Local NHS deficits ‘getting worse’

Margaret Hodge, chair of the Public Accounts Committee
Margaret Hodge, chair of the Public Accounts Committee
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The growing financial stress on the NHS is “not sustainable”, with the Government forced to plough more than half a billion pounds of emergency cash into struggling health trusts last year, auditors have warned.

A quarter of NHS and foundation trusts were in deficit by the end of the financial year, with the number in the red rising from 25 to 63 over 12 months, a report by the National Audit Office (NAO) found.

Some £511 million was spent bailing out 31 trusts in England in 2013/14 - nearly double the £263 million spent in the previous year - including 16 trusts that had not previously needed a cash injection.

The gross deficit of health trusts rose by 150 per cent from £297 million in 2012/13 to £743 million in 2013/14, the NAO said.

Margaret Hodge, chairwoman of the Public Accounts Committee, said the “deeply alarming report” showed the future sustainability of the NHS was at risk.

Amyas Morse, head of the NAO, said: “An increasing number of healthcare providers and commissioners are in financial difficulty. The growth trend for numbers of NHS trusts and foundation trusts in deficit is not sustainable.

“Until the Department of Health (DoH) can explain how it will work with bodies such as NHS England, Monitor and the NHS Trust Development Authority to address underlying financial pressures, quickly and without resorting to cash support, we cannot be confident that value for money will be achieved over the next five years.”

The DoH has now issued £1.8 billion in cash injections to 46 NHS bodies since 2006/07, while just £160 million has been repaid, the NAO said.

Among the struggling trusts to be bailed out in 2013/14, North Cumbria University Hospitals received the highest total of £42 million, followed by Peterborough and Stamford Hospitals with £40.7 million and University Hospital of North Staffordshire with £37 million.

Forty-four health trusts moved from surplus in 2012/13 to deficit in 2013/14, according to the report.

Overall, NHS bodies achieved a net surplus of £722 million in 2013/14 - a third of the £2.1 billion recorded in the previous 12 months, the report found.

NHS and foundation trusts recorded a £91 million deficit in the last financial year, the NAO said.

A total of 82 NHS organisations were in the red by the end of 2013/14, while the number of NHS and foundation trusts with a surplus fell from 222 in 2012/13 to 182. By the end of June 2014, health trusts were forecasting a net deficit by the end of the current financial year of £424 million, the NAO said.

The Government spending watchdog added that a rising proportion of foundation trusts could not meet the standards met by healthcare regulator Monitor, with 18 per cent in breach of their licence.

Ms Hodge said: “This is a deeply alarming report. I do not believe it is an exaggeration to say that the future sustainability of our National Health Service is at risk. Things are getting worse rather than better and we all know that when trusts are under this kind of financial stress it is the quality and safety of patient care that can suffer.

The DoH said the NHS budget had increased by £12.7 billion since 2010 and the majority of health providers are still in financial balance or better.

A spokesman said: “Financial discipline must be as important as safe care and good performance. Many NHS organisations are already achieving this and all understand the need for greater efficiency.”

He said government reforms had put powers in the hands of “local doctors and nurses”.