- Outturn is £464m worse than planned, and compares to a £791m deficit reported in 2016-17
- It is the fifth successive annual deficit reported by the provider sector, and comes despite trusts delivering average cost improvement plans of 3.7 per cent
- Comes as the government prepares to outline a long term funding plan for the NHS
NHS trusts ended last year with a combined deficit of £960m, according to accounting data published by regulators.
The outturn for 2017-18 was £464m worse than planned, and compares to a £791m deficit reported in 2016-17. It was around £30m worse than was forecast three months ago.
It is the fifth successive annual deficit reported by the provider sector, and comes despite trusts delivering average cost improvement plans of 3.7 per cent.
In its final quarterly report for the year, NHS Improvement also acknowledged that more than a quarter of cost savings had been made non-recurrently (up slightly on the previous year), so will not have improved the underlying position.
Policy experts have estimated that the underlying deficit stands at around £4bn, which would be reduced to £2.2bn if the “sustainability and transformation fund” is assumed to be recurrent.
The government has pledged to outline a long term funding plan for the NHS over the summer, which could give the service a funding increase of between 3 and 4 per cent.
The number of trusts in deficit reduced marginally last year to 102, from 105 the previous year. However, 75 providers missed their pre-STF “control totals”, which was around 10 more than the previous year.
Several trusts reported large deteriorations in the final quarter, including Barts Health Trust; King’s College Hospital Foundation Trust; Barking, Havering and Redbridge University Hospitals Trust; Kettering General Hospital FT; and The Royal Liverpool and Broadgreen University Hospitals Trust.
This was partly offset by trusts reporting huge improvements, largely as a result of major land sales, including; Royal Brompton and Harefield FT; University College London Hospitals FT; Barnet, Enfield and Haringey Mental Health Trust; The Christie FT; and Royal Surrey County Hospital FT.
Sally Gainsbury, senior policy analyst at the Nuffield Trust, said the deficit is not surprising because of the “widening gap between what we are asking the NHS to do and what we are funding it to do”
She also described the reported figures as “window dressing”, as they include the benefit of £850m of one-off savings, plus the £1.8bn STF.
She added: “Taking these into account, along with other short term fixes, the true underlying deficit is likely to be in the region of £4bn – similar to our own projections. This hand-to-mouth existence is not a sustainable way to run complex and vital institutions like hospitals.”
Ian Dalton, chief executive of NHSI, said: “More than two thirds of providers ended the year on budget or better than planned. Given rising demand and record vacancies, this is an important achievement.”
The provider deficit, which also comes despite £335m of additional income being allocated by the government in November, has been largely offset by a £955m underspend within NHS England’s commissioning budgets, which includes £640m that was held back as a “risk reserve”
The trust sector is expected to reach financial balance in 2018-19, with the help of some additional funding. NHSI is yet to confirm the financial plan for the year, however.
NHS Improvement’s quarterly performance report
- BARKING, HAVERING AND REDBRIDGE HOSP NHS TRUST
- BARNET, ENFIELD AND HARINGEY MH NHS TRUST
- BARTS HEALTH TRUST
- Department of Health and Social Care (DHSC)
- Finance and efficiency
- Ian Dalton
- KETTERING GENERAL HOSPITAL NHS FOUNDATION TRUST
- KING'S COLLEGE HOSPITAL NHS FT
- NHS Improvement
- Nuffield Trust
- ROYAL BROMPTON AND HAREFIELD NHS TRUST
- ROYAL LIVERPOOL AND BROADGREEN UNIVERSITY HOSPITALS NHS TRUST
- ROYAL SURREY COUNTY HOSPITAL NHS TRUST
- THE CHRISTIE HOSPITAL NHS FOUNDATION TRUST
- UNIVERSITY COLLEGE LONDON HOSPITALS NHS FOUNDATION TRUST
Financial performance: Best and worst of 2017-18
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Trust sector reports 'window dressing' deficit of almost £1bn