King’s Fund: sustainability and transformation threatened

03 November 2017 Seamus Ward

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Publishing its latest Quarterly monitoring report, which draws together the latest performance statistics with a survey of finance directors, the fund said services were over-stretched and patients were waiting longer for care. This was partly due to a relaxation of the 18-week referral to treatment standard, which aimed to allow the service to focus on A&E performance and preparations for the winter, as well as reducing the pressure on clinical commissioning group finances.siva.anandaciva ls

However, the September target of 90% of patients seen in A&E within four hours was missed, while finance directors were gloomy about the financial position of their organisations.

More than 40% of trust finance directors told the fund that their organisation would end 2017/18 in deficit, while 16% of CCG chief finance officers predicted they would overspend their budgets. While some trusts could record a year-end deficit and still meet their financial control total, only 45% of trust finance directors were confident of achieving their control total. Among acute trust finance directors confidence was lower, with only 21% saying they would meet their control total.

Cost savings plans concerned trust finance directors, with only 28% believing they would meet their target for the year. Many directors said they were using one-off measures, such as land sales and recruitment freezes, to bridge the gap.

Some trust finance directors told the fund they had to take short-term measures to ensure their cash position was sound – delaying payment of suppliers or getting interim support in the form of Department of Health loans, for example. More than half of those receiving interim financial support were very concerned about their ability to repay the loan – 19% were confident of their ability to repay. One finance director said their trust’s loan would never be repaid.

CCGs were showing increasing signs of financial strain, with several saying their year-end financial position depended on access to the 0.5% of income set aside at the beginning of the year to help support the overall NHS financial outturn. CCGs were considering a range of ‘unpalatable options’ to rein in spending, including cutting out low value treatments, restricting access to surgery for smokers or patients with a high body mass index and reducing the availability of IVF.

Though directors were concerned about finances, they were more worried about the morale of staff and recruitment and retention of nurses, the King's Fund said. While 65% said they were planning to increase the number of permanent nursing staff in the next six months, they were realistic about the prospects of filling those posts. The report said this was due to the impact of the EU referendum and changing language requirements as well as deeper, more widespread issues, such as morale, pay restraint and shortage of qualified staff.

The report said: ‘Sustainability and transformation have been the two watchwords for the NHS in recent years, but as financial, operational and workforce pressures increase, it seems that we are at increasing risk of achieving neither.’

Siva Anandaciva (pictured), the fund’s chief analyst, added that half of NHS trust finance directors think patient care in their area has been getting worse. ‘[This] is sobering and shows that the NHS funding pressures are now having a real impact on the people using its services.  

‘This is happening despite the herculean efforts of staff and NHS leaders working to maintain standards of care under huge pressure.’ 

He continued: ‘This should be a warning for the chancellor as he prepares the Budget. Funding growth for the NHS is planned to slow to a near halt next year, so without additional funding waiting times for hospital treatment will get longer and the deterioration in patient care is set to continue.’