Regulator Monitor today urged foundation trusts to plan “sooner and more effectively” for future financial pressures, as its latest quarterly report showed the sector had made little progress in closing the gap between planned and actual savings.

Six months into 2012-13, the foundation trust sector was 15.6 per cent behind on its cost savings plans, the report showed – only a marginal improvement on the 16.3 per cent gap Monitor reported three months previously.

By the end of September 2012, FTs had recorded cost savings of £561m, or £103m less than planned.  

Stephen Hay, Monitor’s managing director of provider regulation, said the sector overall had improved its financial performance, but “a few trusts” were not “making the necessary savings early enough in the year”.

He added: “However, to meet the challenge of financial pressures in the medium term, all trusts will need to understand the forces at work within their local health economy and develop strategic plans to deal with them.

“Without exception, trusts will need to plan sooner and more effectively for the longer term to ensure they can continue to deliver quality services.”

Despite the shortfall in savings, the FT sector recorded a net surplus for the first half of 2012-13 of £201m – more than 12 per cent ahead of plan.

Within this, 26 – out of a total of 144 – FTs recorded deficits totaling £90m. Monitor said this was “comparable” with the same period last year, when 28 out of 138 FTs recorded deficits totaling £80m.

Fourteen of the 26 trusts in deficit were also in significant breach of their terms of authorisation. All but three were acute trusts. The three non-acutes in deficit were the mental health FTs Cambridgeshire and Peterborough, and Norfolk and Suffolk, and the specialist Royal National Hospital for Rheumatic Diseases.

The Department of Health also published its report for the second quarter of 2012-13 today, which covers the financial performance of strategic health authorities, primary care trusts, and non-FT providers.

The top-line figures – which, unlike Monitor’s report, only show organisations’ predicted outturn for the full financial year – showed little change from quarter one.

Strategic health authorities and primary care trusts are now forecasting a net surplus for the year of £1.18bn, up slightly from £1.15bn in quarter one.

Non-FT providers are forecasting a net surplus of £60m, down slightly from £71m in quarter one.

Five trusts – South London Healthcare, Barking Havering and Redbridge Hospitals, Mid Yorkshire Hospitals, Epsom and St Helier University Hospitals, and North West London Hospitals – were forecasting deficits totaling £160m. The same five trusts were forecasting the same gross deficit in quarter one.

Only one PCT – North Yorkshire and York – was forecasting a deficit, of £19m. This was also unchanged from the previous quarter.

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