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Number of debt-ridden NHS trusts doubles

By Vivienne Russell | 20 September 2012

A growing number of NHS organisations in England are in the red, the Audit Commission warned today.

Photo: iStock
The NHS Financial Year 2011/12 report revealed that the number of NHS trusts and foundation trusts in deficit has more than doubled, from 13 in 2010/11 to 31 to 2011/12.

A total of 39 trusts reported a poorer financial position in 2011/12 than in the previous year and 18 NHS trusts and foundation trusts had to be given financial support from the Department of Health.

Overall, primary care trusts, strategic health authorities and NHS trusts report a combined underspend and surplus of £1.6bn, while foundation trusts reported a £0.4bn surplus. Most trusts reported an improved financial position.

The Audit Commission drew attention to the stark differences in health finances around the country. The majority of trusts in deficit were located in London or the Southeast, although the London region reported the highest surplus nationally.

Andy McKeon, managing director of health at the Audit Commission, said the surplus and underspend provided the NHS with some ‘financial room for manoeuvre in the future’.

But he added: ‘While nationally the NHS appears to be managing well financially, and preparing itself for the changes and challenges ahead, a number of PCTs and trusts are facing severe financial problem.

‘The Department of Health and other relevant national authorities need to focus their attention on the minority of organisations whose financial position is deteriorating, and on their geographical distribution and service standards.’

The commission also found that the NHS had achieved the first tranche of the £20bn savings required by 2014/15. These were found to have had no material effect on the numbers of frontline staff, although the number of managerial and administrative staff had fallen significantly.

But the productivity of acute and specialist trusts had not increased and there was little sign of services moving out of hospitals into the community.
Responding to the report, Mike Farrar, chief executive of the NHS Confederation, called on the new NHS Commissioning Board to help squeezed providers.

This should not be in the form of bailouts ‘but by releasing money to new clinical commissioning groups so they can work with providers to help put them on a sustainable footing by changing the type and range of services they provide’.

Farrar added: ‘NHS providers are expressing some confidence in meeting the immediate financial challenge. But pressures are continuing to grow. It is worrying that the number of trusts in deficit has more than doubled in the past year and a significant number of trusts are receiving financial support. This situation is likely get worse unless we take radical action.

‘Short-term fixes for struggling trusts are no longer possible.’

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