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Temperature rising as almost all FDs lack capital to achieve STP targets

For the fourth year in a row, NHS trusts and foundation trusts have reported a lack of confidence that fiscal targets would be met this year, although STP relationships have been strengthened over the last six months.

In the seventh NHS financial temperature check – which provides a national picture of the views of health service financial directors drawn up by the Healthcare Financial Management Association (HFMA) – another warning was issued about the difficulty of the NHS’s monetary situation.

Responses from finance directors and chief finance officers (CFOs) of 100 provider trusts and 73 CCGs from across the NHS were collated by the HFMA.

There were some positives to be found in the results, including the fact that half of directors felt that STP relationships were strong enough to deliver cross-organisational change, up from 20% from the last temperature check in December 2016.

But in CCGs, 94% of finance directors said there was a medium or high risk of financial plans not being achieved for next year, whilst the figure was even higher, at 95% for trust directors.

Capital was also found to be a major issue, as only 1% of trust finance directors and 3% of CCG CFOs said that they had sufficient capital to effect plans in their STP footprint.

NHS financial leads also echoed scepticism voiced by councillors around STPs today, as 89% of trust directors and 77% of CCG CFOs said they were not confident that STPs would be able to close the financial gap by 2021.

Researchers also found that the combined CCG surplus would only be achieved through the release of their 1% risk reserve.

“The results of our survey depict a difficult financial year ahead for trusts and CCGs alike, with finance directors commenting that 2017-18 will be the most difficult year yet,” the report stated.

“Finance directors do see potential ways of tackling the challenges ahead: more joined-up working and integration through STPs; implementation of the Carter review recommendations; wider roll-out of NHS England’s RightCare programme; and implementation of new care model,” HFMA researchers stated.

“But there is no single panacea, and indeed there is significant uncertainty that in aggregate these approaches will be able to achieve what they need to if they are to restore the system to financial balance.”

Mark Orchard, president of the HFMA, commented that the last few years had been the most financially challenging the NHS could remember as challenges looked set to continue.

“However, there are reasons to be positive,” he stated. “The level of efficiency savings delivered in 2016-17 by finance staff working in collaboration with their clinical and management colleagues should be applauded.

“In many ways, though, this is just the beginning. The efficiency challenge in 2017-18 is even tougher. Collectively, everyone in the NHS needs to find ways to be more resourceful, more innovative and more collaborative to address the financial challenge in front of us.”

Niall Dickson, chief executive of the NHS Confederation, said that the findings had to be a “wake up call” for the NHS.

“At one level, it appears that some NHS organisations are managing to balance the books, but this also shows that the health service is struggling to meet demand, never mind transforming services for the future,” he argued.

“Our members have repeatedly pointed out that they cannot sustain current levels of service with such a fragile funding settlement and that this is likely to get worse with NHS spending per head falling next year.”

Dickson also emphasised how many finance chiefs were pointing to the risks in current savings plans as he warned that “we cannot rely on good fortune to make budgets balance”.

“What is needed is clear ring-fenced funding for transformation in the Budget statement later this year, to accelerate change while keeping the lights on today,” he concluded.

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