15.04.14
NHS facing financial deficit in 2015-16 as providers struggle
The NHS is facing a “looming” financial deficit in 2015-16 as it is expected that a number of clinical commissioning groups (CCGs) and trusts will overspend their budgets, the latest quarterly monitoring report by The King’s Fund has revealed.
The study highlighted that one in eight trusts and CCGs will overspend their budgets for the financial year just ended – based on a survey of NHS finance directors.
Only two-fifths of finance directors in hospitals are confident their organisation will achieve financial balance in 2014-15, and this figure significantly drops to just 16% in 2015-16.
Richard Murray, director of policy at The King's Fund, said: “The NHS has coped well during the winter and avoided the A&E crisis that was so widely predicted.
“However, as the implications for hospitals of implementing the Better Care Fund sink in, there is a growing recognition that the NHS will face a financial crisis in 2015-16, if not before.”
Although the report’s findings are an improvement on the figures from the previous quarter, it reinforces concerns that the NHS provider sector will end the year in deficit for the first time since 2006/7.
A Department of Health spokesperson told NHE: “We recognise the scale of the financial challenge that trusts are facing and are taking action to address deficits, including putting recovery plans in place.
“We are clear that NHS trusts must meet their statutory duty to balance the books, and we remain confident that the NHS will have a balanced budget at the end of this financial year.”
But the King’s Fund said NHS finance directors are concerned about the implementation of the £3.8bn Better Care Fund, which will see an additional £1.9bn transferred from the NHS to support joint working between health and social care from April 2015.
NHS England has estimated that hospitals will need to reduce emergency admissions by 15% – a prospect rated as “very unlikely” by nearly 70% of hospital finance directors.
Dr Peter Carter, chief executive and general secretary of the Royal College of Nursing, said: “The NHS is currently managing to deliver for patients only by overstretching its staff and pushing the limits of its budget. This is not sustainable and the NHS must listen to the concerns of its clinical staff as well as its finance directors.”
He added that patients must not pay for the NHS’s financial crisis. He believes that funds should be spent intelligently, by delivering care close to home and keeping patients with long-term conditions well and out of hospital.
The King’s Fund did note that despite growing financial pressures, the NHS continues to hold up well against key performance indicators. For example, the proportion of patients waiting longer than four hours in A&E stayed within the government's 5% target range over the quarter, although this continues to mask significant local variation – more than 60% of hospitals with major A&E units missed the target over the quarter.
Liz Kendall MP, shadow minister for care and older people, said the King’s Fund’s warning of a looming ‘financial crunch’ confirms Labour’s fears that the NHS’s finances have deteriorated badly on the coalition government’s watch.
“NHS trust deficits are growing and there are now twice as many foundation trusts in the red compared to this time last year,” she said.
Richard Murray concluded that it is now certain that the next government will need to find more funding for the NHS or accept significant cuts to services.
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