NHS finances in ‘perilous state’ warns Public Accounts Committee

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The NHS is stuck in “survival mode” after efforts to tackle a health service crisis were too focussed on short-term measures to balance the books.

That is according to an influential committee of MPs which has warned that the NHS finances are in a “perilous state”, with budgets unable to keep pace with demand despite a £1.8bn rescue fund in 2016-17.

The Public Accounts Committee said the Department for Health and Social Care, NHS England and NHS Improvement were failing to create a long-term plan to improve patient services.

Meg Hillier, who chairs the committee, called for “fresh thinking” to address a budget crisis. She said: “The NHS continues to scrape by on emergency handouts and funds that were intended for essential investment.”

The MPs said that despite earlier warnings, the Department had not assessed the impact on patients of the capital budget being repeatedly raided to cover NHS running costs.

Ms Hillier said: “Government’s last-minute response to what were entirely predictable winter pressures is just the latest vivid demonstration of why fresh thinking is so desperately needed.”

Ms Hillier said the committee had “repeatedly called” for a long-term plan for the NHS and said the Department for Health and Social Care must explain how it will approach the issue by July.

She said: “Key to this will be securing a funding settlement from the Treasury that properly reflects current and anticipated demand for NHS services.”

The committee warned that the NHS has a “long way to go before it is financially sustainable”, with trusts forecasting a deficit of more than £900m in 2017-2018.

It said: “The NHS is still very much in survival mode, with budgets unable to keep pace with demand.”

While the Treasury announced £337m in additional funding in November, it came too late for trusts to effectively plan how it would be spent, the MPs said.

The MPs welcomed the decision to lift the one per cent pay cap for NHS staff, but added: “We will be watching to see whether this will lead to better retention of staff. We also need to be clear that this is not robbing Peter to pay Paul.”

The Department of Health and Social Care said it was “fully committed” to helping the NHS to modernise patient services for the future

A spokesman said:“As this report recognises, the NHS has made significant progress towards balancing the books and returning to a financially stable position.

“The Health and Social Care Secretary has acknowledged that funding for the NHS needs to be addressed with longer-term measures, rather than short-term, which the Department supported in the Autumn Budget, giving priority to the NHS with an extra £2.8bn, on top of a planned £10bn a year increase in its budget by 2020-21.”

The report comes after almost 100 MPs called on Theresa May to establish a cross-party commission to address the crisis in NHS and social care.

The move was an attempt to break the “political deadlock” that has blocked repeated attempts to decide how to organise and fund services to cope with Britain’s ageing population.