Call for clarity on move to financial balance

Expressing concern about the overall health of the NHS in England, the Commons Public Accounts Committee (PAC) said there were warning signs that financial health was getting worse – such as increasing loan amounts, transfers from capital budgets to revenue, the growth in waiting lists and slippage of waiting times.

While the NHS almost achieved balance in 2017/18 this masked ‘significant disparities’ in the financial performance of individual trusts and clinical commissioning groups.

Trusts and commissioners reported an aggregate deficit of £21m, but it was unclear whether funding was getting to the right parts of the system. While NHS England underspent by £1.2bn, trusts had deficits totalling £991m and CCGs £213m. There was wide variation in trust financial performance. Ten trusts accounted for 69% of trusts’ total net deficit and trusts in difficulty were given Department of Health loans totalling £3.2bn, the PAC added.

Although the NHS long-term plan said the number of deficit trusts would more than halve by 2019/20 and none would report a deficit by 2023/24, it was not clear how the furthest from break-even would be helped to achieve balance.

The committee said action must be taken to clarify the steps to financial balance in next year’s planning guidance, adding that NHS England should write to it by September to give an update on how this guidance is progressing.

PAC chair Meg Hillier (pictured) said: ‘No-one should take solace from a top-level financial picture that masks significant local disparities.

‘If the long-term plan is to be more than just an aspiration, government must engage fully with the detail and ensure necessary resources are directed to the right places.’

The committee added that staff shortages are a major barrier to NHS financial viability and the delivery of the NHS long-term plan.

The NHS would not deliver the plan without addressing staff shortages. It called on the government to outline its staffing plans by July.