Exclusive: two in three hospital trust savings plans in trouble

Department of Health figures, released after a long Freedom of Information Act battle, show that 68 per cent of the 72 non-foundation acute trusts missed savings targets for the first six months of its £20bn efficiency drive. Seven made less than a fifth of the savings they need in 2011-12.

Overall, the non-FT acute sector had a net deficit of £135m at 30 September.

The figures demonstrate that parts of the NHS are feeling the strain of its unprecedented savings programme to a far greater degree than the DH previously acknowledged. Its most recent quarterly report said the “trust sector” – including acute, mental health and community providers – was forecasting a 2011-12 surplus of £36m at the end of September, with only six trusts forecasting a deficit for the year.

However, 30 non-FT acute trusts were in deficit at that point. Those that will not be foundation trusts by 31 March were forecasting a deficit of £41m for the financial year, nearly double their planned deficit.

The NHS trust sector missed its £544m savings target by £79m, or 15 per cent, but was forecasting it would deliver all but 9 per cent of its £1.3bn target for the year.

Halfway through 2011-12 five trusts had made less than 20 per cent of their planned savings for the year, were more than 50 per cent behind on their own plans to date, and were in deficit.

• View the figures in full using the CIP tracker, attached right in ‘related files’

Commons health committee chair Stephen Dorrell told HSJ the “key danger” was that money earmarked for improving community services would be redirected. “If the acute sector is running an unplanned deficit it’s hijacking the money,” he said.

King’s Fund chief economist John Appleby said: “We’re only an eighth of the way through a period of restricted funding, and these sorts of cost improvement targets have to be set each and every year. You would hope the first six months of the first year would be difficult, but [achievable].

“What this actually reflects is genuine difficulty in meeting the kind of plans they’ve set themselves.”

Healthcare Financial Management Association spokesman Chris Calkin said there was always an “optimism bias” in trusts’ cost improvement plans and he was unsurprised many had fallen behind. Mr Calkin – formerly finance director at University Hospitals of North Staffordshire Trust, which made just 20 per cent of its £24m savings target in the first half of 2011-12 – said trusts would need to seek one-off measures to ensure they broke even this year.

These measures might include the “traditional” strategy of leaving staff vacancies unfilled, or deferring spending in areas that would not affect patient care, such as IT, he added.

A DH spokeswoman said: “We expect a number of NHS trusts to catch up in the second half of the year and we are working closely with SHAs to make sure there are plans in place to do this.”