PAC concern over impact of local deficits

The Commons Public Accounts Committee said the Department was focused on the national overall financial position and ensuring this was in balance. However, in 2017/18 there were significant variations in the finances of individual organisations and the committee is concerned that large deficits could pose a risk to patient care.

The Department told the committee that it intends to address regional imbalances so that all trusts and clinical commissioning groups are in financial balance. However, the Department believes this could take two to three years.

In a report, the committee said 101 of the 234 NHS providers reported a deficit in 2017/18, totalling £991m. This was largely offset by an NHS England surplus of £970m – this was achieved despite 75 of the 207 CCGs reporting an overspend (totalling £0.2bn). The committee called on the Department to outline its assessment of the impact of regional deficits on patient care by the end of January.     

The report, Department of Health and Social Care accounts, also noted continuing uncertainty around the long-term funding of social care, the funding of staff pay awards and concern about the impact of leaving the European Union. It said the lack of a clear plan on recruitment post-Brexit risked exacerbating staff shortages, while there was also a risk to patient care if medical supply lines are disrupted.

Committee chair Meg Hiller (pictured) said it was unsustainable that more than a third of CCGs reported an overspend and the committee would be examining this in more detail. She continued: ‘The Department of Health and Social Care must show far more urgency in getting to grips with regional funding imbalances and demonstrate it understands the effects these have at the frontline.

‘But there are other indicators of an under-pressure Department at risk of losing its way. The Department’s lack of clear Brexit planning could threaten the supply of medical equipment. Staff shortages could deepen. The potential consequences for patients are serious.’

The MPs added it was concerned about the decision to distribute funding for the new Agenda for Change pay awards via direct payments rather than through the tariff in 2018/19. The funding may not go to the intended providers, they said. The Department plans to distribute the funding through the tariff in 2019/20, but the committee warned this could mean more affluent areas will receive a disproportionately higher share. It asked for more detail on the allocation method to be used.

The report added that MPs were worried that winter preparations and the decision to provide additional winter funding to social care only may lead to a shortfall in NHS capacity.

NHS Providers’ deputy chief executive Saffron Cordery said the NHS was heading into its busiest period facing workforce and financial challenges.

‘Although it indicates some improvement in the financial position of the sector, this report rightly identifies the mismatch between the provider sector deficits offset against a surplus in NHS England’s budget,’ she added.

‘This is unsustainable and, as the report acknowledges, could pose a risk to patient care. We need to move away from the current financial improvement mechanisms, which have only widened the gulf between those performing well and those who need much more support.

‘The NHS long-term plan should present an opportunity to recover NHS finances. But if it is to deliver, we must also address the crisis in social care with a fully costed plan.’