GOVERNMENT underfunding of the NHS in England and Wales has created a £2.26bn deficit in the health service finances – some £622m worse than expected -a new report has found.
Some 75% of the 240 NHS providers, including 132 acute trusts – reported a deficit with the “provider” sector overspending by £2.72bn on expensive agency and contract staff – £1bn more than planned.
The record deficit has spiralled to more than three times the figure of 2014-15.
The report, issued jointly by NHS regulators Monitor and the Trust Development Authority cover over 60% of the NHS’s total £116bn budget.
Paul Briddock, director of policy, healthcare at the Financial Management Association (HFMA), said: “The writing’s on the wall – the deficit has already far exceeded what was originally forecast. It’s also disappointing to see many key performance targets are not hitting the mark including waiting times for A&E, referral to treatment and 62 day cancer waits.
“The Q3 results are the next chapter in the continued decline in the financial position of Providers that we have seen since 2013/14. This makes the Q3 2015/16 position nearly triple the deficit figure of this time last year, and based on optimistic levels of savings planned in the last quarter of the financial year, the overall forecast deficit for 2015/16 is now £2.37bn. With 75% of all providers, and 95% of Acute Trusts now in deficit, we have a systemic problem across the board and a difficult future for the NHS in its current form.”
In November, HFMA members made a case for a Plan B for NHS finances and questioned whether the promised £8bn of extra government funding would be sufficient to arrest the situation.
Briddock said the latest figures would “add even further pressure to a worrying financial future, and those trying to manage it.”
The alarming deficit has arisen despite NHS providers’ making £741m in operational and efficiency savings between April and December 2015, all delivered while treating over five million emergency patients between October to December 2015.
Despite this, NHS providers are under sustained pressure from an unprecedented demand for care, with chronic “issues with discharging medically fit patients, and high costs”. The perfect storm of cuts and increased demand means that many providers missed several national waiting times standards, such as the A&E performance measure, in the last three months of 2015.
Some £8.4bn was earmarked for the NHS in the government’s autumn’s spending review with a £3.8bn slice being made available next year.
The report says many providers have reduced by £31m the sector’s overall spending on management consultants.
Jim Mackey, chief executive designate of NHS Improvement, said: “Providers are making progress on improving their finances whilst also providing more treatment, to more patients with more complex care needs than ever before. However, further improvements will be required by the whole NHS at pace and scale to tackle the current financial and operational challenges it faces.”