News / Providers ​end year with £791m deficit

15 June 2017

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Speaking at the NHS Confederation conference in Liverpool, Mr Mackey (pictured) said that, though some consolidation of figures was still being carried out, the NHS in England broke even in 2016/17. Image removed.

He told the confederation conference that the provider deficit stood at £735m pre-audit, but two providers chose to defer transactions into the 2017/18 financial year, giving a final figure of £791m. At quarter three the aggregate deficit was £873m.

‘This is a fantastic achievement, given where people were at the end of Q3 particularly and the pressures they faced,’ he said.

While nine in 10 providers earned sustainability and transformation funding, almost three-quarters met or exceeded their control total.

He added that providers delivered a cost reduction that would be impossible in virtually any other health system in the world. One of the chief areas was in agency spending, where £700m was saved. Mr Mackey said the measures to limit spending on agency staff had disrupted the market, but there was still a lot to do particularly in the hiring of medical locums.

He said concern remained about workforce, recruitment and retention and morale, while bed occupancy was ‘too high to be healthy’.

In 2017/18, providers are planning a £496m deficit. He said: ‘A small number of providers contribute massively to that. There’s been a significant increase in the number of providers in surplus at a plan level in 2017/18. That’s a fantastic improvement, but across the sector there are some very stubborn large problems in a small number of providers and about 30 providers who haven’t yet agreed plans and control totals.’

He had been assured capital would be made available, but the NHS needed to make an effective prioritised case for capital spending. Providers were planning on £4.3bn of capital spend, while the current Department of Health budget stood at £2.9bn.

NHS Improvement was looking to introduce earned autonomy for systems and institutions, but he insisted this was not a return to the old foundation trust regime.

Mr Mackey also revealed that, with NHS England, NHS Improvement will publish the details of the 2017/18 financial plans shortly. ‘There has been some concerns about this being another reset. It won’t be another reset but an articulation of the plans, where we are and what needs to happen next.’

There will be more detail on the next steps on the forward view and ‘a big push on operational productivity’. While NHS Improvement would not loosen its grip on financial control, quality improvement would come more to the fore in its work.