The government is facing calls for an overhaul of health service funding as NHS trusts struggle to overturn multi-million-pound deficits.
Hospitals face an uphill struggle to meet strict budget targets by the end of the financial year, with many losing out on millions of pounds in funding linked to performance targets.
NHS trusts in Yorkshire and the Humber are currently about £150m in the red, according to the latest information available, and fears have been raised that the deficit could rise higher by the end of March. Trusts around the country look set to miss financial “control totals” which are agreed with the financial regulator NHS Improvement.
NHS Providers, which represents NHS trusts, said a decision to encourage the cancellation of non-urgent operations would hit finances because hospitals are paid per procedure. An estimated 55,000 operations scheduled before the end of January were postponed.
Phillippa Hentsch, the head of analysis at NHS Providers, said: “Trusts will continue to pull out all the stops to meet their financial targets at the end of the year.
“NHS Providers has written to the financial regulator warning that winter pressures, including the decision to postpone routine operations in January to allow NHS trusts to focus on meeting greater emergency demand, will have had a knock-on impact on provider sector finances.
“Costs of additional temporary staff and opening up extra beds to meet the extra demand will also put additional strain on trust finances. Looking ahead, we must be realistic about the financial ask of the provider sector given the tight financial settlement the NHS has been given.”
NHS Providers has also criticised the Sustainability and Transformation Fund (STF), a pot of money made available to NHS trusts if they meet A&E and financial targets. It is feared the STF system penalises trusts by withholding money if they are behind with budget savings.
A spokeswoman for NHS Improvement said: “The Sustainability and Transformation Fund is allocated to support and incentivise the sustainable provision of efficient, effective and economic care by NHS trusts and foundation trusts. For trusts to be eligible to receive their STF they must sign up to their control total and associated conditions.
“Cash payments are made to trusts on a quarterly basis if they meet their control total and, if applicable, the A&E requirements.”
NHS trusts in England expected to be £623m in deficit – £127m worse than planned – by the end of the year when their last quarterly performance report was published. The latest estimate of the 2017-18 full-year deficit is expected to be published on Monday.