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Trusts predicted to end year with £800m deficit

Deficit forecast despite NHS making £1.3bn of efficiency savings

Adrian O'Dowd

Friday, 20 March 2015

NHS trusts are on track to end the current financial year with a net deficit of £448m, despite making efficiency savings of around £1.3bn in 2014-15.

The new figures from the NHS Trust Development Authority (TDA) show the year’s deficit is now set to be £42.8m higher than was planned a year ago.

By taking into account the latest figures from Monitor, this means that NHS providers (NHS trusts and foundation trusts) collectively will have amassed a net deficit of more than £800m by the end of this month.

The newly published NHS Trust Service and Financial Performance Report for the period ending 31 December 2014 shows the financial performance of all NHS Trusts in England for this period and compares performance to the original operating plans submitted by NHS trusts at the start of the year.

The NHS trust sector is forecasting a net deficit of £448.4 million, compared to a planned net deficit of £405.6 million.

At the start of the financial year the planned net deficit was £424.5 million, but this was adjusted by £19 million to reflect those NHS trusts that have been authorised as foundation trusts or dissolved trusts part way through the year.

The TDA said the deficit position was the case despite the NHS trust sector forecasting that they would deliver £1.3 billion of efficiencies during 2014-15.

The key cost drivers affecting the NHS trust sector in the first nine months of 2014-15 were:

  • an unplanned growth in demand for care in a hospital setting particularly in urgent and emergency care
  • a significant increase in the use of agency and contract staff
  • failure to deliver the levels of cost improvement schemes planned at the start of the financial year.

Within the net deficit forecast of £448 million, there were currently 64 NHS trusts (65%) forecasting break-even or a surplus of a combined value of £123 million in 2014-15.

A TDA spokesperson said: “We know that some trusts are facing serious, long-standing financial challenges. There is not going to be a one-size fits all solution to this.

“Despite being on track to deliver £1.3bn of efficiencies this year, there is always more that organisations can do, especially if local partners work together across the system to tackle rising demand.

“We are working with each and every NHS trust that faces challenges to its long-term sustainability to develop a long-term plan to ensure they are able to continue to provide high quality care to patients on a sustainable basis.”

Commenting on the figures, Chris Ham, chief executive of health think tank The King’s Fund, said: “Today’s figures show another significant deterioration in NHS trust finances. When combined with Monitor’s most recent figures for foundation trusts, NHS providers are currently forecasting an end of year deficit of more than £800 million.

“It is clear the next government will inherit a health service under huge financial pressure, with deficits among hospitals and other providers likely to continue rising in 2015-16.

“While there is still scope to improve efficiency to close some of the gap, this will leave new ministers facing an unpalatable choice between increasing NHS funding to restore financial stability, or allowing patient care to deteriorate as staff are cut and waiting times rise.”

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