Audit Scotland has predicted that it will be impossible for some Scottish health boards to balance their books.
The prediction comes amid a turbulent financial period for the NHS.
Audit Scotland provides the Auditor General and the Accounts Commission with services to check that public money is spent efficiently and effectively.
And the organisation is very concerned about the state of finances in the Scottish NHS.
“NHS boards are facing increasing costs each year, for example drug costs increased by 10%, allowing for inflation, between 2012/13 and 2014/15. NHS boards will need to make unprecedented levels of savings in 2016/17 and there is a risk that some will not be able to achieve financial balance,” the Audit Scotland report asserts.
In order to address the situation, the watchdog believes that massive savings will need to be made during the existing financial year.
Meanwhile, NHS funding is failing to keep pace with the increasing demands on services in Scotland.
Thus, it is perhaps not surprising that performance is also beginning to diminish for the Scottish NHS.
Audit Scotland’s annual report on the NHS said performance had actually declined in six of the eight targets measured over the past four years.
Health Secretary Shona Robison insisted the Scottish government had made “significant improvements”.
Robison also spoke of an explicit strategy that exists with the intention of turning the fortune of the NHS in Scotland around.
The report claimed that Scottish NHS organisations face a challenge in balancing performance requirements with expenditure needs.
“Boards are struggling to meet the majority of key national standards and the balance of care, in terms of spending, is still not changing. It is difficult balancing the demand for hospital care, alongside providing more care in the community. Boards need to ensure they maintain high-quality hospitals, while investing in more community-based facilities.”
An ageing NHS workforce in the nation is also problematical, with problems training and recruiting staff also apparent.
Commenting on the issue, Caroline Gardner, the Auditor General for Scotland, suggested that joined-up thinking is essential in solving the problems.
“The Scottish government has had a policy to shift the balance of care for over a decade but despite multiple strategies for reform, NHS funding has not changed course. Before that shift can occur, there needs to be a clear and detailed plan for change, setting out what the future of the NHS looks like, what it will cost to deliver and the workforce numbers and skills needed to make it a reality.”
Already there has been considerable political debate in Scotland over the Audit Scotland report.
An NHS trust has been forced to resort for crowdfunding in order to purchase equipment for a new hospital unit.
The Royal National Orthopaedic Hospital (RNOH) in Stanmore, north west London, believes that it will be impossible to get this unit started without donations from the general public.
Government money is currently diverted to frontline staff and services according to the trust, ensuring that investment in updating facilities is problematical.
Responding to the news, the GMB union described it as a “damning indictment” of NHS funding.
The ‘Make it Possible’ project is a first for any NHS trust and breaks new ground, with the ideas for improving care coming from patients and families.
RNOH is hoping to fund a spinal injuries unit from the crowdfunding project, with new equipment to rehabilitate patients and additional beds particularly targeted.
Despite criticism, the campaign has already raised £126,000 of the £400,000 pounds that the hospital ultimately hopes to gather via donations.
Rob Hurd, chief executive at the RNOH, explained that the crowdfunding campaign is simply a necessity.
“We have to be frank, capital is constrained in our National Health Service and investment in facilities is really difficult at this time. We are putting all our money into frontline nurses, doctors and providing the services. That means the infrastructure that we have got doesn’t get replaced as quickly as we would like. So we need the help of donations and charitable sources to make those additional investments. So we really value those donations because without them we cannot even get started”.
The Royal National Orthopaedic Hospital is a world-leading treatment centre for spinal cord injuries
Every year the hospital deals with more than 2,000 patients from all over the UK.
But the infrastructure of the hospital is decaying somewhat, with the institution comprising numerous ageing buildings and portable cabins, some of which date back as far as the war years.
And National Secretary of the GMB, Rehana Azam, was strongly critical of the government policy which has made such an approach necessary.
“That the Royal National Orthopaedic Hospital is asking members of the public to crowdfund improvements is a damning indictment of this government’s reluctance to properly fund the NHS. It seems that it’s not just workers and patients who’re expected to suffer at the hands of NHS cuts; apparently the public’s bank balances are too.”
A Department of Health spokesperson stated that £10 billion is being invested nationwide into the NHS, including about £4 billion extra this year and a further £20 billion to fund capital programmes such as maintenance and building projects.
There is no doubt that targets are an important part of the contemporary health system, but figures regarding a series of fines for inadequate patient treatment have recently attracted criticism.
