NHS trusts told to review spending in light of “unaffordable” plans

4 Aug 15

NHS trusts have been warned that their spending plans are “unaffordable” and urged to do more to reassert financial control.

A letter to foundation trust chairs and chief executives from Monitor chief David Bennett said reviews of the spending planned by the 46 foundation trusts with the biggest deficits would not be enough to close the overall funding gap.

“We need all providers – even those planning for a surplus this year – to look again at their plans to see what more can be done.”

He urged foundations to discuss planned management consultant spending with Monitor and said vacancies should only be filled where essential.

A parallel letter to non-foundations from NHS Trust Development Authority chief executive Bob Alexander struck a similar tone.

“Current plans suggest the service is heading for a substantial overall deficit, of which NHS trusts contribute about a half. As I have said elsewhere, this is unaffordable,” he wrote.

“As a service we must respond to the challenges and take collective and individual actions to drive financial improvement in the short and medium term.

“On this basis I expect all providers to work to a stretch target in 2015/16, based on delivering additional actions above the current plan with the clear intention of improving the individual financial position of each NHS trust.”

Alexander urged trusts to review priorities in all areas including revenue maximisation, cost control, efficiency and investments in order to develop a “realistic and deliverable” plan.

On the commissioning side, NHS England has also ordered clinical commissioning groups to suspend all fines and penalties relating to Referral to Treatment Standards, resolve contract disputes as quickly as possible and be transparent with NHS and the Department of Health about any uncommitted reserves.

Both the Monitor and TDA letters requested that trusts’ plans and costings be returned to Monitor and the TDA by 21 August.

NHS Providers, which represents foundations and trusts, said they were “stretching every sinew” to close the NHS’ 2015/16 budget gap but needed help from the wider health service.

“Our members tell us they are already taking significant action to reduce spend on temporary staffing and will continue to play their part in delivering efficiencies for the NHS, building on the unprecedented savings they have delivered over the last five years.

“But there is widespread recognition, including from government ministers, that if providers are to realise significant further efficiencies, we need a different approach and that this will take time and investment to deliver.”

Mark Knight, chief executive of the Healthcare Financial Management Association, said: “It is imperative for providers and commissioners to come together and support each other in finding ways to address the financial challenges in the current year and into next year and beyond.

“HFMA welcomes NHS England’s proposal to suspend all fines and penalties linked to admitted and non-admitted elective waiting targets, as a further step towards health communities working together to and develop sustainable solutions for the long term.”

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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