Foundations trusts will “furiously resist” any attempt to push them into ploughing their accumulated surpluses into primary care as envisaged by the NHS Five Year Forward View, HSJ has been told.
Their response comes as HSJ reveals which organisations hold the purse strings on the £4.3bn in cash and cash equivalents the FT sector had built up by the end of 2013-14.
The forward view suggested these funds coupled with the proceeds from NHS land sales could help to “pump prime” the reforms necessary to save the NHS from falling into the red.
Government and its agencies would “support” foundation trusts to spend this money “to help local service transformation”, the document, which was published last month, added.
Leaders in the FT sector told HSJ they would “furiously resist” the centre if it moved to “grab” their collected cash.
Foundation Trust Network chief executive Chris Hopson said: “We have had some early conversations about how a transition fund might work. We have made it very, very clear that these surpluses have been built up for a very good set of reasons. Trusts often have significant capital investment plans and [the surpluses] are also, to be frank, a hedge against risk.
“People have built up the surpluses in the good times knowing they might have to draw on them in the leaner times. The responsibility for these surpluses lies with the FTs; any attempt by the statutory bodies to make a grab for them will be furiously resisted.”
Decisions on investment were more likely to be made by organisations in their local health economies than “the centre”, he added.
Mr Hopson said foundation trusts such as University Hospitals Birmingham, Northumbria Healthcare, Newcastle upon Tyne Hospitals, Southern Health and Yeovil District Hospital were already working on blurring the boundaries between primary and secondary care. More would follow their lead, he added.
HSJ analysis found the Shelford Group of England’s biggest teaching and research hospitals held £705m in accumulated cash while mental health trusts held £970m.
University College London Hospitals Foundation Trust chief executive Sir Robert Naylor said larger FTs were interested in investing in primary care but that their cash piles would be a poor source of funding for this purpose.
“Although FTs’ surpluses sound significant, in reality they aren’t. If you look at our surpluses, we need that for cash management purposes because if we run out we won’t be able to pay the wages.
“[The Shelford Group is] very supportive of investing in primary care because trusts like mine with a turnover of £1bn have greater scope to be able to borrow the significant sums of money that are needed. In London we think the investment needed is probably well in excess of £1bn. That’s not going to be found from FT surpluses.”
The £4.3bn figure includes charitable funds that were consolidated with trust accounts for the first time in 2013-14. While it is not known what proportion of the national figure is made up of such funds, they make up a significant proportion of some trusts’ totals. For example, of The Christie Foundation Trust’s £88m cash in the bank, £37m comes from its charitable account.
One FT finance director told HSJ that while some smaller trusts’ cash piles looked large, they often represented less than a month’s costs.
“Most trusts nowadays would look to use such balances to reduce future revenue expenditure through configuring services differently or invest-to-save schemes. I don’t think there is much potential for sorting out the GP premises issue on the back of cash held within the acute sector.”
Another obstacle is that expenditure of accumulated FT surplus counts to the Department of Health’s overall expenditure limit so could breach the budget.
- Department of Health and Social Care (DHSC)
- Five year forward view
- Foundation Trust Network (NHS Providers)
- Mental health
- NHS England (Commissioning Board)
- North East
- NORTHUMBRIA HEALTHCARE NHS FOUNDATION TRUST
- Robert Naylor
- Simon Stevens
- South West
- SOUTHERN HEALTH NHS FOUNDATION TRUST
- UNIVERSITY COLLEGE LONDON HOSPITALS NHS FOUNDATION TRUST
- UNIVERSITY HOSPITALS BIRMINGHAM NHS FOUNDATION TRUST
- YEOVIL DISTRICT HOSPITAL NHS FOUNDATION TRUST