Official figures indicate that virtually every hospital in England is now in deficit, as financial difficulties in the NHS deepen and begin to appear out of control.
Of the 138 hospital trusts, just seven are still in surplus according to the 2015-16 third quarter accounts.
The figures were released by Monitor and the Trust Development Authority, and indicate that NHS trusts have overspent by in excess of £2.25 billion, once mental health and community services are taken into account.
Analysts have already indicated that the figures are nothing short of alarming, and have insisted that the government must gain control of the financial situation in the NHS immediately.
The deficit is already nearly triple the same figure in 2014-15, and guarantees that the NHS will achieve the unenviable distinction of one of the biggest overspends in its history by the end of the financial year.
Adam Roberts, of the Health Foundation think tank, was in no doubt of the seriousness of the situation.
“These figures are beyond dire. A comprehensive national plan is urgently needed. The situation raises the prospect of the Department of Health failing to balance the overall books, which would be a huge embarrassment given the extra money the NHS is getting.”
With the government having already announced a deal to invest a further £8.4 billion in the NHS, it seems that these measures will be grossly insufficient.
Although £3.8 billion is being invested next year, far from improving a health service that is becoming increasingly clogged up, this could merely serve to ensure that the NHS doesn’t run up a deficit next year.
Overspending on agency staff has been highlighted as one of the major problems as well as rising demand for services.
It is difficult to describe the NHS at present as being anything other than besieged by difficulty.
On the one hand, the financial problems inherent in the health service have been made all too apparent by these figures.
But on the other, political wranglings, disputes over pay and conditions, and increasing disorientation caused by underfunding and understaffing seem to be exacerbating the difficulties.
A Department of Health spokesman indicated that the figures had yet to benefit from a clampdown on agency staff, and that once this kicks in the health service should benefit financially.
The spokesman also indicated that it is essential for hospital bosses to demonstrate a financial grip over institutions by introducing the recommendations of the Lord Carter review on productivity.
This document was published earlier this month.
“We know finances are challenging, but this government is committed to the NHS and its values,” the spokesman added.
Financial figures have indicated that the deficit in the NHS in England is even worse than feared.
Health bosses had expected the health service to go £2 billion into the red by the end of the fiscal year.
But official numbers now confirm that the NHS is already £2.3 billion in deficit after just nine months of the existing financial year.
Regulators had previously suggested that attempts to reduce the rising costs in the NHS were having a successful impact.
Yet the latest figures would suggest that this process has been by no means as positive as indicated.
Pressures created by rising demands for care, high costs and problems with being able to discharge medically fit patients to suitable care outside hospital were blamed for the huge deficit.
Analysts have suggested that the figures are indicative of difficulties within the NHS in capping the number of agency staff resident.
Indeed, this impression has been confirmed by recent Freedom of Information requests, with data indicating that nearly £1 billion more is being spent on agency staff than was intended.
Monitor and the NHS Trust Development authority jointly released the figures, as the clock counts down to the cessation of Monitor and creation of the new NHS Improvement regulator.
The extent of financial difficulties in the NHS is underlined by the fact that the overall deficit is already over £600 million worse than planned for.
Meanwhile, over 75% of providers are currently in the red.
John Appleby, the King’s Fund chief economist, was in no doubt that the figure should be seen as significant.
“This has significant implications. Any shortfall will come out of next year’s budget, eating into the extra funding provided in the [government’s] spending review and leaving even less money for essential changes to services. If an end-of-year deficit approaches the worst-case scenario laid out in these figures – £2.8bn – it is hard to see how the Department of Health will avoid overspending its budget for the year, something that has never happened before.”
Meanwhile, Paul Briddock, the policy director for professional body the Healthcare Financial Management Association, pointed out that the situation was far worse than had been predicted.
“The writing’s on the wall – the deficit has already far exceeded what was originally forecast. It’s also disappointing to see many key performance targets are not hitting the mark, including waiting times for A&E, referral to treatment and 62-day cancer waits.”
The Department of Health defended the financial position of the health service, pointing to £10 billion of extra investment, but it seems that the NHS faces absolutely massive financial challenges in the short-to-medium-term.
A comprehensive financial report from the health regulator Monitor indicates that the NHS faces terminal financial difficulties.
NHS trusts in England managed to accumulate a collective deficit of nearly £1 billion in merely the first three months of the existing financial year.
According to regulators, this represents the worst financial position for the NHS in a generation.
Figures released by Monitor show that NHS Foundation Trusts had a deficit of £445 million for the surveyed period, while other NHS trusts racked up a £485 million deficit for the first three months of the year.
Although the overall picture can be considered alarming, the health regulator was particularly damning regarding the financial position of foundation trusts.
Monitor warned that this sector is “under massive pressure” and simply cannot continue in the same vein for much longer.
The report in question surveyed the financial health of 151 NHS foundation trusts, while Monitor sought the assistance of the Trust Development Authority (TDA) to cover 90 NHS trusts.
It is not merely the quantity of debt that is alarming for the health sector, but also the proportion of bodies suffering from financial difficulties and deficits.
Of 90 trusts in the TDA report, 72 ended the financial quarter in deficit, with 118 foundation trusts also in the red according to the health regulator.
This means that nearly 80 per cent of NHS trusts in England are currently running a deficit. Additionally, 75 per cent of the trusts that were in deficit are acute hospital or specialist trusts.
