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NHS trust deficits 'unsustainable'

The growing financial stress on the NHS is "not sustainable", with the Government forced to plough more than half a billion pounds of emergency cash into struggling health trusts last year, auditors have warned.

A quarter of NHS and foundation trusts were in deficit by the end of the financial year, with the number in the red rising from 25 to 63 over 12 months, a report by the National Audit Office (NAO) found.

Some £511 million was spent bailing out 31 trusts in England in 2013/14 - nearly double the £263 million spent in the previous year - including 16 trusts that had not previously needed a cash injection.

The gross deficit of health trusts rose by 150% from £297 million in 2012/13 to £743 million in 2013/14, the NAO said.

Margaret Hodge, chairwoman of the Public Accounts Committee, said the "deeply alarming report" showed the future sustainability of the NHS was at risk.

Amyas Morse, head of the NAO, said: "An increasing number of healthcare providers and commissioners are in financial difficulty. The growth trend for numbers of NHS trusts and foundation trusts in deficit is not sustainable.

"Until the Department of Health (DoH) can explain how it will work with bodies such as NHS England, Monitor and the NHS Trust Development Authority to address underlying financial pressures, quickly and without resorting to cash support, we cannot be confident that value for money will be achieved over the next five years."

The DoH has now issued £1.8 billion in cash injections to 46 NHS bodies since 2006/07, while just £160 million has been repaid, the NAO said.

Among the struggling trusts to be bailed out in 2013/14, North Cumbria University Hospitals received the highest total of £42 million, followed by Peterborough and Stamford Hospitals with £40.7 million and University Hospital of North Staffordshire with £37 million.

Forty-four health trusts moved from surplus in 2012/13 to deficit in 2013/14, according to the report.

Overall, NHS bodies achieved a net surplus of £722 million in 2013/14 - a third of the £2.1 billion recorded in the previous 12 months, the report found.

NHS and foundation trusts recorded a £91 million deficit in the last financial year, the NAO said.

A total of 82 NHS organisations were in the red by the end of 2013/14, while the number of NHS and foundation trusts with a surplus fell from 222 in 2012/13 to 182.

By the end of June 2014, health trusts were forecasting a net deficit by the end of the current financial year of £424 million, the NAO said.

The Government spending watchdog added that a rising proportion of foundation trusts could not meet the standards met by healthcare regulator Monitor, with 18% in breach of their licence.

Ms Hodge said: "This is a deeply alarming report. I do not believe it is an exaggeration to say that the future sustainability of our National Health Service is at risk.

"The gross deficit of NHS and foundation trusts is up by an extraordinary 150%.

"Some trusts are only getting by on handouts.

"Things are getting worse rather than better and we all know that when trusts are under this kind of financial stress it is the quality and safety of patient care that can suffer.

"The department, NHS England, Monitor and the NHS Trust Development Authority between them must explain to my committee how they are going to get a grip on this wholly unsustainable situation and get our NHS back on track."

The DoH allocated £95.2 billion to NHS England in 2013-14 to pay for NHS services, the NAO said.

NHS England chief executive Simon Stevens said: "Week in, week out NHS staff go the extra mile to ensure their patients get excellent care. But an ageing population, a growing population and the possibilities of new treatments all mean that pressures are real and we need to get going on the new path set out in the NHS five-year forward view."

The DoH said the NHS budget had increased by £12.7 billion since 2010 and the majority of health providers are still in financial balance or better.

A spokesman said: "Financial discipline must be as important as safe care and good performance. Many NHS organisations are already achieving this and all understand the need for greater efficiency.

"Our reforms put power in the hands of local doctors and nurses to make decisions and control their own budgets to make sure patients receive the best services."

Shadow health secretary Andy Burnham said: "This report delivers a devastating verdict on the NHS reorganisation David Cameron said would not happen. It has brought the NHS to the brink of bankruptcy by wasting £3 billion.

"Across England, the NHS is running out of money and patient care is heading backwards. It is clear ministers have lost control of NHS finances, with a massive deterioration in the last year.

"The NHS is heading for the rocks. It proves David Cameron cannot be trusted with it. He must produce an urgent plan to show how he'll turn the NHS around.

"Labour will rescue the NHS with our £2.5 billion Time to Care package which will fund new staff including 20,000 more nurses - investment the Tories will not match."

Katherine Murphy, chief executive of the Patients Association, said "serious questions" need to be asked about how the "financial crisis" was allowed to develop.

She said: "We have had a significant amount of money pumped into the NHS in the past, but patients are still receiving substandard care. We receive many calls to our Helpline about delays in treatment, incorrect diagnosis and undignified care.

"We have known for many years that underfunding and financial stress has a direct impact on the quality of care that patients receive and has a direct effect on patient safety.

"There is clearly an urgent need for addressing these financial issues and there is a need for targeted programmes which will improve the funding situation and enable better care for patients.

"We cannot use lack of funding as an excuse for poor patient care and every effort must be made to ensure that the NHS provides safe high quality care and maintains dignity for its patients at all times."

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