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England NHS trusts rack up near £1bn deficit in three months

Published 09/10/2015

NHS trusts have racked up a huge deficit
NHS trusts have racked up a huge deficit
NHS trusts have racked up a huge deficit

NHS trusts in England have racked up a deficit approaching £1 billion in the first three months of the financial year - the "worst" financial position in a generation.

The figure is more than the £820 million overspend for the entire previous year.

It has been suggested that the deficit among the trusts could top £2 billion for the whole of the current financial year.

The regulator Monitor warned that the NHS is "under massive pressure" and can no longer afford to go on as it is.

It said trusts had to work to counter an increased demand for care and a "worst in a generation financial position".

The figures for April to June showed NHS Foundation Trusts had a deficit of £445 million (£90 million worse than planned), while o ther NHS trusts were £485 million in deficit.

The figures from Monitor cover 151 NHS foundation trusts, while a separate study from the Trust Development Authority (TDA) covers 90 NHS trusts.

Some 118 foundation trusts (78%) ended the period in debt as did 72 trusts covered by the TDA.

Monitor said hospitals must make "radical and lasting" changes to how care is delivered.

Dr David Bennett, chief executive at Monitor, said: "Trusts are working hard to provide patients with quality care.

"However, today's figures reiterate that the sector is under massive pressure and must change to counter it.

"The NHS simply can no longer afford operationally and financially to operate in the way it has been and must act now to deliver the substantial efficiency gains required to ensure patients get the services they need."

Foundation trusts missed key waiting times targets, including the A&E target for people to be seen within four hours. Targets for routine operations and some cancer treatments were also missed.

A lack of beds meant 29,000 people waited on a trolley for more than four hours between the decision to admit them to A&E and their arrival on a ward.

This was over a third (35%) higher than the same period last year.

Across England, the waiting list for routine operations reached 1.9 million people - a 169,100 increase (9%) on the same period in 2014/15.

Some 10,800 patients also waited longer than the recommended six weeks for diagnostics tests.

Monitor said trusts had "struggled to deal with an increase in demand for diagnostic tests, partly due to staff shortages and ineffectively organised services".

The main cause of overspend among foundation trusts was higher than expected costs for staff pay, with an "over-reliance" on expensive agency staff, Monitor said.

It said the report covered the period before new rules were brought in to cap the spend on agency staff.

Health Secretary Jeremy Hunt has announced a clampdown on using agencies, which cost the NHS more than £3 billion.

The NHS has been paying agencies up to £3,500 per shift for doctors, and the total bill for management consultants was more than £600 million last year.

A spokesman for the Department of Health said: "We know finances are challenging for parts of the NHS, but we've committed to investing £10 billion to fund the NHS's own plan for the future.

"The NHS must play its part in delivering efficiencies - so we're taking action to help hospitals clamp down on rip-off staffing agencies and cut spending on management consultants. We expect the impact of these measures to be reflected in figures released later in the year."

Unite union national officer Barrie Brown said: "This is what happens when you have growing demand for NHS services and then decide to impose £20 billion of so-called 'efficiency savings'.

"Health Secretary Jeremy Hunt needs to start banging the Cabinet table to get more funds in real terms from the Chancellor, George Osborne, otherwise the NHS will go into a financial meltdown."

Shadow health secretary Heidi Alexander said there had been a delay in releasing the figures.

"It is now clear why these figures weren't released ahead of Tory party conference - they show an NHS in crisis," she said.

"The alarming deterioration in NHS finances is a direct result of actions this Government has taken.

"Cuts to nurse training places has left the NHS with a shortage of nurses, forcing hospitals to hire expensive agency staff. As Monitor acknowledges, this is the primary cause of the deficit."

Speaking to the BBC's World At One, Chris Hopson, chief executive of NHS Providers which represents 90% of foundation hospitals in England, blamed the situation on a "triple whammy".

He cited rapidly rising patient demand, the impact of employing more NHS staff and "the deepest and the longest funding squeeze" in NHS history.

He also issued a stark warning to the Government.

"You cannot run a health system with a £2 billion - which is what we are forecasting for the whole of the year - you cannot run a health system with a £2 billion deficit every year," he said.

Meanwhile, Nigel Edwards, the chief executive of the Nuffield Trust think-tank, told the World at One that the current situation is "unprecedented".

He said: "Correcting the type of deficit that we are talking about here ... is a major undertaking and it seems unlikely to me that it is going to get closed in the period that's available because the types of radical changes that people are talking about to try and get this back tend to take longer than we have got."

Sean O'Sullivan, head of policy at the Royal College of Midwives, said: "Excessive reliance on agency staff and a failure to employ the right numbers of staff needed are one of the issues at the heart of this problem."

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