• Experts have warned about the “different incentives” created by the £1.8bn bailout fund for NHS providers
  • Many trusts have back-loaded their savings plans for 2016-17
  • From next year, bailout payments will be weighted towards latter months of the year

Regulators are to introduce new measures aimed at removing some of the “different incentives” that could lead to over-optimistic financial planning.

HSJ has reported on several warnings in recent weeks about the incentives created by the £1.8bn bailout fund for NHS providers.

Trusts must agree and meet tough financial targets in order to access their share of the fund, which is being allocated in four instalments after each quarter of 2016-17.

NHS Providers has warned of the “different incentives”, which mean trusts “will be very keen to show how on track they are in the first three quarters of the year”. The Nuffield Trust has warned of a potential “big reveal” and “nasty surprise” later in the year.

Analysis by HSJ has also shown that many trusts have “back-loaded” their savings plans, and assume significant efficiencies can be delivered in the second half of the year.

New guidance sent out to all trusts last week by NHS Improvement about next year’s “sustainability and transformation fund”, seen by HSJ, says: “To mitigate the risk of trusts going off-plan in later quarters, measures are being introduced that will apply to the STF regime in 2017-18 and 2018-19.

“STF payments will be phased so that extra weighting is given to performance towards the end of each year, underlining the importance of consistent high performance.

“A total of 15 per cent of the funding will be allocated in quarter one, 20 per cent in quarter two, 30 per cent in quarter three and 35 per cent in quarter four. Trusts’ operating plans for both 2017/-8 and 2018-19 should reflect this distribution of indicative funding in their profiled position.”

It adds that STF money cannot be moved between financial years, irrespective of the two-year planning round for 2017-18 and 2018-19.

Where STF payments are “missed” in quarters three and/or four of 2017-18 due to deterioration in performance, they cannot be “rolled over” and earned back the following year.

All trusts given new targets to achieve provider sector surplus