Last month the publication of the third quarter performance report for NHS finance proved a disheartening read as the overall deficit reached £2.26bn. The figures, which covered the nine months from April to December 2015, showed the deficit was £622m worse than planned.
As we near the end of 2015/16, Monitor and TDA’s figures are very unnerving when compared to the original predicted year-end deficit figure of £2bn. The writing is on the wall and it is clear the deficit has already far exceeded what was originally forecast. It was also disappointing to read that many key performance targets are not hitting the mark including waiting times for A&E, referral to treatment and 62 day cancer waits.
The Q3 results are the next chapter in the continued decline in the financial position of providers that we have seen since 2013/14. This makes the deficit for the three-month period in 2015/16 nearly triple the deficit figure of this time last year, and based on optimistic levels of savings planned in the last quarter of the financial year, the overall forecast deficit for 2015/16 is now £2.37bn. With 75% of all providers, and 95% of acute trusts now in deficit, we have a systemic problem across the board and a difficult future for the NHS in its current form.
The Spending Review in the autumn saw the government announce the NHS would get an extra £8.4bn. It was reassuring that the government listened to the calls of those on the ground for the pledged money to be front loaded, with £3.8bn being put in this year. We expect the Budget later this month to formally confirm this. However, it’s clear that the state of the finances mean trusts are likely to use much of the new money just to keep afloat. It’s becoming apparent that many trusts will not be able to deliver the cuts needed to get the overall deficit down to £1.8bn by the end of March.
In November, directors of finance told us a Plan B for NHS finances needed to be considered, questioning whether the promised £8bn of additional government funding will be enough to turn the situation around. There is an additional question around how much reliance is being put on non-recurrent savings by the system, and how sustainable and additional saving plans for the future will be. Despite a pessimistic forecast, six months ago finance directors were relatively confident quality standards could be maintained – at least for the remainder of this financial year – but the latest Monitor and TDA report shows the situation has gone from bad to worse in the meantime. The figures add even further pressure to a worrying financial future, and those trying to manage it.
The Budget, and then the beginning of the new financial year next month, may shed some more light on what the long term NHS financial picture may look like.
