Providers Project £931m Year-End Defict

NHS trusts and foundation trusts have projected an end-of-year deficit of £931 million, £435 million worse than planned, NHS Improvement has reported.

Posting a year-to-date deficit of £1,281 million, the NHS provider sector is £365 million above the ambitious plan of £916 million set for this point in the year.

The figures, revealed in NHS Improvement’s operational and financial performance data for the third quarter of 2017/18, underline why NHS Confederation members are at ‘the end of their tether’, the organisation’s chief executive said on Wednesday.

The data, which for the first time included NHS vacancy figures, suggests that the savings and improvement in finances trusts and foundations trusts were expected to meet may have lacked realism and credibility in the context of increased demand – particularly during a quarter that traditionally includes busy winter months.

Of the 234 provider organisations in England, 107 of the 136 acute providers are in deficit, with a small number in significant deficit.

What the numbers say

Money not keeping pace with increasing demand 

NHS Improvement has encouraged these figures to be seen in the context of ‘extra pressures’ placed on a number of services, especially during winter months.

• Flu-related hospital admissions were three times higher than last year, making it the most significant flu season since 2010/11.
• A quarter of a million more A& E attendances.
• The volume of patients treated within 18 weeks is more than 10.27 million so far this year, 63,500 more than the same period last year.

Slight improvement in A&E performance

• Fewer patients waited over 12 hours than in the same period last year – there were 1,262 18-hour waits last year and 659 this year
• A deteriorating ability to meet increasing demand across several areas of activity – with negative effects on patients as a consequence.
• Failure to achieve the cancer 62 day to first treatment targets.
• Failure to achieve aggregate waiting time standards for 14-15 key diagnostics – with 5.8 per cent increase in the number of tests required compared to Q3 last year.

Cancelled electives to cope with winter demands affecting bottom lines 

• Providers have “halted the year-on-year decline in A&E performance” seen during the same period over the previous four years.
• Performance against the four-hour A&E standard was 89.5 per cent at the end of December, similar to performance for the same period last year which was 89.6 per cent. This, NHS Improvement, says “is testament to better operational planning ahead of winter by the NHS and to the hard work of NHS staff.”

Most winter preparedness plans included the cancellation of hundreds of elective admissions, a decision that we know has a contributing effect on many providers’ finances.

Decrease in delayed transfers of care 

• 303,229 bed days lost due to delayed transfers of care in acute hospitals in Q3, a decrease of 22.2 per cent (86,651 delayed days) from the same period a year ago.

This is a positive figure that reflects the major investment in reducing delayed transfers of care.

Staffing costs affecting trusts’ ability to balance books and provide high-quality care 

• There are 100,000 whole-time equivalent vacancies across the NHS.
• Agency spend continues to fall but high levels of vacancies in some organisations persist – there was £108 million less spent on agency staff and £441 million less than the same period last year, this is a fall of 20 per cent.
• However, bank staff costs were up by £664 million more than planned, reflecting that members continue to need to rely on bank staff to ensure wards are fully staffed in periods of high demand.

Productivity gains and cost improvement programmes (CIPs)

• Even at this difficult time, the provider sector has improved productivity by 1.8 per cent, nearly twice the NHS’ historical average.
• In the first nine months of the year, NHS trusts made more than £2.1 billion of savings – which is 3.3 per cent of total spend and around £100 million more than last year.

But despite these savings, providers had been asked to save 4 per cent. NHS Improvements admits that if provider organisations are to meet efficiency savings for the year, they will need to “significantly step up delivery of CIPs in the final quarter.”

‘Intolerable pressure’

Responding to the figures, Niall Dickson, chief executive of the NHS Confederation, commended NHS staff for doing a “heroic job”. But he said the numbers “reflect the intolerable pressure on a system which currently has a staggering 100,000 vacancies to fill.

“We have repeatedly pointed to severe underfunding in health and care and a year-to-date deficit in the English NHS of £1,281 million is just the latest evidence of this.

“Our members are at the end of their tether. It is simply not realistic or reasonable to expect the NHS to go on delivering a comprehensive universal service with inexorably rising demand and demonstrably inadequate funding.

The organisation is working with the Institute of Fiscal Studies and Health Foundation to conduct a study into the funding needs of the UK’s health and care systems over the next 15 years.

The work is designed to identify the challenges faced by health and care services and provide objective evidence of what will be needed going forward.