News / Acute sector trusts' finances remain cause for concern

By Seamus Ward

The financial performance of some acute NHS trusts continues to provide significant cause for concern, with the whole non-foundation trust sector forecasting an aggregate deficit of £250m at year end.

In his report to the NHS Trust Development Authority (TDA) January board meeting, chief executive David Flory said operational performance so far this winter had been good. He added: ‘While maintaining and improving quality remains a major focus for NHS trusts, the financial performance of the sector continues to provide significant cause for concern.’ 

A more detailed board paper on the financial position of non-foundation trusts at 30 November said 33 of 102 trusts (including two trusts that became foundations and one dissolved in year) were forecasting a combined deficit of £458m at year end.

This compared with 69 trusts predicting an aggregate surplus of almost £208m, giving a net forecast deficit of £250m. The sector had planned for an aggregate deficit of £76m, an adverse variance of £174m. Much of the pressure was in urgent and emergency care.

In addition to the 25 trusts planning for a deficit, most of which were acute trusts, eight had unplanned deficits. Two had become foundations trusts since the start of the financial year, leaving six NHS trusts (all acute or integrated acute and community trusts) with unplanned deficits. The year-to-date position of the whole trust sector was a total deficit of £211m – £191m more than planned.

In contrast, the performance of community, mental health and ambulance trusts was solid, forecasting an aggregate surplus for the year of £84m, compared with a plan of £91m.

The TDA report on the operational and financial position was reinforced by the King’s Fund quarterly monitoring report. The survey of finance directors reported the service was doing well on non-financial indicators, such as A&E waiting times. However, more than a fifth (22%) of trusts and foundation trusts predicted a year-end deficit.

The fund said the proportion of trusts predicting a deficit was an increase on previous quarters and demonstrated the rising pressure on trusts. The survey suggested the NHS would struggle to deliver £20bn in efficiency savings by 2015, with only 47% of finance directors expecting to meet productivity targets in the current financial year.

Fund chief economist John Appleby said: 'Despite warnings about a potential crisis in A&E, most hospitals are coping with winter pressures so far – a tribute to the hard work of staff in A&E departments.

‘However, the growing number of hospitals set to overspend their budgets shows that for some, it is no longer possible both to maintain the quality of services and balance their books.’

He also highlighted fears over staff morale. ‘The emerging concerns about staff morale in hospitals are very worrying as there is a proven relationship between staff satisfaction and the quality of care provided to patients.'

Commissioning finance directors surveyed by the fund were more optimistic, even though 13% forecast their clinical commissioning group would record a deficit for 2013/14. ? ?

This optimism was reflected in month eight figures from NHS England, which showed clinical commissioning groups forecasting an aggregate surplus of £688m – £154m more than planned and £20m more than at month seven. Twenty-four CCGs predicted a year-end deficit, one less than a month earlier.

But overspending in specialised commissioning continued – by £225m (3.1%) over the year-to-date. NHS England said unaffordable activity growth remained the key driver for specialised commissioning spending.