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NHS ends financial year almost £1bn in deficit

Deficit could be around £4bn in reality, warn experts

Adrian O'Dowd

Thursday, 31 May 2018

The NHS in England has ended the financial year almost £1bn in deficit – around double what was expected at the start of the year – following what has been called “unprecedented” patient demand over winter months.

Figures released today by NHS Improvement in a performance report* show that the NHS provider sector as a whole ended 2017-18 with a combined deficit of £960m, which was £464m higher than what was anticipated by trusts at the start of the year.

Think tanks and trade unions have warned that the deficit is, in reality, worse due to short-term fixes such as the non-recurrent Sustainability and Transformation Fund and one-off efficiency savings that prevented the official figure from being higher.

NHS Improvement said that despite experiencing the worst winter in a decade, frontline NHS staff and managers had cared for more patients than ever before.

However, this surge in demand had affected the NHS’s performance in key areas, such as waiting times and its reliance on temporary workers.

Figures show that more than 5.87 million people went to A&E in January, February and March 2018 – around 220,000 more than the same period last year.

A total of 277,150 more patients were seen within four hours at A&Es in 2017-18 than in 2016-17, but performance against this standard slipped nationally – 88.4% of patients were seen within four-hours in A&E, compared to 89.1% the year before. The national target is 95%.

Higher than planned levels of A&E activity meant that hospitals had to cancel operations – at the end of March 2018, 2,647 patients were waiting more than a year for elective treatment compared to 1,513 in March 2017 – a 57% increase.

Staff vacancies were an issue and at the end of the year the sector was faced with 92,694 staff vacancies – an 8% vacancy rate. This includes 9,982 doctor vacancies and 35,794 nursing vacancies.

Nevertheless, providers ensured vacancies were filled with temporary workers, which led to £976m more being spent on NHS bank staff than planned.

The sector spent £527m (18%) less on filling shifts from expensive agencies compared to the previous year.

While the provider sector was in deficit during 2017-18, viewed as a whole the NHS was broadly in balance, said NHS Improvement, which pointed to NHS England provisionally reporting a £955m underspend for the healthcare commissioning sector in 2017-18.

Ian Dalton, chief executive of NHS Improvement, said: “Hundreds of thousands more patients have been to A&Es this year but the NHS did not buckle under the pressure.

“Despite epic challenges, NHS staff up and down the country displayed incredible resilience and saw more patients than ever before within four hours. More than two-thirds of providers ended the year on budget or better than planned.”

The think tank Nuffield Trust’s senior policy analyst Sally Gainsbury said: “There is a widening gap between what we are asking the NHS to do and what we are funding it to do.

“The reported figures published today are very much window dressing. Our analysis suggests that the true, underlying figure is much, much worse as the NHS has had to patch up its finances with a series of one-off savings and emergency extra cash.

“Today’s report reveals that the £960m reported deficit figure is arrived at after around £850m of one-off savings as well as the non-recurrent £1.8bn Sustainability and Transformation Fund. Taking these into account, along with other short-term fixes, the true underlying deficit is likely to be in the region of £4bn.”

BMA council chair Dr Chaand Nagpaul said: “Today’s figures are a stark warning about the escalating service pressures and financial crisis taking hold of the NHS.

“This reflects what doctors are saying on the ground - that there is insufficient capacity coupled with record levels of demand, resulting in a deficit worse than expected.”


*Performance of the NHS provider sector for the year ended 31 March 2018. This report has been prepared using unaudited draft accounts data. Prepared by NHS Improvement, 2018.

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