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09.03.16

Provider deficit unlikely to be eliminated by end of 2016-17

NHS Providers have told the Commons Health Select Committee that it is ‘unlikely’ trust deficits will be eliminated by the end of 2016-17, and could still total around £500m.

During an evidence session yesterday, Chris Hopson, CEO of NHS Providers, said that it will take longer than a year eliminate the deficit in the provider sector, and that all parts of the health system must play their part.

Last month, Monitor’s financial figures for the latest quarter revealed that the NHS made £741m efficiency savings in April to December 2015, but still had a £2.3bn deficit. They also show that 179 out of 240 NHS providers are reporting a deficit, of whom 132 are acute trusts.

Hopson noted that the net deficit for the provider sector over the first three quarters of this financial year was £2.26bn and could increase to £2.8bn by the end of March. He added that additional funding will help to restore balance, but “our current estimate is that providers will end 2016-17 with a deficit of around £500 million”.

“While the NHS received a good settlement compared to other parts of the public sector in the Spending Review, it is in the middle of the longest and deepest financial squeeze in its history,” said Hopson.

“The ‘front-loaded’ investment over the next two years will help to ease the pressure, but there must be concern over the back-end of this parliament when the funding increases will be much lower.”

He added that over the course of this Parliament, as demand on services and the costs of delivering care outstrip revenue, the financial pressures before providers is “much tougher than before”.

“Providers are being asked to deliver a level of transformational change within a timescale that no other country has delivered,” said Hopson. “All of this means it is vital that providers receive greater support at a national level if they are to realise further savings. Many of these challenges require a ‘whole-system’ response and cannot be resolved by providers alone.”

However, only last month, NHS Improvement stated that NHS providers need to do more work “at pace and scale” to tackle their growing deficits and performance target failures.

Last week it was revealed that a number of NHS providers failed to submit financial activity plans to Monitor in “enough detail” and were asked to resubmit them.

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