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Trusts in deficit doubles in a year

Report shows huge variations in health finances

Jo Carlowe

Thursday, 20 September 2012

The number of NHS trusts and foundation trusts in deficit has increased this year, with huge financial variations seen between trusts.

NHS financial year 2011/12 published today by the Audit Commission reveals that the number of trusts in deficit increased from 13 in 2010/11 to 31 in 2011/12.

This occurred despite most NHS trusts reporting an improved financial position, and PCTs, SHAs and NHS trusts reported a combined under-spend and surplus of £1.6 billion.

Thirty two NHS trusts reported a reduced surplus compared to 2010/11 and a further seven deteriorated to the point of reporting a deficit.

The report shows stark differences in health finances around the country, with the majority of NHS trusts in deficit located in London and the south-east.

Within London there are substantial differences in the fortunes of trusts. As a region, London reported the highest surplus nationally, but it was home to the NHS trust with the highest deficit. Overall, healthcare organisations in inner London fared better financially than those in outer London.

The report also considers how PCTs have made savings and the impact on trusts' income and services. Overall, the savings programmes had no material effect on the numbers of front-line staff, although the number of managerial and administrative staff fell significantly.

But, the productivity of acute and specialist trusts does not appear to have increased and there is also little sign of services moving out of hospitals and into the community.

The reports, states that these changes are both considered key to achieving the longer term financial sustainability of the NHS.

Mike Farrar, chief executive of the NHS Confederation echoed this view.

"We recognise the position reflected in this report that shows the commissioning side having a good financial position, but an increasing number of providers are being squeezed.”

He added: “This is the time for the NHS Commissioning Board to help providers, not with bail outs, but by releasing money to new clinical commissioning groups so they can work with providers to help put them on a sustainable footing by changing the type and range of services they provide.

"Now is the time for big investment in community and primary care. We need to do this to ensure hospitals can sustain local services in the long run."

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