NHS funding black hole ‘is growing larger’

Hospitals are gearing up for a busy night.

There has been a significant deterioration in the financial positions of NHS trusts and foundation trusts since 2014-15, when their deficits stood at £843 million, the National Audit Office (NAO) says.

The NAO raised particular concern about acute trusts responsible for major hospitals, which ran a net deficit of £958 million in 2014-15.

The Government has committed to pump an extra £8.4 billion a year into the NHS by 2020, which could be a “significant step towards financial sustainability”, but the NAO warned it was not yet clear that there was a coherent plan to get trusts’ finances back on track.

NAO chief Amyas Morse warned that the position was unsustainable, with too many trusts relying on running a deficit.

He said: “Running a deficit seems to be becoming normal practice for acute trusts. There is a risk that poor financial performance is seen as the least worst option compared with poor healthcare provision.

“The Department, NHS England, Monitor and the NHS Trust Development Authority must take a rounded view of how to improve trusts’ finances.

“The Government’s commitment to give the NHS more funding, with almost half of this coming upfront, could be a significant step towards financial sustainability, if this funding can be devoted to improving the financial position of trusts rather than dealing with new costs.

“Continued demand for healthcare services means that the pressure on acute trusts will not go away.

“Until there is a clear pathway for trusts to get back to financial stability, we cannot be confident that value for money will be achieved.”

Commons Public Accounts Committee chairwoman Meg Hillier said the financial position of acute trusts was “simply unacceptable”.

A number of Yorkshire hospital trusts have hit the headlines after revealing growing deficits in recent months.

Leeds Teaching Hospitals NHS Trust chiefs held an “extraordinary financial stretch meeting” after being asked to save an extra £5.5m from a planned £40.2m deficit earlier this year, while Hull and East Yorkshire Hospitals NHS Trust was tasked with cutting an extra £5.9m from its £21.9m deficit.

It recently emerged that Doncaster and Bassetlaw’s trust was being investigated after it emerged it has racked up a £12.6 million deficit - despite forecasting a profit.

And this month it was reported that Mid Yorkshire’s deficit was expected to worsen from £14.8 million to a predicted £21.3 million.

In a bleak assessment, the NAO said financial problems in the health service were “endemic”.

The £2.2 billion deficit forecast for this year follows shortfalls of £843 million in 2014-15 and £91 million in 2013-14. The number of trusts reporting a deficit rose by 80 per cent between 2013-14 and 2014-15, from 64 to 115, out of a total of 240.