Daily Insight: Cash doesn't lie

Debt mountain

The headline financial position of the provider sector may have improved dramatically last year (once the non-recurring STF was factored in), but the amount of emergency bailout cash now being paid out to trusts paint a different picture.

NHS trusts were forced to draw down £2.7bn of “interim revenue support” from the government last year – with two-thirds of hospital providers now relying on these government loans to maintain payments to staff and suppliers. The payments totalled £2bn in 2015-16 when around half of hospital trusts received support.

The figures reflect the fact that an increasing number of trusts are struggling to maintain adequate cash levels due to their recurring income and expenditure deficits. In some cases this has led to external suppliers refusing to provide services due to late payments.

They also provide a stark reminder that despite official figures suggesting an improvement to the overall finances of the NHS, much of the trust sector is still in severe financial distress.

Essentially, what seems to be happening is that trust finances in aggregate seem to be improving, but the improvement is weighted heavily to those trusts which are in surplus. Meanwhile, around 100 trusts, including around two-thirds of acutes, are being squashed under a mountain of debt.

It is of course highly doubtful that many of these trusts will ever be able to pay the loans back (some have now taken out loans worth more than 30 per cent of turnover and counting) and there will need to be some sort of mass write-off at some stage.

When asked about the prospects of repayment, most organisations have a stab at setting out their recovery plan. But the response from Wye Valley Trust was perhaps the most accurate.

Leeds! Leeds! Leeds!

The three CCGs in Leeds have agreed to start consulting with their members over a merger to become one of the country’s largest commissioners.

This is the next step in a journey which has seen Leeds West, Leeds North and Leeds South and East CCGs appoint a single chief executive and governing body in common to integrate commissioning decisions across the city.

The CCGs’ joint governing body has agreed to consult with its member practices throughout August on whether to merge the organisations.

HSJ understands the decision was made during the private part of the governing body in common meeting and a letter is being sent to more than 100 practices.

If the members agree, the trio will submit an expression of interest in merging to NHS England in September.

The merger would create one of the biggest CCGs in the country, covering a population of 860,000 with an allocation of more than £1bn. We understand local leaders hope to have the merger completed by April 2018.

Leeds is the latest city to consider merging its CCGs, following Liverpool, Manchester and Birmingham.

But it will need the buy-in of its members, which is not guaranteed, and there will be a lot work to make sure the new organisation is ready to go live in 2018. If not, leaders expect the new entity to launch in April 2019.

• CCG chief officer quits as STP lead