NHS Trusts Heading for £500 Million Deficit

The body responsible for representing NHS trusts has warned that the organisations will accumulate a collective deficit in excess of £500 million over the next 12 months.

It was hoped that NHS trusts would return to financial parity in the 2017/18 financial year.

But NHS Providers suggests that in the existing financial climate this target will be unachievable.

Chris Hopson, the chief executive of NHS Providers, outlined the current struggle that critical NHS organisations are experiencing in attempting to balance the books.

“We understand that after recent discussions, providers are heading for at least a £500m to £600m deficit in 2017-18. There is also now growing financial pressure on the commissioning side and serious doubt on whether they can remain in surplus and cover the provider deficit from a non-recurrent reserve to the same extent that they did this year.”

Pressure on commissioning budgets in the NHS is thought to be similar by NHS Providers to the provider side, which suggests an approximate £1 billion gap in finances for the coming financial period.

In this challenging climate, over 25% of trusts have already rejected financial targets for next year, deeming them to be unrealistic.

Efficiency savings of approximately 6.5% will be required for these trusts in order for them to achieve their fiscal aims.

Hopson believes that the government could help the situation by agreeing financial targets for the forthcoming year as quickly as possible.

“First, we need to finalise the 2017-18 financial targets. Given the new financial year starts tomorrow we need to rapidly work out how to fill this £1bn gap and what the overall provider sector financial target should be. We believe trusts will be doing well to reproduce this year’s likely performance of an £800m to £900m deficit.”

The chief executive of NHS Providers also suggests that working out a feasible plan for the 2018/19 financial year will also be important in ensuring that NHS services are adequately delivered.

“Second, we need to work out what can actually be delivered in 2018-19 given that NHS frontline funding increases drop even further from 3.6 per cent in 2016-17 to 1.3 per cent in 2017-18 and then 0.4 per cent in 2018-19. This means that NHS real terms spending per person adjusting for age will actually decrease in 2018-19 – a very rare occurrence.”

Meanwhile, Jim Mackey, chief executive of NHS Improvement, asserted that diligent work from the organisational structure of the NHS trust had averted disaster.

But Mackey also believes that there is a lot of work ahead for the healthcare system in order to deliver the NHS future desired by both patients and healthcare professionals.

“Providers and commissioners have worked really hard in recent months to pull together plans for the future of local NHS services. This has helped us understand the challenges the NHS faces, and the opportunities for improvement and sharing best practice. But there is still a long way to go to ensure that plans for next year are deliverable and to address the ongoing risks in finance, capital and workforce.”

NHS trusts accumulated a deficit of around £2.5 billion last year, with this figure expected to be over £850 million for the current fiscal period.


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