Hospitals in the NHS have been fined £600 million annually for missing the target in question, but managers in the health service claim that the system is shortsighted, needlessly punishes patients, and results in the NHS being pushed further into debt.
NHS Providers, which represents hospital trusts, says that the fines levied by GP groups are nonsensical, given that about 90% of trusts are in deficit and the sector is due to end the financial year later this week an estimated £2.8 billion in the red.
Chris Hopson, chief executive of NHS Providers, indicated that he has spoken to individuals in the hierarchy of NHS trust and that they consider the fining process to be utterly counter-productive.
“NHS trust chief executives tell us they are intensely frustrated by these fines and see them as shortsighted, counterproductive and reflecting a sense of denial about how serious the problems facing hospital, community, mental health and ambulance services really are.”
Fines are issued when trusts fail to treat patients within a specified period of time, and also when waiting lists are not reduced satisfactorily.
The fines are issued by Clinical Commissioning Groups, but trusts chiefs believe that the charges are hindering the ability to hire staff and deliver services to the general public.
One particularly damning figure relates to Barts Health; the NHS’s largest trust based in London.
This NHS trust was fined in excess of £52 million for missing targets at the four hospitals it is responsible for in England’s capital.
“This is not about condoning poor performance or poor clinical care for patients. Rather it is about recognising that fines are a blunt instrument for improving patient care,” the aforementioned Hopson commented.
Prof John Appleby, chief economist at the King’s Fund health thinktank, believes that fines are utterly perverse, and that the way they are implemented can often be completely unjust and unreasonable.
“The cause of some of these [waiting time] problems is lack of money [and so] to take away money from an organisation seems a bit perverse.”
Appleby added that there is a fundamental contradiction at the heart of this issue, and that the government should reassess the way that it deals with the problem.
“If a trust has admitted more emergency patients than it should, it could be because of a lack of investment in community services. It’s then a bit ironic to fine them for not meeting this target when the lack of community services is outside their control. You can see how these financial incentives might work in theory, but they may not be working in practice and they may be simply making problems worse in some cases.”
Responding to these comments, NHS England suggested that the fines are indeed justified, but also emphasised – in an apparent contradiction of this assertion – that they would not be imposed over the next 12 months, as the NHS attempts to ensure that finances are once more acceptable.
“For over a decade, well-established NHS practice has been that hospitals are incentivised to eliminate long waits for their patients, and rightly so. The successful result has been an enormous fall in typical long waits for an NHS operation – from over 18 months to well under 18 weeks,” a spokesman said. However, for next year we’ve already decided to suspend penalties and instead allocate an extra £1.8bn to incentivise hospital performance improvement.”
NHS trusts are expected to be collectively nearly £3 billion in deficit by the end of the fiscal year.
As the health service faces increasing financial pressure, reports suggest that NHS trusts are being incentivised by the government to change the way that they report on their finances.
And critics believe this is little short of a desperate attempt to reduce a massive health service deficit that would generate negative headlines, and indicates that the NHS is on the verge of malfunctioning.
By the end of the fiscal year, it is possible that the health service will have accumulated a financial deficit of £3 billion, and it is certain that the best case scenario will be a deficit in the region of £2.5 billion.
This is the highest in the history of the health service, and is indicative of widespread failures by trusts across the NHS to cut spending and operate more efficiently.
However, leaked documents indicate that the Department of Health has embarked on a national programme to change current accountancy practices, and to encourage trusts to be more optimistic about their financial problems.
Briefing documents indicate that trusts will be asked whether they are being excessively prudent in forecasting income received from outside the NHS, or how much they are likely to spend on agency doctors and nurses.
Nineteen specific accounting areas are to be explored, such as reclassifying assets so they are kept off the balance sheets, or extending their asset lives so they can be valued more highly.
Sally Gainsbury, senior policy analyst at thinktank the Nuffield Trust, was extremely critical of the practices outlined in the documents, suggesting that they are little short of outright fraud.
“This definitely falls into the area of fiddles – being clever about when you book income and when you book expenditure. It pushes most of the problems into the next financial year, it does not solve them. No one is thinking about the long term position. It is misleading the public about what the NHS’s costs really are.”
It is clear that the financial situation of the NHS is increasingly desperate, and the latest figures raise the prospect of the Department of Health receiving a Treasury bailout.
Figures from NHS regulators show that the deficit for the first three quarters of the year is already £2.26bn; triple what it was for the whole of the previous year.
