A cross-party enquiry by MPs has warned that the NHS is in a state of financial crisis, and that the existing government has no clear plan in order to address this malaise.
Hospital trusts are running up massive debts and the problem is getting worse cccording to MPs.
The Committee of Public Accounts has published the damage report in question, which suggests that unrealistic efficiency targets produced by the government are leading to long-term damage to the overall finances of hospital trusts.
Both Conservative and opposition MPs sit on the committee. Members include Bridget Phillipson, Labour MP for Houghton and Sunderland South, and Anne-Marie Trevelyan, Conservative MP for Berwick.
In particular, the report suggests that acute hospital trusts face a crisis situation.
“There is not yet a convincing plan in place for closing the £22bn efficiency gap and avoiding a ‘black hole’ in the NHS finances,” the report comments.
Numerous hospital trust have been significantly over budget over the last 12 months, and it is already known that the NHS as a whole will run up a deficit in excess of £2.5 billion in the fiscal year.
The committee warns that the problem is getting worse, adding that “the financial performance of NHS trusts and NHS foundation trusts has deteriorated sharply and this trend is not sustainable.”
Another issue identified by MPs was that of temporary agency staff, with the Public Accounts Committee suggesting that this is an unacceptable financial burden on the NHS as a whole.
Although the NHS in England has already been promised an extra £3.8 billion of funding this year, it is suggested by the report that this will turn out to be a paltry figure compared to the extra spending that is ultimately required.
With the government having set the NHS the target of achieving £22 billion of efficiency savings by the end of the decade, the consensus of opinion among MPs is that this is unachievable.
Commenting on the issue, the aforementioned Phillipson spoke of the seriousness of the findings of the Public Accounts Committee.
“The Committee has found that NHS trusts face a multi-billion pound shortfall in funding, which is unsustainable. A lack of skilled and technical staff means NHS trusts are being forced to rely on agency staff to fill gaps in capacity. The Committee has recommended that NHS trusts in deficit have a realistic recovery plan by the start of the new financial year in addition to several other recommendations. The Government needs to ensure the sustainability of the NHS thousands of patients rely on each and every day.”
Responding to the claims of the report, a Department of Health spokesperson defended the funding of the NHS, and suggested that the plans of the government would address some of the worst of problems in the health service.
“We know some parts of the NHS are under pressure due to our ageing population, but we disagree with the claim that we are not acting quickly enough. We’re committed to the NHS and are investing £10bn so it can implement its own plan for the future — including an extra £4bn next year to help the NHS respond to the growing demand on services. We are intensively supporting challenged trusts to improve finances, while clamping down on rip off staffing agencies and helping hospitals become more efficient by sharing best practice across the service.”
The chairman of St George’s University Hospitals NHS Foundation Trust has suggested that the NHS is in the middle of nothing short of a financial disaster.
Indeed, Christopher Smallwood stated that the situation is actually accelerating, and the executive even suggested that hospitals may be unable to pay their staff over the next 12 months.
The foundation trust over which Smallwood presides serves 1.3 million people in Southwest London.
Yet the executive states that extent of underfunding in the NHS has left hospitals across the country both short of staff and unable to meet waiting time targets.
Cancer and accident and emergency care are both considered particularly critical by the Chief Executive.
Writing in The Guardian, Smallwood accused government ministers of being in little short of denial about the seriousness of the current health service and the root causes of the issues.
In particular, Smallwood was dismissive of the suggestion that it would be possible to achieve £22 billion of efficiency savings by the end of the decade.
The government has set this plan for the health service in order to plug gaps in the £30 billion deficit that is expected.
Such a strong intervention by a senior figure in the NHS will increase the pressure on the chancellor, George Osborne, ahead of his spending review on 25th November.
Of particular interest to healthcare professionals will be the comments of Smallwood that the NHS could even faced a widespread financial collapse next year.
The Chief Executive suggests that an extra £4 billion on an annual basis must be injected if disaster is to be averted.
This is double the amount that the Conservative government has currently earmarked.
Since 2010, the NHS has received annual budget increases of 0.8 per cent while its costs have been rising at 4-5 per cent annually.
Smallwood characterises the existing situation as a tipping point, indicating that it is essential for the NHS to address these issues as soon as possible.
In addition, the key figure also suggested that the ability to reduce the spending of hospitals in relation to temporary staff, and the general push for a seven-day service across the NHS by the end of the decade, will both be extremely difficult to deliver.
“By next year, hospitals’ deficits may have escalated to such a degree that the NHS could face widespread financial collapse. Since hospitals have to take out loans to finance their deficits, their accumulated debt will become so large that many could run out of borrowing capacity and cash. At this point, when they can no longer pay wages, the sort of financial crisis the NHS has never seen before will be unstoppable,” Smallwood wrote.
Hospitals bosses are now facing a stark choice according to the executive. “[Spending] more money every year or a sustained decline in the standards of healthcare and a financial collapse.”
The article penned by Smallwood underlines the critical issues that the government and the health service will have to address in the coming years.