Although several reasons for the overspend were cited in the Monitor report, it is suggested that higher staff costs than expected and an over-reliance on expensive agency staff particularly contributed to the problems.
In addition, the report also reflects that foundation trusts were unable to meet several national waiting time targets.
Perhaps most critically, the A&E target for people to be seen within four hours was not met. Targets for routine operations and some cancer treatments also went by the wayside.
Commenting on what are unquestionably alarming figures for the health sector, Dr David Bennett, chief executive at Monitor, commented that real change is necessary in order to address the situation.
“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,” Bennett opined.
However, Unite union national officer Barrie Brown suggested that efficiency savings were in fact the root cause of difficulties for the health sector. Brown instead asserted that increased spending and more extensive funding was required for the NHS to avoid a national emergency.
“The financial chickens are coming home to roost big time. 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,” Brown stated.
This latest deficit follows overspending of £820 million by NHS and foundation trusts over the last twelve months. But it seems likely that the deficit among the same organisations could ultimately top £2 billion for the existing financial year.
A report in The Guardian newspaper suggests that Government ministers have taken steps to hide damning NHS statistics related to the funding of the organisation.
According to The Guardian report, there is an unprecedented £2 billion deficit in the NHS, and it is suggested that this has been buried in order to ensure that the Conservative party conference is not overshadowed by headline news.
Jeremy Hunt, the health secretary, is under pressure to explain why data that is in effect from the NHS’s own regular health checks has been withheld from publication.
Meanwhile, top NHS figures have suggested that the government is effectively attempting to bury bad news.
In particular, a senior figure at Monitor stated that the organisation had been “leaned on” by Whitehall to delay its report.
The Monitor report indeed confirms that the financial position in the NHS is declining.
Reports from both Monitor and the NHS Trust Development Authority were expected, with the Monitor quarterly report usually published around the time of the organisation’s board meetings last month.
It has been described by NHS insiders as extremely odd and significant that Monitor has departed from its usual practice.
Figures were apparently submitted to Monitor in time for the publication of the reports, and The Guardian quotes one boss of Monitor as stating that the publication was delayed due to political pressure.
“We are being leaned on to delay them and I have a suspicion that the sensitivity would be less after the Tory party conference,” the unnamed individual stated.
Thus, although data is not yet fully available, it is suspected, according to sources close to Monitor, that hospitals in England ended the first fiscal quarter of the financial year over £800 million in the red.
This would represent a gulf similar to last year’s £822 million annual deficit, and indicates that the NHS is on course to lose £2 billion by the end of the fiscal year in March.
Although the government has declined to comment on the subject, the Labour party certainly felt obliged to respond to the issue.
Heidi Alexander, the shadow health secretary, commented: “This appears to be a cynical attempt to suppress bad news ahead of the Tory party conference. It makes a mockery of Tory claims to be committed to transparency in the NHS, and leaves Jeremy Hunt with very serious questions to answer. These figures must now be published in full as a matter of urgency.”
Monitor has officially denied any political pressure related to the publishing of figures.
But the issue once again underlines the funding challenges that the NHS will face in the coming years.
The foundation trust sector ended the year in deficit with over half of all foundation trusts losing money and a record one-fifth in breach of their licence according to health sector regulator Monitor’s annual report and accounts for 2014/15.
In his review of the year, Dr Bennett, Monitor’s chief executive, states that foundation trusts faced unprecedented demand for services, with a 6.5 percent growth in GP referrals and a 7.5 percent rise in ambulance calls.
“Experience has taught us that struggling trusts cannot resolve their difficulties alone: they need a concerted, long-term response from the various providers, commissioners and users of services who make up their local health economy,” he notes.
“Individual trusts, however, each need a reliable plan for the future and many are falling short on this. A review of trusts’ five-year strategic plans showed that only 30 percent would secure a sustainable future.”
The annual report also sets out how Monitor has developed capacity amongst foundation trusts to deal with the challenges they face and support them to prevent operational problems.
Dr Bennett continued: “Our priority has been to help local commissioners and providers redesign the way they deliver healthcare for longer-term sustainability while continuing to maintain their operational performance. All this has to be done by the sector in the face of increasing demand and constrained funding.”
NHS foundation trusts need to redouble their efforts to make efficiency savings and reduce a deficit that is close to £1bn this year the healthcare regulator Monitor has warned.
In addition to highlighting its concerns over the deficit, the regulator has also informed the 152 foundation trusts that they will come under increasing pressure unless they demonstrate faster improvements in productivity.
The latest forecast deficit from all foundation trusts for 2015/16 is £989m – a figure that Monitor considers “unaffordable.” To tackle the spiralling deficit, the regulator has pledged to clamp down further on poor financial and operational performance, including rating all foundation trusts on a sliding scale.
Speaking this week at the Healthcare Financial Management Association annual conference in Birmingham, Monitor’s chief executive Dr David Bennett said: “The NHS is in the difficult position of having to design its future at the same time as fixing its present”, said Dr Bennett. “The Five Year Forward View sets out a vision for how the NHS needs to change, but it is going to be hard work getting there, especially as we have a huge challenge on our hands right now.
“I recognise that just because deficits mostly sit with providers doesn’t mean they are the only NHS organisations that need to up their game. Nevertheless, current plans are unaffordable, and all providers have to make a major contribution to efficiency improvements, even those who aren’t currently forecasting to be in deficit. This means hospitals leaving no stone unturned, and adopting best and better practice everywhere; avoiding unnecessary expenditure, and adopting new ways of working.”