Trust finance plans more realistic

Drawing on a survey in February, the representative body said that trusts were more confident about their finances than at the same point last year. Only 13% said they would not be able to sign up to their control total and a further 28% were unsure. This compares with 18% and 29% at the same stage last year.

The report said that more recent feedback suggests that nearly all trusts will now agree their 2019/20 control totals – last year 201 out of the 227 trusts agreed control totals.

Providers have also reported an improvement in the level of savings required this year. A more realistic 3.6% – according to the survey responses – compares with the 5% indicated as needed in 2018/19. NHS Providers said there was also a ‘welcome significant increase’ in the number of trusts with cost improvement programme levels below 3%.

However, it added that there are a significant number of trusts reporting higher levels of required CIPs. Some 12% of survey respondents had CIP requirements in excess of 6%, with 8% being the highest reported. And while the average CIP of 3.6% is in line with the 2018/19 third quarter forecast for the year, NHS Providers pointed out that a third of these savings were non-recurrent, which was not sustainable.

It said there was a need to understand why some trusts faced such high efficiency challenges. ‘NHS Improvement is arguing that this is due to trusts failing to deliver sufficient level of 2018/19 savings negatively affecting 2018/19 budgets,’ it said. ‘The trusts concerned have a different view – that they are being adversely affected by the aggregate impact of some of the micro level changes to the financial architecture.’

These changes include the impact of how funding for the Agenda for Change pay rise interacts with individual trust grade mix, the impact of the changes to the market forces factor and clinical commissioning group allocations, and the changes to specialist tariffs.

The report also highlighted that community trusts funded by local authorities have not been funded to meet the costs of the required Agenda for Change pay rises for staff delivering public health services.

‘Looking at the wider context of public sector spending, the additional funding allocated to the NHS is generous and will help to improve the financial position of the NHS and the provider sector,’ said NHS Providers chief executive Chris Hopson said. ‘Our members are feeling more positive than in previous years about their finances and are doing all they can to successfully deliver their control totals.

‘But finances do remain very tight. No-one should pretend that the 2019/20 financial task will be easy to deliver and there are some important issues that national system leaders will need to address to ensure appropriate delivery of the required financial improvement.’