By Tom Forrest | 27 November 2013
Four out of ten NHS trusts did not achieve their planned savings in the 2012/13 financial year creating concerns about their long-term financial resilience, according to research published by Grant Thornton.
Trusts were said to be struggling with their Cost Improvement Plans and Quality, Innovation, Productivity and Prevention targets. These are vital elements in the NHS’s attempt to close a £30bn funding gap.
Grant Thornton found 44% of trusts had a shortfall, 50% had to rely on non-recurrent savings and 50% had future savings programmes where there were concerns about achievability.
‘While non-recurrent funding has helped many NHS bodies balance their books in the short term, more effort needs to be put in to the development and implementation of savings schemes,’ said Jon Roberts, a partner at Grant Thornton.
Roberts added that providers and commissioners had to plan jointly for the long term ‘rather than just the year ahead’. He also called for greater incentives and reduced barriers to change in the wider health sector.
A number of finance directors were quoted in the report, giving a flavour of the pressure felt across the health service.
Rick Tazzini, director of resources at North Essex Partnership University NHS Foundation Trust, suggested that 2014 would be the ‘crunch’ year.
‘We are going to struggle to make the 4% CIP, particularly from in-patient wards. I defy anyone to further reduce the costs of my busy mental health in-patient wards without further compromising quality and safety,’ he said.
Tim Bennett, director of finance and deputy chief executive at University Hospitals of Morecambe Bay NHS Foundation Trusts, explained the level of detail needed to keep on top of the finances.
‘We have a 12-month rolling cash-flow forecast, a detailed three-month cash projection. A team produces the weekly cash position. We are running too close to the wire not to be managing cash in this forensic way,’ he is quoted as saying in the report.
The research suggested that trusts with ‘workforce issues’ were more likely to be in deficit. It found that 89% of non-foundation trusts did not meet sickness absence targets.
‘Trusts will need a motivated and effective workforce to achieve financial resilience and deliver a high quality of patient care,’ said Paul Hughes, NHS provider sector lead at Grant Thornton.
‘Smarter trusts will be working hard to ensure that staff play a positive role in improving quality and efficiency.’
