• NHS Providers flags unrealistic savings targets at some trusts
  • New survey reveals trusts’ cost improvement plans worth up to 8 per cent of turnover
  • But trusts indicate financial task “more deliverable” than previous years

A “deep-dive” is needed to understand why some trusts’ savings requirements for 2019-20 appear much higher than average, according to a representative body.

Data released by NHS Providers – shared exclusively with HSJ – indicated more than one in 10 trusts would need to make savings worth more than 6 per cent of turnover to achieve their control totals, with one trust reporting an 8 per cent savings target. 

The average savings target for 2019-20 is 3.6 per cent, according to the data based on survey responses from 99 trusts.

Chris Hopson, chief executive of NHS Providers, said the variance from the average “makes us nervous” because national leaders had previously said the whole provider sector would benefit from the “more realistic financial task” for 2019-20 which accompanies a portion of the extra money the government gave the NHS.

“We find it odd that a number of trusts are saying this task is not looking as good as what everyone else is saying,” he told HSJ. “What makes us nervous is some trusts are saying this is just as difficult to deliver as it has always been.”

The issue is important because the Treasury will expect more trusts to deliver surpluses to show the new money is being spent well, Mr Hopson said.

He stressed that the survey broadly showed “people are saying the task does look more deliverable than in the past”.

But he called on national leaders to undertake “evidence-based work” to explore why those outlying trusts face savings targets of up to 8 per cent.

Community trusts which hold local authority sector contracts could be particularly adversely affected due to issues over pay

NHS Providers’ report on the survey suggested the variance has emerged because of issues such as funding Agenda for Change pay increases, the changes to the market forces factor and clinical commissioning group allocations, and the changes to specialist tariffs.

“What NHS Improvement is saying is that those trusts failed to realise the right level of savings in 2018-19, but the trusts are saying it’s the impact of a number of macro-factors,” Mr Hopson said.

“If the deep dive did genuinely identify that most of the problems are from not realising recurrent saving previously, then we’ve got a difficult argument to make. But if it showed there were a group of trusts adversely affected by the market forces factor then we would need a discussion about what to do about that.

“The bit that’s really important to us is to do the evidence-based work to find out what is going on here and not just make the assumption that it’s because the providers haven’t realised the 2018-19 savings they should have done because we think that’s too simplistic an answer.”

Mr Hopson said his organisation was discussing the issue with NHS England and NHS Improvement.

Other findings from the survey included:

  • Two-thirds of control totals for 2019-20 are for deficit positions before the allocations of non-recurrent funding, such as provider sustainability funding and financial recovery funding;
  • Thirty per cent of respondents were either “not confident” or “not at all confident” about hitting their 2019-20 control totals, compared to 15 per cent in 2018-19; and
  • Thirty-eight per cent of respondents felt more positive about their control total after receiving it, while 28 per cent felt more negative. The rest felt “about the same”.