NHS trusts ‘overspent by nearly £3bn more than was reported’

31 Aug 17

NHS trusts overspent by nearly £3bn more than was reported in their accounts for 2016-17, research by the Nuffield Trust think-tank has found.

It said that after it removed temporary funding boosts and one-off savings from published accounts NHS trusts ended last year with an underlying overspend of £3.7bn, far more than the £791 million reported by NHS regulators.

The think-tank’s report The Bottom Line found providers face £2.2bn in unfunded inflation in 2017-18, some £500m higher than planned.

Taking into account targets they must anyway meet, they would have to cut operating costs by 4.3% in this financial year to meet their targets, equivalent to £3.6bn in total savings.

The Nuffield Trust said that although NHS providers have delivered large efficiencies - improving their financial position by £2.3bn last year - they have never before managed savings at this level.

Even if trusts continued to make savings at a relatively high rate, they would still have underlying deficits for the foreseeable future and remain more than £2bn in the red, in underlying terms, in 2021.

This underlying deficit could though reach £3.7bn if inflation continued to rise faster than NHS regulators anticipated.

Nuffield Trust senior policy analyst Sally Gainsbury said: “The official figures on NHS deficits don’t reflect how severe things are for hospitals in England, as the deficits reported include one-off funding boosts or savings that cannot be repeated the following year.

“Only by looking at the deficit after these have been stripped out can we see the scale of financial challenge facing the NHS– and it is eye watering.”

Gainsbury said increasing funding to wipe out these deficits and fund reform “is entirely possible and wouldn’t even increase the proportion of our country’s wealth spent on health care”.

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