Briefing / NHS financial temperature check – briefing July 2017

This is the seventh in the HFMA’s series of briefings setting out finance directors’ views on the financial issues facing the NHS in England. The briefing draws on the responses of 73 finance directors of trusts and foundation trusts and chief finance officers of 100 clinical commissioning groups (CCGs).

The NHS financial temperature check provides a national picture of finance directors’ views of the financial outlook and the challenges NHS finance staff are facing.

The financial performance of the NHS in England remains under significant financial pressure. Trusts reported a combined deficit of £791m in 2016/17, after receiving additional funds of £1.8bn from the sustainability and transformation fund (STF).

The performance of CCGs, based on month 11 forecasts, looks better than that of trusts with a forecast in-year underspend of £250m, but this is after the release of the £800m risk reserve to CCGs’ bottom line. CCGs and NHS England commissioning teams were required to leave 1% of their allocation (the £800m) uncommitted in their plans, and so CCGs were forecasting a £550m overspend against plan at month 11.

CCG and trust savings plans are the highest they have been in recent years as a percentage of income, and finance directors continue to think there is significant financial risk attributable to their financial plans. Some 94% of CCG and 95% of trust finance directors state that there is a medium or high risk of non-achievement of their financial plans.

Access to capital remains a challenge in the system, with almost all finance directors of the view that there is insufficient capital in their sustainability and transformation partnerships (STPs) to carry out their transformation plans.