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NHS finances will worsen next year, finance directors predict

Just one in eight hospitals and one in four CCGs expect to hit their financial targets next year

Ingrid Torjesen

Tuesday, 24 June 2014

Financial pressure on the NHS is likely to worsen next year with fewer hospitals and clinical commissioning groups expecting to meet their financial targets, the Healthcare Financial Management Association has found.

The Association’s NHS Financial Temperature Check report released today shows that the number of organisations overspending or reporting a deficit was 18% (an additional 85 NHS organisations) at the end of 2013/14 than at the end of the previous financial year. Worryingly, more than 30 of these organisations had not entered 2013/14 expecting to be in deficit at the end of it.

Overall, in the last financial year, clinical commissioning groups and provider trusts delivered planned financial savings of 2.3% and 4.5% respectively, but this fell short of the planned savings (2.5% and 4.8% respectively).

The Healthcare Financial Management Association also surveyed 188 finance directors of NHS organisations to gauge their views of the financial health of their organisations and its likely impact on services.

The survey found that just 36% of 129 hospital finance directors were quite or very confident that their trust will achieve its financial targets this financial year (2014-15), while 20% were not very or not confident at all, and 44% said it was too early to say.

Finance directors at clinical commissioning groups were more positive, with more than half (54%) being quite or very confident of meeting targets, 21% were either not very or not at all confident, and 25% said it was too early to say.

However, the expectation for next year was not so rosy. Just 12% of provider trusts and 25% of CCGs feel quite or very confident that their financial targets will be achieved in 2015-16. Cost pressures cited by both groups include growing demand for care, pressure on A&E units and the need to hire more nurses to ensure high standards of treatment.

Even though there is growing pressure on funding, finance managers do not expect quality of care to deteriorate as a result. The survey found that just over half (53%) expect care quality to be maintained over the next few years, while more than one-third (39%) predict improvements in service quality.

Paul Briddock, director of policy at the Healthcare Financial Management Association, said: “Resources are being stretched and although many NHS organisations have just got by, we have seen an increasing number of them report a deficit last year. We are seeing financial problems materialise in organisations that have previously been financially stable. If all things stay equal, the financial outlook looks increasingly challenging, but despite this, it is encouraging to see that finance directors do not see quality deteriorating – in fact, many think quality will improve.

“However, it is clear that the future success of the NHS depends on the clinically led transformation of services, with support from managers and finance staff. Finance directors are clear that this transformation needs to happen faster than at present and we all need to work together to make this happen effectively.”

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