Fears as NHS foundation trusts report highest ever deficits

Strong leadership and increased investment 'vital' to secure the future of NHS services, experts warn following shocking Monitor report

A Monitor report reveals how NHS foundation trusts are struggling with their finances

Strong leadership and increased investment by the new Government are vital to help secure the future of NHS services, experts are warning.

The comments come after figures from health regulator, Monitor, revealed that NHS foundation trusts reported a record deficit of more than £822m in 2014-15, compared to £115m the previous year. The numbers for this financial year are expected to be even worse.

The sector can no longer afford to operate on a business-as-usual basis and we all need to redouble our efforts to deliver substantial efficiency gains in order to ensure patients get the services they need

Part of the problem is the huge rise in agency nurse spending, but the revelation has led to warnings that the service is facing a bleak future unless more is done to balance the books.

Foundation trusts make up two thirds of all NHS acute organisations in England, but while they run many of the leading hospitals, ambulance and mental health trusts, their foundation trust status means they are not controlled by central government.

The Monitor report showed that of the 152 trusts, half are in deficit and 70% of those are acute hospital trusts. It also showed that £1.8billion was spent on contract and agency staff – more than double the amount budgeted for; and the size of the waiting list for routine operations was nearly 1.8 million, an increase of 8.3% on 2013/14.

Dr David Bennett, chief executive of Monitor, said: "The last financial year was exceptionally challenging for the foundation trust sector and it is clear the current one is following the same pattern.

We know the NHS is busier than ever and trusts are facing challenges; however we expect them to show tight financial grip and live within their means

"The sector can no longer afford to operate on a business-as-usual basis and we all need to redouble our efforts to deliver substantial efficiency gains in order to ensure patients get the services they need.

"This will no doubt involve some significant changes to the way people work at some institutions, but as the regulator we believe there is scope for more to be done at a number of levels without compromising patient care."

He said it was right that, in difficult circumstances, agency staff were being used to ensure patients always received quality care. However, he said trusts needed to act to ‘reduce their over-reliance’ on such staff.

In the run-up to the General Election, Chancellor, George Osborne, ploughed an extra £2billion into the health service. And recently Prime Minister, David Cameron, announced his commitment to investing a further £8billion by 2019/20.

A spokesperson for the Department of Health said: "We know the NHS is busier than ever and trusts are facing challenges; however we expect them to show tight financial grip and live within their means."

There is a real prospect of deficits snowballing and, unless the government finds extra money, an accelerating decline in NHS performance and a deterioration in patient care

Richard Murray, director of policy at The King's Fund think tank, described the financial problems as ‘disappointing’.

"Plugging the growing black hole in NHS finances must now be an urgent priority for the government,” he added.

"There is a real prospect of deficits snowballing and, unless the government finds extra money, an accelerating decline in NHS performance and a deterioration in patient care."

And Rob Webster, chief executive of the NHS Confederation, added: “This report provides a clear indication of the pressures faced by the NHS today.

“The financial issues within providers are well documented and these figures further highlight the impact from a foundation trust perspective. Sustainability in the NHS is a challenge that must be met by the whole system and we will need to see strong leadership over the next five years to meet it.

“We look forward to working with the Government as it develops its spending plans for health and care. A clear signal from the Government that it will increase funding each and every year of this Parliament will allow the NHS to focus on the tough efficiency savings required and achieve the vision set out in the Five Year Forward View.

Sustainability in the NHS is a challenge that must be met by the whole system and we will need to see strong leadership over the next five years to meet it

“The figures published today demonstrate that the NHS has a fragile settlement and that this will remain over the coming years. We will need to count on transformation funding delivered up-front and action to prevent social care from being cut in order to prevent NHS organisations from being knocked off course.

“We also need to change the way care is delivered in many parts of the NHS, with new models of care backed by strong support from national bodies and politicians over this full Parliament. This looks within our grasp if we align behind the Five Year Forward View, secure sufficient funding and back the NHS to deliver.”

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