NHS finances deteriorating quickly, HFMA survey finds

2 Dec 14

NHS finance directors have warned that both commissioners and providers in the health service face a worsening financial position in 2014/15 compared to 12 months ago.

In its latest NHS Financial Temperature Check report, the Healthcare Financial Management Association said that 39% of commissioner FDs and 74% of those working in trusts were forecasting a worsening year-on-year financial position.

In addition, 38% of the 191 finance directors polled said their financial position was likely to be worse at the end of 2014/15 than had originally been forecast.

The research, which was conducted before Chancellor George Osborne announced plans for an extra £2bn for the NHS in 2015/16, showed the NHS currently faced severe financial hardship, HFMA policy director Paul Briddock said.

‘While we welcome the recent announcement of additional funding for 2015/16, there is no quick fix,’ he added.

‘It is clear that there has been a rapid deterioration in the financial position of the NHS during this financial year and financial pressure is being felt across the whole NHS system, but particularly in acute trusts.’

Speaking to Public Finance prior to the chancellor’s announcement, HFMA president Andy Hardy said that, without additional cash, the NHS as a whole – across both commissioners and providers – would be in deficit in 2015/16.

Hardy, who is also the chief executive at the University Hospitals Coventry and Warwickshire NHS Trust, said it was ‘generally accepted that the NHS is facing severe financial pressures’.

‘If we look at the number of organisations who recorded a deficit in 2013/14 compared to 2012/13 there was an increase on the provider side.

‘We saw the surplus balance for commissioners come down quite markedly – it still remained enough to cover the deficit from acute, but we saw a big drawdown of about £400m from their previous year’s surplus to help them.

‘If we look into this current year, 2014/15, we’ve got more acute units forecasting a deficit – both across foundation trusts and NHS trusts. So we are definitely going to have a provider side net deficit, and we are seeing reduced forecast surpluses again on the commissioner side, having drawn down some of their brought-forward surpluses and savings.’

Based on projections before the announcement of further funding, this could lead to a total deficit in the NHS the following year, he said.

‘I think we’re starting to realise that, if we don’t see some additional funding coming into the NHS or without some kind of radical reconfiguration immediately after the election, then we’re facing the potential for the first net deficit across the NHS in a number of years when we get into 2015/16.’

In a bid to improve financial sustainability, HFMA called for improvements to national workforce planning and training, as well as quicker progress on large transformation schemes highlighted in NHS England’s Five-Year Forward View.


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