NHS facing ‘biggest challenge’ as finances worsen

23 Apr 15

The NHS is facing the biggest financial challenge in its recent history during 2015/16, the King’s Fund has warned, with both mounting deficits and worsening performance.

In its quarterly monitoring report, the think-tank said it now seemed certain that hospitals and other NHS providers in England overspent their budgets in 2014/15 by more than £800m – despite nearly £900m extra being provided by the Treasury or moved from capital budgets.

According to the regular survey undertaken for the report, almost 60% of finance directors at hospital trusts said they were dependent on additional financial support or had drawn down their reserves in 2014/15.

The King’s Fund concluded that the financial outlook for 2015/16 was even gloomier, with two-thirds of hospitals concerned about staying within budget over the next year.

Although commissioners were more optimistic about their finances, 40% of finance leads from clinical commissioning groups stated they were concerned whether they would be able to balance the books in 2015/16.

Overall, 90% of NHS trust financial directors and 85% of commissioners were concerned about the financial state of their local health economies.

In addition, around three-quarters (75%) of trusts and two-thirds (68%) of clinical commissioning groups believe there is a high or very high risk of failing to achieve the productivity gains outlined in the NHS Five Year Forward View, which are a high as 3% annually. Long-run efficiency gains have been around 0.8% every year, but this has increased to 1.5%-2% in recent years, according to the FYFV.

Performance is also deteriorating, the King’s Fund stated, with accident and emergency performance at its worst level since 2003 – 8.2% of patients waited longer than the four-hour target in the final quarter of 2014/15.

King’s Fund policy director Richard Murray said the monitoring report revealed ‘some of the biggest financial and performance challenges in recent history’.

He added: ‘If last year was the most difficult for some time, this year promises to be much worse, with little confidence that the alarming deterioration in NHS finances can be arrested.

‘Looking further ahead, while there is still significant scope to improve productivity in the NHS, efficiencies are becoming harder to generate and there is considerable scepticism that the £22bn in productivity improvements outlined in the NHS Five Year Forward View can be achieved.’

 

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