- Two trusts do not expect to be back in balance until 2026
- Five more providers predict it will take them at least five years to break even
- Eight forecast to be in the black next financial year
Seven NHS trusts believe they will not technically break even for five years or more, with two requiring until 2026, HSJ analysis reveals.
Data for non-foundation trusts published by NHS Improvement shows two trusts getting back into balance in nine years:
- Solent Trust; and
- Surrey and Sussex Healthcare Trust.
The data comes from annual accounts submitted by trusts to the former NHS Trust Development Authority and include sums from historic loans, meaning trusts might break-even year-to-year but not pay down loans for a longer period.
Solent Trust’s finance director Andrew Strevens said the trust expected to repay all its cumulative deficits by 2026 but was planning to break even each year 2018-19.
Mr Strevens said: ”We have a deficit control total of £1m for 2018-19 and a deficit control total of £1.5m for 2017/18. Thereafter, we are planning to break-even, subject to contract agreements and continued STF money.”
Surrey and Sussex Healthcare Trust chief excutive Michael Wilson said: “The trust had a surplus in 2016-17 and forecasts a surplus in 2017-18. Your enquiry is referring to the break even duty, which is a technical, although statutory, item within the detail of the accounts.
”The break even duty allows a trust to balance a deficit with surpluses over a future period. However, Surrey and Sussex Healthcare Trust took out a cash loan of £56m in 2007 to cover the deficit of which £34m was repaid through a cash transaction.
“This means that it may appear as though the trust hasn’t ‘repaid’ the deficit through new surpluses. However, the repayment of the deficit has been completed. This is described in our annual report.”
The five other trusts that need at least five years to break even are:
- London North West Healthcare Trust (2024);
- Portsmouth Hospital Trust (2023);
- Royal Cornwall Hospitals Trust (2022);
- United Lincolnshire Hospitals Trust (2022); and
- Worcestershire Acute Hospitals Trust (2022).
The information comes from the annual accounts trusts must produce and submit to NHSI each year. Foundation trusts must put their accounts before parliament. The seven trusts were contacted for comment.
The data from the 2016-17 annual reports is a further illustration of the bleak financial position faced by the provider sector as a whole
The news comes after senior NHS managers reacted with dismay to last week’s budget settlement, which they considered insufficient to meet the performance challenges the service faces.
Although there will be an extra £1bn targeted at reducing elective waiting backlogs and £600m to relieve pressure on emergency departments, health think tanks say the underlying provider sector deficit is close to £4bn.
Of the 44 trusts hoping to return to balance in the future, eight anticipated it being in the 2018-19 financial year. These include Barking, Havering and Redbridge University Hospitals Trust and Lewisham and Greenwich Trust, both of which have revealed significant financial problems since the 2016-17 accounts were filed with the regulator.
A NHS Improvement spokeswoman said: ”The NHS is facing unprecedented demand for its services and providers are delivering levels of efficiency and productivity that no other health system is managing to deliver.
”We have seen excellent results in reducing the amount of money spent on agency staff and the NHS has also made significant savings through the financial improvement programme.
”We will continue to work with those trusts that face challenges, including giving them access to best practice and additional expertise.”
Health Foundation research and economics director Anita Charlesworth said the extra money in the budget was welcome, but added: “Even with the announced investment, the NHS will be under considerable pressure. The extra capital and day to day funding amounts to around half of the £4bn of spending pressures facing the service next year. The NHS is outperforming the wider economy in productivity improvements but will still face big challenges, not least a waiting list of 4 million people.”
NHSI data released earlier this month showed the number of provider trusts with a worse than expected financial performance rising from 67 in quarter one to 87 in quarter two.
Tim Connolly, finance policy adviser at NHS Providers, said this was “worrying given the significant deterioration in provider finances that occurred in quarter three of the 2016-17 financial year”.
This story and headline were amended at 14.40 on December 4 to make the nature of the break even duty clearer.
- Finance and efficiency
- Foundation Trust Network (NHS Providers)
- LONDON NORTH WEST HEALTHCARE NHS TRUST
- NHS Improvement
- NHS SOLENT HEALTHCARE
- Nuffield Trust
- PORTSMOUTH HOSPITALS NHS TRUST
- ROYAL CORNWALL HOSPITALS NHS TRUST
- SURREY AND SUSSEX HEALTHCARE NHS TRUST
- UNITED LINCOLNSHIRE HOSPITALS NHS TRUST
- WORCESTERSHIRE ACUTE HOSPITALS NHS TRUST