Despise the government having pledged an additional £8.4 billion to the NHS, experts generally believe that this will be greatly insufficient to balance the books.
There is also considerable scepticism that it will be remotely possible for the NHS to achieve the £22 billion of efficiency savings that have been targeted by Chancellor of the Exchequer George Osborne.
A report in The Guardian newspaper has concluded that a financial crash in the NHS is essentially inevitable based on existing figures.
The extent of the financial woes in the health service is well-documented, with trusts across the NHS in England facing a collective deficit in excess of £2 billion.
Indeed, The Guardian references the Public Accounts Committee’s recent verdict on hospital finances, and concludes that the final figure for the existing fiscal year will probably exceed £2.5 billion.
It seems absolutely clear that this cannot be sustained over a significant period of time, and indeed The Guardian draws this precise conclusion.
The Guardian also references the fact that NHS England and Monitor have both been subjected to severe criticism recently, particularly with regard to the setting of unrealistic efficiency targets.
This has damaged the financial position of many trusts, and also created an impression that NHS departments all over the country are fundamentally failing to deliver adequate provisions and services.
Indeed, NHS England has conceded this point, and the efficiency targets have been cut from 4% to 2% for the coming year.
MPs involved in the Public Accounts Committee report suggested that the NHS has massive problems to solve with regard to agency staff, and until there was credible progress on this and other serious issues, that the goal of making efficiency savings of £22 billion would be forlorn.
While funds have been set up in order to address the financial and logistical problems in the NHS, figures also indicate that these have already been largely exhausted.
For example, all but about £340m of NHS England’s £2.14bn Sustainability and Transformation Fund has been soaked up in stabilising the system.
The situation in the NHS is now so serious that the delay in making decisions about the future of the NHS has potentially serious consequences.
As The Guardian notes, there is now a heightened risk that the Department of Health will end the next financial year in breach of its revenue expenditure budget authorised by parliament.
Of course, the Department of Health itself has resolutely defended the expenditure and budget of the NHS.
But it is clear is that both government policy and plans for the future of the health service are proving unsatisfactory for its effective operation.
It is now 18 month since the Five Year Forward View document was published, which was intended to outline the path towards an innovative vision of new models of care, improved clinical quality, a better experience for patients, and financial sustainability.
Yet the financial crisis in the NHS is now so severe that The Guardian newspaper opines that it is all but impossible to see anything approaching an acceptable long-term outcome.
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.”
An 18-month review looking at ways to cut waste and enhance efficiency in the NHS, has found improving staff productivity by five minutes every shift could save £280 million a year.
The results will be particularly damaging for the health service, considering that the Chancellor of the Exchequer George Osborne has already commanded the NHS to achieve efficiency savings worth £20 billion by 2020.
Indeed, defenders of the government, and no doubt the government itself, will be inclined to be more bullish about its plans after the culture of waste that emerged from the report.
The review, by efficiency expert Lord Carter, also found that with better procurement, the NHS could save £700 million every year; amounting to approximately 20% of the overall efficiency savings targeted by the government.
This is extremely critical information considering that the NHS is facing a £2 billion financial deficit by the end of this year alone.
The report commented that extensive investigation into the state of the NHS has revealed massive problems with procurement.
“A sample of 22 trusts use 30,000 suppliers, 20,000 different product brands, over 400,000 manufacturer products codes and more than 7,000 people are able to place orders.”
Analysts have indicated that high-quality patient care and sound financial management must both be present in order to deliver healthcare quality of international standard.
And this review would certainly suggest that the NHS has some distance to go in order to fit this description.
The report also made some tangible suggestions regarding the future direction of NHS procurement.
“To improve the quality of care, hospitals must grasp resources more effectively, especially staff, which account for more than 60p of every pound hospitals spend,” the review asserted.
The report comes as a separate study from the National Audit Office (NAO) found that in 2014 there was an overall staffing shortfall of around 5.9% in the NHS.
This would equate to a total gap in the region of 50,000 clinical staff.
There is no doubt that this sort of figure should be considered extremely significant, considering the financial travails that the NHS faces in the coming years.
Indeed, it has already been argued that staffing difficulties and recruitment issues will be a major concern for the NHS between now and the end of the decade.
With the government deadlocked in talks with junior doctors, and facing similar rebellion from nurses over bursaries, any news regarding possible ways of saving money will undoubtedly be received gratefully.
