King’s Fund warns of continuing pressures

In its quarterly report on the NHS, which includes a survey of finance leads, the fund said 42% of trust finance directors and 39% of clinical commissioning group chief financial officers believed they would record a deficit or overspend at the end of 2018/19. The survey was taken before June’s five-year funding announcement.

The Quarterly monitoring report said almost 80% of CCGs in its sample are considering withdrawing funding from more low-value treatments to help manage their financial pressures.

King’s Fund chief analyst Siva Anandaciva (pictured) said the provider sector was initially expected to balance its books in 2017/18, but this was revised to a £496m deficit once trust financial plans were submitted. Even so, the sector ended the year with a £960m deficit after the sustainability and transformation fund (STF) was applied.

He added that the STF was contributing to a growing gulf between ‘haves’ and ‘have nots’.

‘It is clear the current NHS finance regime is broken, with huge deficits in some trusts and booming surpluses in others. The new funding settlement provides an opportunity to re-think the current system and ensure that financial management in the NHS is proportionate, fair and effective.’

NHS finance directors were increasingly concerned about staff morale, with 24% identifying it as one of their top three concerns – the highest proportion since 2013.

Finance leads were asked for their top three priorities for new investment. Trust finance directors’ priorities were social care (67%), community services (53%) and mental health services (47%). For CCG CFOs, the top priorities for new money were general practice (79%), social care (65%) and community services (65%).

Mr Anandaciva said the five-year funding settlement for the NHS provided an opportunity to move more services out of hospital, with the backing of provider and commissioner finance managers. ‘Policy-makers have long sought to provide more care in the community, closer to people’s homes, to improve patient care and reduce pressures on hospitals.

‘These attempts have, for the most part, failed, and hospitals remain full to capacity, while under-investment in community services continues. Our survey suggests that finally delivering this vision should be at the heart of the forthcoming NHS 10-year plan and that additional funding for social care must be a top priority for the forthcoming spending review.’

Finance leads were also concerned about operational pressures, with 23% of trust finance directors and only one of the 32 CCG leads surveyed confident the four-hour target will be met locally by March next year – NHS planning guidance expects the majority of trusts will be meeting the target by that time.

 Adult social care needs urgent short-term funding as well as a long-term settlement, according to the Association of Directors of Adult Social Services (ADASS). Its annual budget survey report said recent short-term funding had alleviated some pressures and made an impact on delayed transfers of care out of hospital. More than £3bn from the Better Care Fund and the social care precept on council tax had to an extent counterbalanced the £700m adult social care element of council savings needed in 2018/19. ADASS said councils faced increasing pressure from an ageing population, potential market failure through the closure of homes and the knock-on effects of NHS pressures.