Q1 report shows NHS ‘broadly on plan’

22 October 2019 Steve Brown

Login to access this content

Providers’ year-to-date deficit after three months was £840.5m – £4.3m better than the planned £844.8m. This was despite earning just £420.5m from the Provider Sustainability Fund (PSF), Financial Recovery Fund (FRF) and marginal rate emergency tariff (MRET) funding compared with a planned £442.4m.

Taking account of the corresponding increase in uncommitted PSF, FRF and MRET from a planned level of £12.8m to £34.7m, the overall provider sector position was a deficit of £805m – £26m ahead of plan.

Commissioners were overspent by nearly £40m – reporting an overspend of £87.5m compared to a plan of £48m – driven by clinical commissioning group overspending.

In total this meant providers and commissioners were reporting a combined deficit of £893m at the three-month mark - £13m worse than plan. In summary, the report said the revenue position was broadly in line with plan, with a forecast overspend due largely to technical reasons of £84m.

The Q1 report – the first to combine previously separate reports from NHS England and NHS Improvement on commissioning and provider finances respectively – has been published later than usual. In fact, NHS chief financial officer Julian Kelly (pictured) gave September’s joint board meeting an update on the month 4 position.Julian Kelly

Using those more up-to-date figures, he said that the combined position one third of the way through the year was £75m off plan against expenditure of £39.5bn, with commissioners’ finances giving more concern than providers’.

He also identified material risk of £500m to £600m, which could cause problems. ‘Different this year compared to maybe last, we have put the money out into the system, through the increase in prices and allocations and additional support through the increase in prices and allocations and additional support through the PSF and FRF,’ he said. ‘We absolutely do need systems, commissioners and providers to deliver against the plans they have agreed through the planning process.’

Providers’ pay costs were £52m over plan at Q3, with overspends on both bank staff budgets and agency staff spending ceilings. However, this was accompanied by a £73m underspend on non-pay, despite overspending on the purchase of healthcare from other providers.

Capital spending of £651m by providers was £334m – 34% – less than plan