According to research conducted by the King’s Fund, Britain is spending significantly less on its health service compared to international neighbours.
And the organisation predicts that by the end of the decade the figures spent on health in the United Kingdom will be more than £43 billion less than the average spend by Eurozone countries.
The UK is devoting a diminishing proportion of GDP to health and is now a lowly 13th out of the original 15 EU members in terms of investment.
While the government claims that it has invested a significant tranche of cash into the health service, this latest research contradicts these claims.
The Chancellor of the Exchequer, George Osborne, had already promised an additional £8.4 billion in real terms by the end of the decade.
However, the NHS faces deficits of £30 billion by 2020, and the lion’s share of this is to be addressed via efficiency savings.
Commenting on this report, Heidi Alexander, the shadow health secretary, suggested that the government policy is nothing less than a dereliction of duty towards a revered British institution.
“No amount of spin from ministers can disguise the fact that this decade is set to be marked by the longest and deepest squeeze on NHS finances in a generation. Our country is increasingly looking like the sick person of Europe, with spending on health falling far behind other neighbouring countries. This squeeze on health spending is bad for the NHS and it is bad for patients. It is clear that our health service is going to need much more money than this government is prepared to spend.”
Professor John Appleby, who led the study, outlined the raw data behind the assertion of the King’s Fund in an article.
“UK GDP is forecast to grow in real terms by around 15.2% between 2014-15 and 2020-21. But on current plans, UK NHS spending will grow by much less – 5.2%. This is equivalent to around £7bn in real terms, increasing from £135bn in 2014-15 to £142bn in 2020-21. But if spending kept pace with growth in the economy, by 2020-21 the UK NHS would be spending around £158bn at today’s prices – £16bn more than planned.”
It is increasingly obvious based on the avalanche of data emerging that massive investment is required in the NHS in the foreseeable future.
This is succinctly illustrated by the funding problems that the health service faces, coupled with a raft of logistical and labour-related issues.
The report from the King’s Fund simply provides another example of this increasingly evident trend.
However, commenting on the latest research, the Department of Health nevertheless defended The existing NHS budget.
“Rather than there being a political decision about levels of spending on healthcare, for the first time ever, the NHS said collectively in the Five Year Forward View what it needed for the future to transform services for patients. We’re meeting our side of the bargain, with £10bn more from a strong economy, raising the NHS budget to the highest level in its history and increasing spending every year. We will also ensure the NHS gives good value for taxpayers.”
A raft of top medics have written a letter to The Guardian newspaper condemning the policy of the Chancellor of the Exchequer, George Osborne, toward the National Health Service.
The letter suggests that Osborne’s “front-loaded NHS funds” do not represent extra money, but is in fact merely a forwarding of funds already promised by the Parliament to the NHS.
Medics who have signed the letter point out the statistic that has been reported by the Healthcare Times on numerous occasions previously; namely that the NHS requires an additional £30 billion of funding by 2021.
Yet the Chancellor of the Exchequer has only committed an additional £10 billion at the time of writing, basing efforts to address the funding gap on completely unrealistic expectations of £20 billion of efficiency savings.
According to the signees of this particular letter “this is a frighteningly unrealistic expectation for a health system already among the world’s most efficient. Efficiency savings are fast becoming a euphemism for funding cuts.”
The prospect of funding such incredibly high year-on-year efficiency savings is, at best, incredibly logistically unlikely, and at worst potentially disastrous for the health service.
NHS trusts will be expected to push through a deficit of £2.2 billion this year to avoid compromising patient care through cuts.
The medics signing this open letter are of the belief that it is completely unsafe to expect the same scale of savings between now and the end of the decade.
Indeed, independent experts who have commented on the subject have all agreed that the rapid expansion of non-emergency seven-day services will need extra staff and funding, far from it being feasible to cut everyday expenditure.
Furthermore, NHS England CEO Simon Stevens has specifically said seven-day services would need to be gradually introduced, with “careful and disciplined phasing-in”.
Yet the government has already stated its intention to switch to a so-called seven-day culture in the NHS in the foreseeable future.
The letter notes that no additional funds for this proposal have appeared at the time of writing, indicating that further cuts will be required in order to provide something that the writers of the letter claim is little demanded by the public.
It appears that public health, social care and nursing student grants will all be caught in the near future, as Osborne continues to justify his fiscal plan for the health service.
