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NHS faces greatest challenges in recent history

'If last year was most difficult for some time, this year promises to be much worse,' says King’s Fund

Louise Prime

Thursday, 23 April 2015

The NHS is facing its biggest challenges in recent history as it enters the new financial year, The King’s Fund warned this morning. At the launch of its latest regular quarterly report How is the NHS performing?, the charity’s director of policy said the “alarming deterioration” in NHS finances looks set to continue, and that there is “considerable scepticism” regarding the achievability of the £22bn target for productivity improvements outlined in the NHS Five Year Forward View.

The health charity said this morning that the NHS enters 2015-16 with mounting deficits, worsening performance and declining staff morale. It found that despite nearly £900m being provided by the Treasury or switched from capital budgets to plug the "growing black hole in NHS finances", it now appears inevitable that hospitals and other NHS providers in England overspent their 2014-15 budgets by more than £800m; its survey revealed that nearly 60% of trust finance directors said they were dependent on additional financial support or had drawn down their reserves in 2014-15.

The health charity warned of an "even gloomier" outlook for 2015-16, as two-thirds of hospitals admitted they were concerned about staying in budget this coming year. Even among commissioners, who were more optimistic, 40% of financial leads said they were concerned about being able to balance their books for 2015-16.

This quarter’s survey of NHS provider finance directors and CCG finance leads revealed that:

  • for the third consecutive quarter, staff morale tops trust finance directors’ lists of concerns
  • fewer than half (45%) of trusts feel confident that they will achieve the productivity targets for 2015-16
  • 90% of trust financial directors and 85% of commissioners are concerned about the financial state of their local health economies
  • there is a mismatch in expectations about demand for services between providers and commissioners; for example, 80% of trusts expect emergency admissions to rise this year, while 60% of CCGs expect them to fall
  • about three-quarters (75%) of trusts and two-thirds (68%) of CCGs think there is a high or very high risk of failing to achieve the productivity gains over the next five years outlined by the NHS five year forward view.

The King’s Fund also reported that key performance targets continue to be missed "with increasing regularity". Performance against target waiting times for A&E is at its worst level since 2003, with 8.2% waiting longer than four hours in A&E departments in the final quarter of 2014-15; the number of delayed transfers of care has risen by over 20% compared with the same quarter last year, and is now at its highest level since 2008; and in February 2015 the proportion of inpatients waiting longer than 18 weeks for treatment rose to 13%, the highest level since this target was introduced. However, the number of people still waiting for treatment after 18 weeks dropped, which the charity said suggested that the policy of allowing a ‘managed breach’ of the targets is having an impact.

Director of policy at The King’s Fund Richard Murray warned: “The health service enters the new financial year facing some of the biggest financial and performance challenges in its recent history. If last year was the most difficult for some time, this year promises to be much worse, with little confidence that the alarming deterioration in NHS finances can be arrested.”

He added: “Looking further ahead, while there is still significant scope to improve productivity in the NHS, efficiencies are becoming harder to generate and there is considerable scepticism that the £22bn in productivity improvements outlined in the NHS Five Year Forward View can be achieved.”

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