- Around 60 out of 238 trusts have refused to agree their financial “control total” for next year
- Control totals require provider sector to deliver average efficiency savings of 4 per cent
- Majority of providers have agreed their contracts with commissioners, with fewer than 10 thought to require a formal arbitration
NHS providers have again been asked deliver efficiency savings of around 4 per cent in 2017-18, which has led to a significant number rejecting their financial target, HSJ understands.
Sources have told HSJ around 60 out of 238 NHS trusts have yet to agree their financial “control total” for next year. Around one in three acute trusts have not agreed their target, it is thought.
Last week, NHS Improvement chief executive Jim Mackey said at the Commons public accounts committee that trusts would be required to deliver average efficiency savings of 4 per cent next year, which matches the requirement for 2016-17.
Mr Mackey has previously called for trusts to be given more realistic savings targets. Other leading figures, including Lord Carter and former Monitor chief executive David Bennett, have said 2 per cent is achievable.
The savings requirement, which for many trusts will be above 4 per cent, means some have refused to agree their financial control total for 2017-18. Trusts that do not agree their target are not eligible to receive a share of the £1.8bn sustainability and transformation fund.
The proportion rejecting their control total is roughly in line with those that initially rejected their target for the current year. Most of those have now agreed, though for some this only happened once they were placed in financial special measures.
Sally Gainsbury, policy analyst at the Nuffield Trust, told HSJ: “Providers have been told that if they dig deep and make their 4 per cent average savings this year, then their concerns about the difficulties of finding further efficiencies would be listened to. But it doesn’t seem like they have been, because they’re just being asked to do the same again or more in 2017-18.”
In the first half of 2016-17, the provider sector delivered savings of 2.9 per cent, of which 2.2 per cent were recurrent. The official forecast says the sector is expected to deliver 3.9 per cent by the end of the year.
At the committee hearing last week, chair Meg Hillier said to Mr Mackey: “In the past, you have sat here in this committee and candidly told us that 4 per cent was what caused the problems that we are in at the moment. How can these new plans deliver a 4 per cent efficiency saving and not create the problems that we have had?”
Mr Mackey replied: “Yes, I would rather it was 2 per cent; I would rather it was the lower figure, but the reality is that that is what the aggregation of plans is in order to deliver what they need to deliver. In this year they will have delivered three and a bit per cent, close to 4 per cent.
“We won’t be able to do it forever… There is no system in the world that has done this. It is certainly not possible forever, but this time last year most people wouldn’t have thought this was possible, what people have achieved this year.”
Meanwhile, a majority of providers have agreed their contracts with commissioners, with fewer than 10 thought to require a formal arbitration process.
However, NHS Improvement and NHS England have not yet said what proportion of contracts have been signed.
The deadline for contracts to be signed was 23 December 2016. When HSJ asked for details NHS Improvement said only that discussions were ongoing and NHS England did not respond.