NAO: NHS must tackle demand

These were three recommendations from its report, NHS financial sustainability, which in part looked at the financial and operational performance in 2017/18. It noted that activity increased but waiting times continued to slip and performance against the A&E four-hour target fell to 88%. It would cost an extra £700m to reduce elective waiting lists to March 2018 levels, the NAO said.

The body highlighted large deficits in some parts of the system. Trusts and commissioners reported a combined deficit of £21m. But within this, providers collectively reported a deficit of £991m and clinical commissioning groups overspent by £213m – all offset by an NHS England underspend of £1,183m.

There is also significant variation in financial performance, with 100 out of 232 trusts in deficit and 10 trusts accounting for 69% of the net total provider deficit.

The watchdog said the operational and financial performance for the year ‘does not add up to a picture we can describe as sustainable’.

It acknowledged the new financial settlement for the service and January’s NHS long-term plan aimed to address the current pressures. It described the developments as ‘positive’ and the planning approach as ‘prudent’. But it reserved judgement on whether the funding package could deliver the plan’s ambitions until other elements of health spending were announced – covering Public Health England, capital budgets and clinical training funding – as well as social care funding plans.

‘That money needs to be spent wisely and needs to address many of the challenges we identify in our report,’ said NAO director of health value-for-money audit Robert White.

The report called on national bodies to test the realism of local plans to manage demand – had local bodies identified all their local drivers? Did they have capacity to meet demand? The payment system also needed to be simpler, have lower transaction costs and promote greater collaboration and management of demand.

NHS England and NHS Improvement should ‘set out a medium-term strategy for redesigning tariffs’, it said. The current review of capital should also examine how accessing capital can be simplified for all bodies, regardless of financial or statutory basis. It asked whether consideration should be given to restructuring balance sheets of trusts in severe financial trouble with loans unlikely to be repaid.