Funding black holes

Curbing the use of agency nurses

New figures for the UK’s key National Health Service (NHS) Trusts have revealed their total deficit of more than €1.1 billion for the year 2014-15. This rise on the previous year’s deficit of €160m comes against a backdrop of health authorities being required to find ‘efficiency savings’ of almost €1.4bn over the last five years. The NHS was also a major issue in the recent UK general election, which saw David Cameron’s Conservative Party win an outright majority following the previous coalition administration with the Liberal-Democrat party.

Report: Mark Nicholls

Mark Porter MD, BMA council chairman.
Mark Porter MD, BMA council chairman.
Source: Mark Porter MD

Figures from health regulator Monitor show that Foundation Trusts (FTs) – which run hospitals, ambulance and mental health services and are not controlled by central government – have a deficit of €500m, compared to the planned deficit of €14m – while other trusts were €665m in the red and it fears those amounts could become even worse. The Department of Health believes trusts need to become better at balancing the books, and said the government had already invested around €11.3bn in the future of the NHS. However, health managers say staffing issues were a key factor, with trusts spending over €2.5 on contract and agency staff - more than double the amount planned.

Monitor, which assesses NHS Trusts before they can become FTs, expressed concern at ‘over-reliance’ on agency staff. The firm’s report found that, of the 152 FTs (around two-thirds of trusts in England), half ended the year in deficit, with 70% of them acute trusts. In addition, the waiting list for operations at FTs grew by 8.3% to nearly 1.8 million.

Dr David Bennett, Monitor’s chief executive, observed: ‘The last financial year was exceptionally challenging for the Foundation Trust sector, and it’s clear the current one is following the same pattern… The sector can no longer afford to operate on a business as usual basis, and we all need to redouble our efforts to deliver substantial efficiency gains in order to ensure patients get the services they need.’ Whilst that could lead to changes at some hospitals, Monitor believes this can be carried out ‘without compromising patient care’.

Amongst concerned reaction to the deficit from analysts and organisations across the health sector, Richard Murray, director of policy at The King’s Fund think tank, said the fact that deficits had occurred despite extra money being provided by the government was disappointing. ‘Plugging the growing black hole in NHS finances must now be an urgent priority for the government,’ he added.

NHS Providers’ CEO Chris Hopson said: ‘Despite providers’ best efforts, accident and emergency, referral to treatment, diagnostic wait and a range of other targets have also been missed, representing a rapid and widespread deterioration in NHS performance and finances.’

BMA council chair Dr Mark Porter expressed extreme concern regarding the extent of the dire financial pressure many hospitals are under. ‘The prices paid to hospitals for work done are being cut year on year to drive “efficiency savings”, but the effect is that hospitals are being pushed into deficit. This is no way to run a health service …’ On behalf of the BMA, he added: ‘We call on government to move away from the current approach to one of investment in health.’

Rob Webster, CEO of the NHS Confederation (representing some 500 organisations that commission and provide NHS services) said the report provided a clear indication of the pressures faced by the NHS but welcomed the Prime Minister’s commitment to find at least €11bn extra investment in the NHS by 2019-20 following the debate around the health service during the general election.

However, he stressed: ‘We now need to change the way care is delivered in many parts of the NHS, with new models of care, backed by strong support from national bodies and politicians. This looks within our grasp if we align behind the Five Year Forward View, secure sufficient funding and back the NHS to deliver.’


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