HSJ’s email briefing on NHS finances, savings and efforts to get the health service back in the black.
Unpicking the accounts
NHS organisations are preparing to close their accounts, and there will be plenty of unpicking to do once the numbers are in.
There appears to be increasing nervousness about the commissioning side of the fence, with leaders at NHS England anticipating that various “games will be played”.
It is crucial that NHS England, which incorporates clinical commissioning groups’ accounts, delivers its planned underspend of £800m for 2016-17, so it balances the expected deficit for providers.
But potential last minute deals between local organisations – involving “discretionary payments” from CCGs to help trusts to maximise income from the sustainability and transformation fund – could threaten NHS England’s position.
Although this hurts a CCG’s finances, it would secure additional income for the overall health economy, which is just the sort of collaborative thinking that has been strongly encouraged over the last year.
The problem is it also flies in the face of the principles of the STF, which was designed to incentivise genuine efficiency savings rather than simply passing the deficit between different organisations.
Perhaps unsurprisingly given their separate institutional priorities, there are conflicting attitudes towards these deals from NHS Improvement and NHS England (encouragement from NHSI and threats of personal scrutiny from NHSE).
It’s no wonder many local leaders would like to see a merger of the arm’s length bodies.
As the previous edition of this briefing predicted, the finance section of the Next Steps document was very light on detail.
It was left to Jim Mackey to start painting the outlook for 2017-18 in an interview with HSJ, hinting that the trust sector deficit could be in the region of £500m, rather than the planned breakeven position.
Providers will welcome this dose of realism from Mr Mackey, which contrasts with the expectations laid down at the beginning of 2016-17.
With 2017-18 already underway, NHS Improvement will have wanted to nail down the sector’s plans and expectations by now.
But dozens of trusts have refused to agree their control total targets, leaving NHSI having to negotiate “meet me halfway” deals with many providers. The regulator will simultaneously have to reach a compromise with the Department of Health and the Treasury over the size of the final deficit plan.
Whatever the agreed number is, everyone at the centre will know there will need to be plenty of headroom left for an inevitable deterioration, due to the extreme levels of risk attached to trusts’ plans.
Plymouth steps out of the naughty corner
One provider near the top of the risky pile will be Plymouth Hospitals Trust, which has decided it cannot afford to miss another year of STF money. Plymouth was one of the few trusts that held firm and refused its control total throughout 2016-17, and is due to end the year £40m in the red (according to the month nine forecast).
But in 2017-18 it has signed up to a control total deficit of £3.1m, which assumes receipt of £12m in STF, but will require a whopping cost improvement plan around 8-9 per cent (£40m).