Sustainability and financial performance of acute hospital trusts inquiry
Closed
What the inquiry looked at
“There has been significant change in the NHS since the introduction of the Health and Social Care Act 2012, and the NHS will need to continue to adapt in response to increasing patient demand, new treatments, technologies and funding constraints. The NHS Five Year Forward View highlights an estimated £22 billion gap between resources and patient needs by 2020–21. The health service must be financially stable to deliver high-quality services for patients both now and in the future. Health is an area of public spending that has been protected in recent years. However, finances have become increasingly tight. In recent years, hospital trusts have not kept their spending within budget. In February 2015, the Committee’s report, Financial sustainability of NHS bodies, concluded that the financial health of NHS bodies had worsened and that savings required across the NHS will be difficult to achieve solely by continuing with the same approach used in recent years. NHS bodies in deficit In this fourth report on financial sustainability in the NHS, the NAO show that the financial position of NHS bodies has significantly declined since the Committee’s last report on the subject. NHS bodies as a whole were in deficit for the first time in 2014–15. The deterioration in the financial performance of NHS trusts and NHS foundation trusts has been severe and worse than expected. The report takes a closer look at the two-thirds of NHS trusts and NHS foundation trusts that provide acute hospital services such as accident and emergency services, inpatient and outpatient services, and in some cases specialist or community care. The report shows that 60% of acute hospital trusts had a deficit in 2014–15; a significant number are in serious financial distress; and many are struggling to make savings to improve their financial position. The report also examines the factors affecting the financial sustainability of trusts. It considers the approaches taken by the Department, NHS England, Monitor and the NHS Trusts Development Authority to support trusts to achieve financial sustainability.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
The financial health of NHS trusts and NHS foundation trusts has significantly worsened in the last three financial years. Trusts had a net deficit of £843 million in 2014–15, which is a severe decline from trusts’ £91 million deficit in 2013–14, and £592 million surplus in 2012–13. Trusts’ finances look set to deteriorate further—halfway through 2015–16 three quarters of trusts had a deficit, and their total overspend could rise to around £2.5 billion. The Department of Health, NHS England and NHS Improvement have not taken action soon enough to keep trusts in financial balance. The target for trusts to make 4% efficiency savings across the board is unrealistic and better data is needed for more informed savings and efficiency targets. Failings in the system for paying providers need to be addressed as a matter of urgency, with NHS Improvement and NHS England acknowledging that the current system is not fit-for-purpose as it does not incentivise the right behaviours needed for joined-up healthcare services. Spending on agency staff has contributed to trusts’ financial distress, and action to tackle this problem is welcome, albeit late. The NHS will not solve the problem of reliance on agency staff until it solves its wider workforce planning issues. We recognise the immense challenge of achieving financial and service sustainability when demand is rising and budgets are tight, and acknowledge the ongoing efforts of NHS England and NHS Improvement to find solutions. But there is much to do to produce the convincing plan necessary for the NHS to get itself back into financial balance.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 4 January 2016 to 10 October 2016.
- Oral evidence 18 Jan 2016
- Report 15 Mar 2016
- Correspondence 10 Oct 2016
What it recommended
The committee's recommendations are not listed here yet. Read them in 30th Report - Sustainability and financial performance of acute hospital trusts ↗ on parliament.uk.
Evidence
Oral evidence sessions 1
- 18 Jan 2016No witnesses recordedparliament.uk ↗