Trust CEOs decry ‘undeliverable’ and damaging financial plans

Many of the senior trust leaders speaking at HSJ’s Top CEOs roundtable admitted they had gone further than they wanted to in agreeing to higher levels of planned savings.

After this year’s financial planning process initially produced a projected national deficit of £3bn, integrated care systems were pressured to bring the numbers down to levels acceptable to NHSE, eventually arriving at a final deficit of around £650m. However, this revised figure is based on assumptions finance directors privately admit are unlikely. One ICS said publicly that it had switched from a deficit to a breakeven plan to avoid sanctions from NHSE.

At the roundtable event, University College London Hospitals Foundation Trust CEO David Probert said there were “definite challenges to the professionalism of some of our fantastic finance leaders”, who were “being asked to put in place plans that [they] may not fully agree are deliverable or are highly risky.”

He added: “It’s definitely the most challenging year we’ve ever had, probably in our modern history… we’re going into this year with cost improvement [at] the highest level we’ve ever had.”

The current year is the first full year in which financial performance is monitored on an aggregate system level, rather than by looking at the position of individual trusts. This allows ICSs to use surpluses built up in some trusts to offset deficits in others.

Newcastle Hospitals chief executive Dame Jackie Daniel said the intensity of the 2023-24 planning process had not given providers the headroom to properly consider the implications of agreeing to stretching financial targets. 

Dame Jackie admitted that: “In agreeing a control total across the system as big as ours… I went further than I wanted to go in agreeing that [total] by several million.”

She added: “[It’s] not a lot in the grand scheme of things. But the consequences of that, and trying to agree a control total… you start to unravel stable positions [at individual trusts] and the instability spreads.”

During the roundtable CEOs warned this new financial regime was leading to resources being siphoned off from community and mental health to prop up the acute sector.

Oxleas FT chief executive Ify Okocha said: “People talk to mental health providers [and] say, ‘can we have a bit more money to balance the books?’”

Mr Okocha said his trust had been asked to find an additional £10m in savings, and that it had been “suggested that we delay use of our mental health investment standards money” or freeze staffing levels to achieve that goal.

Sussex Community FT executive Siobhan Melia added she detected a “deceleration” in community services. Having to balance finances across systems, she added “means previous decisions around investment in alternative care pathways can’t necessarily be honoured.”

The full write up of the Top CEO roundtable can be found here.

No reward for good performance 

Moving on to another concern expressed by the chief executives, Ms Melia said: “As a foundation trust, it felt like there was a degree of reward for good financial performance. And it feels like at the moment there’s no reward for good financial performance.”

“For organisations that have had a history of good financial health, it’s a difficult dialogue with our people. You used to be able to say, if you hit that cost improvement plan, we’ll be able to generate some capital and there we’re going to invest it in here.

“Now it’s ‘if you hit that CIP we are great system players,’ which I understand, but it doesn’t quite feel the same in terms of reward.”

The NHS is losing the government’s trust

Elsewhere, retiring King’s Fund CEO Richard Murray said he was “tearing his hair out” at this year’s financial planning.

Mr Murray, who previously held a series of senior roles at the Department of Health and Social Care, including finance lead, told the HSJ podcast that trusts and integrated care boards had privately admitted to him they would not be able to break even and had “submit[ed] numbers they didn’t believe in”.

He continued: “We came through covid… [and] I thought there was a real chance to completely rebalance the system and have some real honest conversations about finance and money.”

However, the service had missed that “golden opportunity” and, as a result, was producing financial plans that could not be relied on.

He added that this meant the NHS was giving government “the impression of something that just can’t be trusted: ‘You said you were going to deliver this and you’ve haven’t.’”

NHSE’s chief finance officer has said he has “more confidence” in this year’s financial plans than he did at the same point last year.