MPs warn over ‘fragility’ of NHS finances

The Public Accounts Committee said cash available for upfront investment to develop care in the community is being eroded as increasing numbers of NHS bodies fall into deficit.

They say NHS savings will be difficult to achieve by continuing in the same way and criticise payments to hospitals which do not cover the costs of increasing numbers of emergencies.

They call on the Department of Health to slash bills for temporary staff, which soared by more than 20 per cent in 12 months to £2.6 billion in 2013-14, to cut costs of private finance initiative deals and accelerate the disposal of surplus property.

Latest figures reveal six out of 15 hospital trusts serving Yorkshire will run up combined deficits of more than £100 million the year to March, with others only breaking even by using reserves or receiving windfall payments.

Ministers have announced an extra £2bn for the NHS in England in 2015-16 but frontline services in Yorkshire will see only a fraction of the extra cash.

The extent of the crisis last week trigged the unprecedented refusal by major hospitals in England to sign off their annual budget deal for 2015-16 amid warnings they can “no longer guarantee safe and effective care” without extra cash.

Committee chairman Margaret Hodge said: “From all our work across all of government, the fragility of the NHS finances causes me greatest concern.

“It is clear that the old ways will no longer work - radical change is required to make the NHS financially sustainable.”

She said existing incentives to reduce A&E attendance and make better use of community and GP services had not had the impact expected. “Making this change will require significant upfront investment but the money available for this is reducing as the number of organisations in deficit increases,” she added.

Shadow health secretary Andy Burnham said the report “laid bare” the extent of the Government’s NHS mismanagement.

“Many trusts are in trouble on all fronts and trapped in a downward spiral, without enough staff and lacking the funds they need to stop the slide,” he said.

“This is a mess of the Government’s making and spells disaster for the NHS unless there is an urgent change of course.”

Former Yorkshire health boss Rob Webster, chief executive of the NHS Confederation, called on the main political parties to make clear how services can be funded sufficiently to support radical changes to make the NHS sustainable. “The alternative is that the NHS will reach a point at which finances could collapse quickly,” he said.

The Department of Health said: “We know the NHS is busier than ever which is why we’ve increased the budget by billions and are backing the NHS long-term plan to move care from hospital to home. Every NHS organisation knows that financial discipline must be as important as safe care and good performance.”