Friday, 7 November 2014

Financial pressures putting NHS trusts at risk, says spending watchdog

‘Deeply alarming report’ from National Audit Office shows future sustainability of NHS is at risk, says MP Margaret Hodge

Margaret Hodge, chair of the public accounts committee, in her office at the House of Commons. Photograph: Shamil Tanna for the Observer

Financial pressures are putting NHS trusts at risk, Whitehall’s spending watchdog has found. It revealed that ministers were forced to find more than half a billion pounds of emergency funds to prop up struggling health trusts last year.
Margaret Hodge, the chair of the Commons public accounts committee, said the “deeply alarming report” showed the future sustainability of the NHS was at risk.
A quarter of NHS and foundation trusts were in deficit by the end of the financial year, with the number in the red rising from 25 to 63 over 12 months, according to a report issued on Friday by the National Audit Office (NAO).
The number of foundation trusts in deficit has doubled from 20 to 41 while the gross deficit of NHS and foundation trusts has increased by 150% from £297.2m to £743.3m, the report said.
The figures – brought together for the first time by independent auditors – will heighten political tensions over the NHS, which is set to be one of the central issues of next year’s general election.
Hodge said: “We all know that when trusts are under this kind of financial stress it is the quality and safety of patient care that can suffer.
“An increasing proportion of foundation trusts cannot meet the terms of their licence, including meeting key measures of quality and outcomes, and the NHS Trust Development Authority had concerns about more than half – 55 of 98 – NHS trusts.”
In the NAO’s third report on the financial health of NHS bodies, auditors sought to identify organisations in financial distress and decide if the NHS as a whole is financially sustainable.
The report found that the Department of Health has now issued £1.8bn in cash injections to 46 NHS bodies since 2006-07, while just £160m has been repaid.
Among the struggling trusts to be bailed out in 2013-14, North Cumbria university hospitals received the highest total of £42m, followed by Peterborough and Stamford hospitals with £40.7m and University hospital of North Staffordshire with £37m. Forty-four health trusts moved from surplus in 2012-13 to deficit in 2013-14, according to the report.
Overall, NHS bodies achieved a net surplus of £722m in 2013-14 – a third of the £2.1bn recorded in the previous 12 months, the report found.
The spending watchdog added that a rising proportion of foundation trusts could not meet the standards met by the healthcare regulator Monitor, with 18% in breach of their licence.
The government allocated £95.2bn to NHS England in 2013-14 to pay for NHS services, the NAO said.
Simon Stevens, NHS England’s chief executive, said: “An ageing population, a growing population and the possibilities of new treatments all mean that pressures are real and we need to get going on the new path set out in the NHS five-year forward view.”
David Cameron has pledged to maintain funding of the NHS for the full five years of the next parliament, if he is in charge, despite that meaning deep cuts in other Whitehall budgets.
Labour said it would give it an extra £2.5bn a year, though there is confusion over when that extra cash would actually be available. The Liberal Democrats are similarly promising to extend the ringfence and give the NHS an extra £1bn a year from 2016.
At £115.1bn, the Department of Health’s budget for next year is due to be just over £2bn more than this year.
Commenting on the report, the department said the NHS budget had increased by £12.7bn since 2010 and most health providers are still in financial balance or better.
A spokesman said: “Financial discipline must be as important as safe care and good performance. Many NHS organisations are already achieving this and all understand the need for greater efficiency.
“Our reforms put power in the hands of local doctors and nurses to make decisions and control their own budgets to make sure patients receive the best services.”

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