There has been a significant deterioration in the NHS’s finances, with more than a fifth of primary care trusts reporting overspending.
Finance reports from 33 primary care trusts in six strategic health authority regions reveal a total overspend of more than £100m by the end of September.
NHS Hounslow was overspending by £7.1m, or 4 per cent of its allocation, by the end of September
If these 33 PCTs - highlighted by the SHAs and thought to be those facing the greatest financial difficulties - continue overspending at the same pace, they face a total deficit of more than £230m at the end of the financial year.
The overspending comes as a report published by North East SHA reveals “all 10 SHA finance directors have now reached a consensus as to the planning assumptions that PCTs should use” from 2011-12 onwards. That includes a “zero uplift in cash terms” which the SHA clarifies as meaning “all pressures from inflation, demographic change and new technology have to be accommodated within the current allocation”.
That suggests the overspending PCTs, already exceeding their baseline allocations by 1.3 per cent on average, could soon face worse difficulties.
NHS Bury, the worst of the 33, had overspent by £7.5m by the halfway point in the year - the equivalent of more than 5 per cent of its allocation. If it continues at its current pace of spending, the PCT will have a £15m deficit against its core allocation by the year end.
NHS Bury interim chief executive Mike Burrows told HSJ: “We are encountering very challenging times financially.”
He added the PCT had several cost saving schemes under way. Like the majority of PCTs with in-year overspending problems, Bury’s most recently published finance report says it is still planning to break even at the end of the financial year.
But Mr Burrows told HSJ the PCT was now “revising” that forecast in conjunction with its SHA, NHS North West.
NHS Hounslow was overspending by £7.1m, or 4 per cent of its allocation, by the end of September.
PCT board documents reveal that earlier this month it suspended all of its standing financial instructions in order “to tighten financial controls in the present financially challenging times”.
The suspension means any non-healthcare invoices or orders over £1,000 must be authorised by directors or their appointed deputies.
A spokeswoman for the PCT said it faced “challenging times” but was doing “everything possible” to manage its position with “minimum impact possible on patient care”.
Although not all SHAs have published their month six finance reports, the worst hit regions appear to be the North West, with seven out of 24 PCTs overspending; the East of England, with 10 out of its 14 overspending and London with 11 out of its 31 PCTs overspending.
Nearly all the PCTs having problems say the cause is higher than budgeted for acute activity and demand NHS continuing care, which requires PCTs to fund social home care for those with high level needs.
The eligibility criteria for that were changed two years ago and, although PCTs were expecting increased demand, NHS Sheffield chief executive Jan Sobieraj said the pressure had increased as local authorities were “closely scrutinising” where care costs could be passed to PCTs. He emphasised the shift of costs was legitimate, but it still meant a significant pressure on PCTs.
Adding to the pressure is uncertainty over when the payment by results tariff for 2010-11 will be published. NHS North East’s report says SHAs are assuming there will be a 2 per cent cash cut of prices from 2011-12. But they will have to wait to find out if there will be any increase in 2010-11 - the Treasury’s announcement that the pre-Budget report will not be published until 9 December gives the Department of Health little time before Christmas to finalise its tariff and operating framework.
But HSJ understands it is keen to publish before then the proposals for potential savings that NHS staff have submitted to national director for improvement and efficiency Jim Easton as part of the quality, innovation, productivity and prevention challenge.
Hotspots: PCT overspending
|PCT||Overspend by end of September||% overspend|
|Sutton and Merton||£7.5m||2.6|
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