Finally, the letter notes that the Health Secretary has already promised to work with a cross-party political consensus, along with professionals in the NHS, in order to have an open discussion about the future funding of the health service.
The signees conclude: “As NHS staff and students, we urge him to maintain the spirit of this promise, in open discussion with the professions and other political parties. The safety of the public deserves nothing less.”
The letter was signed by over 75 healthcare professionals.
Four NHS employees have been found guilty of defrauding the health service of more than £3 million.
The quartet of individuals will be sentenced next year having been found guilty at Leeds Crown Court.
Four other defendants were cleared of charges of conspiracy to defraud.
The convicted individuals had become involved in a plot against Leeds and York Partnership NHS Foundation Trust and NHS England.
Huw Grove, from Bristol, and Terence Dixon, from Monmouth, were found guilty at court.
Neil Wood had pleaded guilty to charges of conspiracy to commit fraud at an earlier hearing and Lisa Wood pleaded guilty to one count of money laundering.
Jaqualine Grove, from Bristol, Daniel Benton, from Leeds, and Lisa and Wayne Hill, from Colchester, were acquitted of all charges.
The trial, which took place over several weeks, found that Neil Wood, 41, who was employed by the Leeds and York NHS Trust, had outsourced the vast majority of work to another defendant Huw Grove’s company, The Learning Grove.
In total, The Learning Grove was paid £3 million pounds worth of NHS money.
Meanwhile, around half of the money paid into this company was then transferred to another firm, whose sole director was Wood’s wife Lisa.
Emails exchanged between Wood and Grove detail how the profits would be split, and indeed what they intended to do with the money once it had been embezzled.
Leeds Crown Court heard evidence indicating that when Grove had initially moved to NHS England that he worked with outside companies, and told them not to deal with the NHS directly, instead directing them to work with The Learning Grove.
This company was able to negotiate discounts, with costs later inflated when invoices were submitted to the NHS.
Commenting on the case, Simon Higginbotham, a specialist fraud lawyer at the Crown Prosecution Service, stated that the level of fraud was bewildering.
“Neil Wood used his position to syphon off millions of pounds from the NHS for his own benefit. The fraud is staggering – Wood outsourced services which could have been undertaken in-house so that his wife, friends and contacts received vast sums of money they were not entitled to. However, of the money his friends received, Neil Wood more often than not received a 50% cut. In total, over £3m was fraudulently spent in this way, and Neil Wood received over half of that.”
The defendants will be sentenced at Leeds Crown Court on 8th January.
Despite pressure from campaigners, NHS England has indicated that it will not publish results of a national audit prompted by the death of a baby girl.
The organisation has been exploring the quality of investigations that were carried out after the tragic incident took place.
But the commissioning body has indicated that although it accepted the recommendations of an independent review, it will not make public the methodology or findings of a national audit suggested by it.
The process had been instigated by the untimely demise of baby Kate Stanton-Davies.
Kate tragically died at a midwifery unit run by the Shrewsbury and Telford Hospitals Trust in March 2009.
It is accepted that there were numerous failures made at the unit at the time of Kate’s death.
The parents of the child have reacted angrily, not unreasonably pointing out that they expected to see a process that could be described as transparent.
Yet NHS England has described the ongoing reaction to the investigation as an internal matter.
NHS England is the existing supervising authority for midwives practising in England.
As part of this responsibility, the organisation commissioned expert Debbie Graham to review events surrounding Kate’s death.
This followed a jury inquest and an investigation by the Parliamentary Health Service Ombudsman in 2013 which both concluded that the death was avoidable.
Both processes also concluded that there had been huge failures in the care throughout the time that Kate stayed in the hospital.
Graham went on to heavily criticise the local supervisor, suggesting that the quality of investigation carried out have been entirely unfit, particularly in terms of containing multiple inaccuracies.
The report had stated at the time that NHS England should carry out an audit in order to “seek assurance that the weaknesses in the investigatory process identified in this review are no longer inherent in the current process.”
Yet it seems now that the results of this process will never be made public. It is those understandable that parents of the infant are extremely disappointed by the process.
According to investigations, Kate was born “hypothermic, pale, floppy and grunting” at Ludlow midwifery led unit in Shropshire, in March 2009.
Her mother had been incorrectly classified as being low-risk.
That decision will be viewed as controversial, and indeed there will be question Marks regarding precisely why it has not been published.
It seems that these questions will go unanswered.