NHSE holds back cash support for struggling trusts

Providers running a deficit often need cash support from NHS England and the Department for Health and Social Care so they can pay suppliers and staff.

However, HSJ has learned that NHSE has now made access to drawdowns much stricter due to concerns about overspending, with trusts now more likely to have their applications rejected or receive less than they applied for.

Under the new policy, applications now need to be made on a monthly, rather than quarterly, basis while trusts have new criteria to meet for successful bids.

An email from NHSE’s finance team, seen by HSJ, said trusts applying for support need to provide assurances from their chair and CEO that they are on track with financial plan; have cash and cost controls in place; and confirm their workforce plans are on track.

Applications which do not meet these criteria are “highly likely not to be approved and/or [the] request capped”, the message, sent last month, added.

In further correspondence relating to September drawdowns, NHSE said it would challenge any applications where a trust is asking for more than half the value of its year-to-date deficit.

One finance director said trusts were taking “tough measures” as a result, including “stopping and slowing payments [to suppliers] and reviewing capital programmes”.

Nottingham University Hospitals paid just a third of its recent invoices within the 30-day target, according to its July board report, against a target of 95 per cent.

The trust told HSJ it had improved this performance in the current year to June, with around two-thirds of its suppliers paid on time against the better payment practice. But this is still well short of the 95 per cent target.

Other trusts highlighting “slippage” against the payment practice code include University Hospitals Sussex and East Kent, which is planning a deficit of nearly £90m.

Elsewhere, University Hospital Southampton said it was now below its “minimum cash threshold” due to delayed payments from NHSE.

A report to the board said it would review its “capital programme to ensure both affordability and to request capital cash support from NHSE where appropriate”.

However, the trust told HSJ in a statement: “UHS continues to hold a positive cash balance which increased further in July. We are confident that the financial performance of the trust will continue to improve… No capital projects have been delayed.”

Crackdown

The crackdown comes with local organisations already struggling to stick to their forecast of a £2.2bn deficit, instead overspending by nearly £250m in the two months to May.

NHSE has said it will provide enough cash to cover planned deficits but sources said it was resisting any further funding beyond this level.

One trust finance director said NHSE was “linking it [the new cash regime] to financial recovery”.

“If you need cash, it is probably linked to having a deficit. NHSE is using it as a vehicle for more regulatory oversight if you are off plan and to ensure trusts are delivering against their recovery plans,” they added.

Providers drawing down support are usually subject to enhanced spending controls, including the requirement for expenditure above a certain level to be signed off by the trust board, its integrated care board and the NHSE regional team.

NHS Providers chief executive officer Julian Hartley said: “Trusts are doing everything they can to boost productivity and to identify where more efficiency savings can be made but they need national support to manage severe cash pressures and allow them to focus on plans to improve care for patients.”

NHSE stressed trusts were still expected to pay suppliers promptly. A spokesman said: “It is essential NHS organisations operate within their statutory spending limits, and we are working closely with trusts to address any financial issues. Monthly drawdowns have been introduced to help provide additional support for trusts to meet their financial commitments, and NHSE will keep this measure under review as appropriate.”