Foundation trusts saw the cost of agency and contract staff shoot up by £300m last year, according to their annual accounts.

The increase is a 27 per cent rise from £1.1bn in 2012-13 to £1.4bn for 2013-14, a report by foundation trust regulator Monitor said last week.

In his introduction to the report, Monitor chief executive David Bennett said foundation trusts “continue to cite difficulties in recruiting to permanent posts”.

Such difficulties had been “exacerbated” by the impact of increasing clinical staffing ratios following the Keogh and Francis reviews.

The annual accounts also revealed the collective surplus of foundation trusts fell by marginally more than stated in Monitor’s last quarterly report.

According to last week’s assessment, the sector surplus fell by £366m from £500m in 2012-13 to £134m in 2013-14.

David Bennett

David Bennett said FTs ‘continue to cite difficulties in recruiting to permanent posts’

As reported by HSJ, Monitor’s last quarterly assessment in May put this drop at £358m.

The accounts also showed loan funding from the independent trust financing facility increased by £418m in 2013-14, from £1.1bn to £1.5bn, as the need for bailouts increased across the sector

Mr Bennett said small acute foundation trusts had “suffered the largest decline” in their earnings before interest, taxes, depreciation, and amortisation, which is an indicator of organisations’ efficiency.

The EBITDA for the acute sector overall dropped by nearly a percentage point, from 5.8 per cent in 2012-13 to 4.9 per cent in 2013-14.

Mr Bennett said this may “reflect smaller trusts being less able to absorb additional cost pressures”.

Improved levels for specialists trusts, from 7.2 per cent in 2012-13 to 7.4 per cent, was partly due to them being “less affected by fluctuations in emergency and non-elective demand”, he added.