10.07.14
Nuffield Trust: NHS facing financial tipping point
The NHS could be facing a ‘financial tipping’ point in the next year ahead of the 2015 general election, the Nuffield Trust has stated.
The think tank’s latest study – ‘Into the red? The state of the NHS’ finances: An analysis of NHS expenditure between 2010 and 2014’ – found that until last year the NHS was coping well despite the “unprecedented squeeze” on funding due to increasing demand on the health service and the consequences of public sector austerity since 2010.
However, new figures highlight that the NHS and foundation trusts as a whole were at least £100m in the red in the last financial year – with 66 trusts in deficit in 2013/14. This compares to a surplus of £383m in 2012/13 and 45 trusts in deficit in that year.
The government says these figures are pessimistic and paint an unrealistic picture.
The Nuffield Trust researchers also found that commissioners were struggling to balance their budgets in 2013/14, compared to previous years. Despite an overall underspend, 19 CCGs ended the last financial year in deficit and NHS England projected a £377m overspend on specialised services.
The report also highlighted that spending on agency staff has soared across the NHS. For example, in 2012/13 the cost of temporary staff grew by 20%, but this trend continued into 2013/14 with Foundation Trust spending on contract and agency staff increasing by £300m (27%).
Also, a survey of 100 health and social care leaders, the first of four to be published by the Nuffield Trust in the run-up to the election, found that almost half thought it was either “very” or “quite unlikely” that the NHS would remain free at the point of use in ten years’ time.
Andy McKeon, senior policy fellow at the Nuffield Trust and report co-author, said: “The NHS has risen to the challenge of living within its means over the past three years. But it has now reached a tipping point. Our analysis shows just how poorly placed it is to cope with the squeeze still to come.
“Demand for NHS services shows no signs of abating. With hospital finances increasingly weak, growing pressures on staffing, and the goal of moving care out of hospitals and into the community proving elusive, the NHS is heading for a funding crisis this year or next.
The Nuffield Trust analysis concludes that reforms to NHS services by adopting new technologies and promoting out-of-hospital care could help put it on a more sustainable financial footing in the future, but expecting this to happen in the next few years and without additional funding is unrealistic.
Rob Webster, chief executive of the NHS Confederation which represents NHS trusts, said: “Staff have worked incredibly hard over the last four years to deliver unprecedented savings while public finances have been constrained, but the challenge is getting much more difficult.”
Health minister Lord Howe has said that “these predictions are pessimistic and paint an unrealistic picture of how our NHS is working”.
He acknowledged unprecedented demands were being placed on some parts of the NHS, but pointed out that the budget had been protected during this Parliament.
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