Inspection and Regulation

18.01.19

Substantial deficits across NHS ‘do not paint a picture of sustainability’ and threaten long-term plan, warns spending watchdog

The NHS is not financially sustainable and substantial deficits at NHS bodies, year-on-year increases in waiting lists and waiting times, and staffing shortages are threatening the government’s £20bn long-term plan, the National Audit Office (NAO) has warned.

NHS trusts had a combined deficit of £991m in 2017-18 and CCGs reported an overspend of £213m, figures which the NAO said “do not paint a picture that is sustainable.”

Its annual report on financial sustainability raised concerns that “underlying financial health in some trusts is getting worse,” and whilst it acknowledged that the long-term plan set out a prudent approach to rectifying this, there remained a number of risks to the delivery of the plan.

The NHS Long-Term Plan, unveiled by Theresa May earlier this month, and its £20bn funding will see a 3.4% average real-term increase in funding from 2019 to 2024 – but the NAO pointed out that extra funding did not cover key areas of health spending, such as public health and education.

The report said that these could affect the NHS’s ability to deliver the priorities of the plan, and without long-term funding for social care too, the 10-year plan may prove inadequate and it “will be very difficult to make the NHS sustainable.”

Auditors found that the majority of the £991m combined trust deficit could be accounted for by just 10 trusts, and £3.2bn was given by the government to struggling trusts to help meet staff costs and pay suppliers – a £400m increase from 2016-17.

Whilst the NHS nearly achieved an overall financial balance in 2017-18, auditors concluded that it continues to offset surpluses and deficits which hides local disparities, and the provider sector self-reported a deficit of £1.85bn.

The NAO pointed towards patient waiting times continuing to slip, a steady decline in key performance areas, and existence of substantial deficits in some part of the system for its continued fragility.

However, Amyas Morse, head of the NAO, said that the long-term plan and its funding was a “positive and welcome development” and would make the NHS the envy of other departments.

“This should enable a more strategic approach to spending and we can expect to see a less turbulent financial context than in the last few years, if the funding is spent wisely.”

Image credit - PeoplesImages

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