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Record £2.45bn deficit for NHS in England

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NHS providers in England reported a record overspend of £2.45bn for the year ended 2015-16.

The deficit marks the second consecutive year it has fallen into the red and the figures published by NHS Improvement reveal that the shortfall of £461m is three times bigger than the previous year’s.

Paul Briddock, director of policy at the Healthcare Financial Management Association (HFMA), the body which represents NHS finance directors, said: “The Public Accounts Committee Report into NHS finances echoes what HFMA has been saying for a long time. After reviewing the evidence of the current disappointing position of NHS finances, the consensus is that a recovery plan needs to happen faster than its current rate.

“Back in November, our director of finance members asked government for a Plan B and as a result welcomed additional funding and initiatives to attempt to make further efficiency savings. However, we now fully welcome the bold recommendations made in today’s report.

“We know that 75% of all providers, and 95% of Acute Trusts are in deficit – an incredibly worrying and non-sustainable percentage that gives the sector a mountain to climb to bring the NHS into financial balance again. Financial injections from government buys welcome breathing space, but not solutions. This systemic problem needs to be tackled through genuine collaboration, against a sensible timeframe and with realistic targets.”

Briddock said his organisation “supports the call for better quality data collection” as it will inform more pragmatic target setting that can be used as an ambition to target, “rather than a stick to beat with”.

The body backs calls to solve the major workforce planning issues that lead to the “unsustainable” need for expensive agency staff.

Despite the gloomy finances, NHS Improvement said health service providers in England had actually made £2.9bn in efficiency savings between April 2015 and December 2016.

But NHS providers are under continued pressure from further increases in demand for care, issues with discharging medically fit patients, and high agency staff costs.

It points to analysis that shows many providers are using the recently introduced financial control measures developed by the sector and NHS Improvement.

This includes a £300m fall in spending on agency staff since October 2015, and an £86m reduction in the sector’s overall spending on management consultants compared to a year ago.

NHS Improvement has just launched its Financial Improvement Programme which it says will enable providers to “get help from external experts and share examples of good practice across the NHS”.

Jim Mackey, chief executive of NHS Improvement, said: “Providers have made every effort to meet rising demand for services at a time when the sector is also being asked to be more efficient than ever. When we consider where we were six months ago, NHS providers have done a great job in reducing the planed deficit.”

In November 2015, the Healthcare Financial Management Association (HFMA), said an urgent cash injection of £8bn is needed within the next 18 months if the NHS is to meet its commitments to the nation.

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