News / Directors downbeat on new year prospects

By Seamus Ward

NHS finance directors are confident of delivering on their financial targets this year, but more pessimistic about their wider local health economies over the next 12 months, according to a King’s Fund survey.

In the fund’s quarterly monitoring report, most finance directors said their organisations would break even or record a surplus in 2012/13. More than three-quarters (39) of the 48 directors surveyed expected to end the financial year in surplus, with only three anticipating a deficit.

While 34 were confident of achieving their cost improvement programme targets for 2012/13, nine expressed concern. But when asked how they felt in general about the financial state of their local health economy over the next 12 months – not just their own organisation –  about two thirds (32) were pessimistic.

Fund chief economist John Appleby said the two-year pay freeze had helped finance directors keep costs down and find £5bn in productivity improvements each year. But the freeze ends at the close of this financial year. Pay rises in 2013/14 will be capped at 1% but on top of this new spending pressure, trusts will have to contend with a 1.1% drop in tariff.

While most finance directors believed the quality of patient care had improved (6) or not changed (26) over the last year, around a third (16) felt it had got worse.

Mr Appleby said that proportionately more people were waiting longer in A&E and providers were also grappling with the 18-week referral to treatment target and delayed transfers of care.

'The NHS faces unprecedented financial pressures, and there are growing worries that patient care will suffer,’ Mr Appleby said. ‘Health and care services have coped well until now, but it is clear that many organisations expect things to become much more difficult over the coming year.'

For the first time, the report also surveyed directors of adult social services – a third of these directors expect to have to cut their services over the next year. Nearly three quarters were pessimistic about the state of the local health and care economy over the next 12 months.