• Analysis shows 40 providers now forecast to breach their deficit target after receiving nearly £200m of incentive payments
  • Sustainability and transformation fund was introduced to reward trusts that agree and meet their financial targets
  • Some trusts have received more than two-thirds of their STF allocation, yet are forecast to significantly miss their year-end control total
  • Explore the trust by trust data

Forty NHS trusts set to miss their financial targets have received almost £200m from the national fund intended to reward trusts for good performance.

Analysis by HSJ shows these providers, which are now forecasting to breach their deficit target in 2016-17, have received at least a quarter of their allocation from the £1.8bn sustainability and transformation fund.

Leeds General Infirmary

Leeds General Infirmary

Leeds Teaching Hospitals Trust has received £16.5m of STF

Some trusts have received more than two-thirds of their STF allocation, yet are officially forecasting to significantly miss their year-end control total.

For example, Leeds Teaching Hospitals Trust has received £16.5m of STF (73 per cent of its allocation), but is forecast to miss its underlying control total by £10m.

Others have received chunks of STF despite significant financial deterioration, which in some cases is worth up to 4 per cent of turnover.

The amount of STF received by trusts now forecasting to miss their year-end target was £187m after the first nine months of the financial year.

Twenty-three trusts have not received any of their STF allocation even though many forecast smaller deteriorations. For example, Lancashire Teaching Hospitals FT and Plymouth Hospitals Trust will miss out on £12m and £10m of STF respectively due to expected deteriorations of around £5m each (around 1 per cent of income).

The STF was introduced by national leaders at the start of the year to be used as an incentive for trusts to agree and meet their control totals.

The phasing of the payments prompted concerns that this would create incentives for trusts to “show how on track they are” during the year, in order to trigger payments from the fund, before a “big reveal” in the final months.

NHS Improvement subsequently changed the rules around the payments to address these concerns, but the new rules only come into force from 2017-18.

Trusts forecast to miss their control total that have received the largest STF allocations in cash terms

TrustSTF received ’000STF received as % of allocationForecast deterioration on control total ’000Deterioration as % of 2015-16 income
Leeds Teaching Hospitals  Trust 16530 73 -10000 -0.8963
University Hospitals of Leicester Trust 11408 49 -6901 -0.7969
Mid Yorkshire Hospitals  Trust 10542 63 -7391 -1.5309
University Hospitals of North Midlands Trust 8883 43 -19781 -2.8142
Derby Teaching Hospitals  FT 8869 65 -3550 -0.6819

Trusts that have received more than a quarter of STF and are forecast to miss their control total by the largest margins (as proportion of trust size)

TrustSTF received ’000STF received as % of allocationForecast deterioration on control total ’000Deterioration as % of 2015-16 income
East and North Hertfordshire  Trust 5216 49 -15451 -4.0
Isle of Wight Trust 1641 47 -5806 -3.4
Torbay and South Devon FT 3210 48 -9835 -3.0
University Hospitals of North Midlands Trust 8883 43 -19781 -2.8
The Rotherham NHS Foundation Trus 3250 50 -6434 -2.6

Trusts that responded directly to HSJ’s enquiries insisted their original financial plans were not overly optimistic or unrealistic, with many pointing to expected income from commissioners not being realised. They also said there had been “no undue pressure” to sign up to the control total targets.

Sally Gainsbury, senior policy analyst at the Nuffield Trust, said some providers may have been more “wily” in staggering their financial plans in order to maximise STF income.

But she added: “If they have been doing that it’s only because they want as much funding as possible to deliver their services.

“These are desperate times because providers are being asked to deliver impossible efficiency savings of 4 per cent, and there’s not enough money in the system. A lot of providers have been hit by things outside their control, such as fines not being reinvested or rising demand.

“It seems particularly unfair this year because an organisation that was more upfront about their projected profile may have been penalised for that, which seems very harsh.

“I worry about the implications for the organisations that are missing out on their STF payments because they’ll have to make up the difference by borrowing from the Department of Health, which will charge them interest.”

NHS Improvement, the regulator for the provider sector, did not respond in time for publication.

Leeds Teaching Hospitals Trust said it is “working hard to get back on track by the end of the year”.

East and North Hertfordshire Trust has previously outlined the causes of its deterioration, which relate to lower than expected income from commissioners and unexpected charges.

Mid Yorkshire Hospitals Trust and Torbay and South Devon Foundation Trust did not respond to specific questions, but pointed to operational pressures and failed efficiency savings. South Devon also said its contract negotiations with commissioners had resulted in significantly less income than expected.

University Hospitals of Leicester Trust said it has started an “internal turnaround programme to ensure its financial control mechanisms are robust”.

Portsmouth Hospitals Trust, which has received £7m of STF despite an expected £10m deterioration, said it would be “strengthening its internal controls and processes”.

Derby Teaching Hospitals FT did not respond in time for publication.

Oxford University Hospitals FT, University Hospitals of North Midlands Trust, and Isle of Wight Trust did not respond.

Exclusive: Trusts get £187m incentive payments despite plans slipping