HFMA survey reveals divided loyalties for NHS finance chiefs implementing STPs

1 Dec 16

Finance chiefs in charge of implementing NHS sustainability and transformation plans are struggling with a “club versus country” dichotomy, according to the Healthcare Financial Management Association.

Meanwhile, 52% of trusts and 21% of clinical commissioning groups (CCGs) are forecasting a deficit in 2016/17.

These were the findings of the latest NHS Financial Temperature Check undertaken by the HFMA, which represents NHS finance directors and finance staff working in healthcare.

It draws on responses to a survey of over 200 finance directors and chief finance officers from 128 provider trusts (53%) and 72 (35%) clinical commissioning groups across England. The responses were received between 20 October to 3 November this year.

Feedback indicated that 22% of trusts and 35% of CCGs are forecasting a worse position than predicted in their financial plan for the year. The most common causes of deficits were under-achieving savings plans (61%), increased agency costs (34%) and an increase in non-pay costs (24%).

Most respondents do view the STPs as a cornerstone in plans to reduce deficits. However, an overwhelming majority also voiced concerns about the structure of the plans, with almost three-quarters (72%) concerned about their governance.

Respondents professed limited confidence in the simultaneous delivery of both STP and organisational financial objectives. Only 6% of trust finance directors and 17% of CCG finance chiefs believe they are both deliverable.

Of the finance directors that responded, 62% claimed they will prioritise organisational objectives rather than their STP objectives. On reflection, 82% believe the regulatory regime needs to change to support the delivery of the STPs, and 79% believe the financial regime needs to change too.

Moreover, only half (54%) of finance directors believe that risks associated with STPs have been recognised, and only 5% believe adequate risk management arrangements are currently in place. 

There was a degree of positive sentiment, however, around STP leadership, with 58% of finance directors seeing “clear and effective leadership in place within STPs”. Meanwhile, 46% believe relations between commissioners and providers had improved.

Commenting on the results, Paul Briddock, director of policy at the HFMA, said that the popularity of STPs had waned over time. “Although STPs were met with enthusiasm and positivity when they were introduced, there is scepticism from finance directors that the STP frameworks can work in practice.”

He added: “It is encouraging to see reported improvements in collaboration and some strong leadership in place, but when operating in a ‘club versus country’ framework, where there are conflicting priorities between individual organisations and footprint areas, the lack of clear governance is causing some angst.”

Briddock acknowledged that it was early days, but said many organisations were yet to find a balance. However, “doing this in an open and transparent manner will be key to achieving the success we need to see across the NHS”.

According to the HFMA, this latest update points to the fact that planned savings for 2016/17 are ambitious. Finance directors appear to lack confidence that their organisation can deliver the 2% to 3% annual productivity gains needed to close the expected £22bn NHS funding gap.

Moreover, the survey indicates that the control totals set by NHS Improvement are another area of contention. Almost a third (31%) of all the organisations that responded to the survey do not expect to meet their 2016/17 control total and view the risks associated with them as high.

Looking ahead to next year, only 52% of CCG finance chiefs and 41% of trust finance directors think that their organisation will sign up to proposed control totals next year.

Briddock said it was clear the current numbers didn’t add up. “Despite the NHS agreeing that initiatives such as sustainability and transformation plans provide the platform for achieving a more financially balanced NHS, further conversations and collaboration is needed,” he concluded.

Commenting on the findings, Stephen Dalton, chief executive of the NHS Confederation, said: Responding to the HFMA’s NHS Financial Temperature Check report, Stephen Dalton, Chief Executive of the NHS Confederation, said: “The survey highlights the financial impact of unprecedented demand for emergency care, and much of this is stemming from a lack of social care services in the community.”

Further support to help sustain social care would be “hugely welcomed”, he added.

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