Financial problems ‘now endemic’ in NHS England, says King’s Fund
Patients in England face poorer NHS and social care, including longer waiting times, because of the financial “black hole” that looms over hospitals and other services, says a leading thinktank.
The King’s Fund warns that already unprecedented deficits reported by trusts for the last financial year will be much worse in future unless the government stumps up more cash or the Department of Health allows the NHS to overspend its £116.4bn budget for 2015-16.
Its latest survey of financial directors suggests nearly nine in 10 acute hospital trusts are forecasting deficits, up from just over a fifth this time last year, and two-thirds of all trusts predict being in that position, up from a quarter.
“Financial problems are now endemic among NHS providers, with even the most prestigious and well-run hospitals forecasting deficits,” the fund’s pre-budget briefing says.
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“Ministers should make sure most of the extra £8bn extra spending promised by 2020 should be available well before then. The promised increases take no account of the government’s pledge to introduce a seven-day NHS nor allows for the hiring of new staff. As significantly, local authorities’ social care budgets, which saw real-term cuts of 8.7% over the five years of the last government, remains unprotected.
“Publicly funded social care is at risk of becoming a residual service, available only to those with the lowest incomes and the highest needs, leaving thousands of people and their families struggling to meet the costs of the care and support they need,” the briefing says.
“This also risks exacerbating pressures on the NHS by increasing emergency admissions and delayed discharges from hospital.” Citing councils’ warnings of a potential £4bn funding gap by 2020-21, additional funding for social care is an urgent priority.
“If the chancellor does not announce extra funding in the budget, the government must face the consequences or the Department of Health will overspend its budget this year. Further, cuts in access to social care are also inevitable.”
The “hugely ambitious” £22bn in NHS savings planned require much greater efficiency gains than the health service has been able to achieve in the past, according to the fund.
Although there is scope to improve NHS productivity, initiatives to reduce funding on agency staff and increase financial control will not be enough to solve trusts’ financial problems, it says.
The stark predictions from a widely respected thinktank follow Labour’s pre-election warnings that the overall NHS deficit could top £2bn this financial year, forcing swingeing cuts.
These were based on a leaked paper by NHS Providers, an association of health service trusts.
Meanwhile, the latest edition of the regular opinion survey on the NHS commissioned by the government from Ipsos Mori, published on Wednesday, suggested that 85% of people agreed last winter that the service would face severe funding problems in the future.
It also reported a decline in the proportion of people thinking that their local authority provided good social care, down to 38% from 43% in spring 2013.
Equally, worryingly for ministers, the proportion of people preparing financially to pay for social care when they are older remains low. Just over a quarter had done so, while about seven in 10 had made little or no preparation.
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Responding to the King’s Fund warnings, the Department for Health said: “We know that the environment is tough, but the NHS must deliver its side of the plan. Hospitals must now put in place the sort of cost-control measures that the government has highlighted over the last few weeks, like clamping down on rip-off staffing agencies and expensive management consultants.”
Looking at hospital budgets alone did not give the public an accurate picture of NHS finances, the department said. In the last financial year trusts had posted budget deficits of £821.6m, but commissioners provided a surplus of £845m.
It pointed to another survey of NHS finance directors, undertaken by the Healthcare Financial Management Association (HFMA), which found that eight out of 10 health commissioners were forecasting a surplus at the end of this financial year.
The department failed to note however that the overall message from the HFMA was also bleak, forecasting further deterioration in NHS finances.