and increasingly complex cases as people live longer.

The UK spends a smaller proportion of its GDP on health care than countries such as Portugal, France and the Netherlands.

Earlier on Friday, there were claims that the deficit was only kept below the £2.8bn prediction through financial “alchemy”.

The Nuffield Trust said trusts had been pressurised to make “accountancy adjustments”, including reclassifying capital budgets as revenue, claiming for five quarters’ (15 months’) worth of VAT rebates and reviewing accounting policies.

An unnamed NHS trust finance director accused the Department of Health of financial “alchemy” as it sought to keep within spending limits set by the Treasury.

But a Department of Health spokesman said: “We are committed to the NHS and are investing £10bn in its own plan for the future, and it is vital that money is accounted for consistently.

“The transfer from capital to revenue makes no difference to the overall departmental picture given Parliament has voted to approve it – to say otherwise is misleading.

“Our financial statements will be audited by the independent National Audit Office.

“We recognise parts of the NHS are under pressure as demand rises due to our ageing population, but we are providing intensive support to improve performance, boost efficiency and reduce the use of expensive agency staff.”

Nuffield Trust senior policy analyst, Sally Gainsbury, said: “The size of NHS trust overspends shown in these figures is the highest ever under the current system, and hundreds of millions more than planned. The real, underlying figure is even more dramatic – over £3.2bn.

“These figures are being flattered by £670m worth of accountancy measures that improve the surface picture, but without changing the reality of costs. Investment spending has been pushed down by more than a quarter compared to initial plans. This shortfall is much more than can be accounted for by often discussed issues with agency staffing – extra spending linked to this accounts for only £760m.

“These gaps result from several years during which the amount paid for treatments has been cut faster than trusts can cut their costs.”

NHS Providers chief executive Chris Hopson said: “Today’s report reveals how the combination of increasing demand and the longest and deepest financial squeeze in NHS history is maxing out the health service.”