News / PCTs and SHAs leave £1.4bn surplus to successor bodies

By Seamus Ward

THE NHS IN England is on course to deliver a surplus of more than £1.4bn in 2012/13, according to final board reports posted by the (now disbanded) strategic health authority clusters.

The projected overall surplus for primary care trusts and strategic health authorities has been creeping up over the course of the year. It went from £1.2bn at quarter two to £1.4bn at quarter three and this was maintained in month 10.

The month nine figures, published by the Department of Health in The Quarter at the end of March, showed one PCT – North Yorkshire and York – and six NHS trusts forecasting a year-end deficit of £12m and £149m respectively. At month 10, North Yorkshire and York continued to forecast a £12m deficit, but this was a £7m improvement on its Q2 forecast.

Three of the trusts in deficit at Q2 reduced the gap between income and expenditure. This was offset to some extent by University Hospital of North Staffordshire NHS Trust forecasting a deficit (£4m) for the first time at Q3.

In addition, SHA board papers for March showed a number of trusts experiencing in-year financial difficulties, while still predicting they would at least break even over the year. Many of the problems were caused by emergency activity running ahead of planned levels.

Anecdotally, finance directors have said accident and emergency departments are under severe strain in many parts of the country.

The Royal College of Nursing highlighted increasing pressure on A&E at its annual conference in April. It said hospitals were forced to move patients regularly to free up beds as more and more patents were admitted via A&E.

The Quarter said emergency activity had increased. At the end of Q3, non-elective admissions were 3% higher over the nine months since the start of the financial year, while attendances at all types of A&E department were 2% higher. Elective activity also grew – GP referrals 3.7% up, first outpatient attendances 2.4% up. Admissions had grown by 2.2%.

The then NHS deputy chief executive David Flory, who is now NHS Trust Development Authority chief executive, said: ‘The data is largely in line with the seasonal pattern seen in previous years, and it is too soon to say whether there has been a change in the underlying trend. The Department is monitoring activity closely.’

The need to generate additional capacity quickly has led to a reliance on (more expensive) agency staff. In West Midlands and East, some commissioners agreed additional funding for 2012/13 to help providers cover these additional costs.

By month nine, the NHS had delivered almost three quarters of planned efficiency savings for 2012/13. The service generated £1.2bn of QIPP (quality, innovation, productivity and prevention) savings in Q3 and in total it had delivered £3.7bn by month nine – 72% of the forecast 2012/13 aggregate of £5.1bn.

The NHS in the North of England area had delivered more than £1.1bn of QIPP savings by month 10. This was 82% of the full-year plan and the board paper said it was on course to deliver the final sum of almost £1.35bn. Of the final sum, £1.15bn will be cash-releasing savings, while almost £194m will be from cost avoidance.

Mr Flory was encouraged by the progress across England. ‘Taken alongside the £5.8bn QIPP savings for 2011/12, the total QIPP savings to date represent encouraging progress as we approach the halfway stage of the four-year QIPP challenge,’ he said. ‘This provides a solid platform for the new system to take forward into 2013/14.’