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Foundation trusts’ deficit rises to £321 million

Deficit is five times higher than expected, says Monitor

Adrian O'Dowd

Monday, 23 February 2015

The combined deficit of England’s NHS foundation trusts has now reached £321million – five times higher than planned, according to new figures from health sector regulator Monitor.

In total, 78 foundation trusts – more than half – are now in deficit, of which 60 are acute trusts, shows the newly published report* to Monitor’s board on the quarterly performance of the foundation trust sector from October to the end of December 2014.

A major reason for this rise is spending on agency staff, but Monitor said that foundation trusts – which now make up nearly two-thirds of all NHS trusts – were working hard to provide patients with quality care despite operating under “sustained operational and financial pressures”.

The deficit rose from £254million in the previous quarter (July to September) and from £167million in the three months prior to that (April to June), the report shows.

Foundation trusts spent £419million more on staff than planned because of high use of contract and agency staff, said the authors, and made £810million worth of cost savings, which is £210million less than planned.

Monitor said its analysis showed that foundation trusts saw 2.7 million people in their A&E units between October and December of last year, which was 8% higher than the same period last year.

Subsequently, hospitals admitted 570,000 people for further treatment – an extra 40,000 patients compared to last year – while foundation trusts also treated more than 2.3 million non-emergency patients in the quarter, an increase of 7% over the same period last year.

This growing demand was leading to a costly combination for trusts of the ongoing need to make cost savings and to use expensive agency staff.

The sector as a whole failed to meet national waiting time targets for A&E, routine and cancer care for three successive quarters.

David Bennett, Monitor’s chief executive, said: “Trusts are working harder than ever to overcome the challenges they face while still meeting patients’ expectations for quality care.

“However, the NHS needs to move rapidly towards more joined-up, efficient models of care if it is to deal with this continuing growth in demand for services.”

Commenting on the quarterly report, Richard Murray, director of policy at think tank The King’s Fund said: “The mounting deficits make an NHS overspend this financial year more likely, meaning that the extra funds that the government made available to the health service for the next financial year may be needed to pay off this year’s deficit.

“If a solution is not found to these mounting financial difficulties, then patients will bear the cost as staff numbers are cut, waiting times rise and quality of care deteriorates.”

Fellow think tank The Health Foundation said that combined with the latest information from the TDA (Trust Development Authority) for NHS trusts, the total deficit for all providers was now more than £700m.

Adam Roberts, senior economics fellow at The Health Foundation, said: “Today's figures from Monitor act as a reminder that financial deficit is now the norm for NHS providers.”

* Performance of the foundation trust sector 9 months ended 31 December 2014. Monitor, February 2015

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