Unpredictable financial flows caused by unsettled commissioning structures are causing problems for trusts, according to Trust Development Authority chief executive David Flory.
At a King’s Fund event today, Mr Flory spoke of the “really significant financial pressures” facing 31 trusts under his organisation’s remit.
Mr Flory said: “One of the factors [for financial pressures on trusts] this year is that we have new commissioning structures that inevitably take some time to settle down…And that’s taking some time, it’s perhaps taking more time than would be ideal in some instances. The consequence of that this year the financial flows through the system have become less predictable.”
He added: “But we need a predictability… we simply have too much uncertainty in the first half of the year as commissioners get to grips with their new responsibilities and their budgets.”
There is “a risk aversion in the commissioning system”, Mr Flory said, with “new bodies being reluctant to overcommit too soon”. He said that as a result of this reluctance income flows for a large number of trusts were lower than expected and “less than the actual they saw in the equivalent period last year”.
However, Mr Flory argued that while action must be taken to address trusts’ reduced income it could be counter productive to act too hastily given that the system was still finding its feet.
“We don’t want to rush and deal with it in one way and then find there’s an unpredicted income flow when the system settles down that means we didn’t need to deal with it in the first place,” he said.
“So we’re struggling with making those important calls about addressing the necessary and decisive action and waiting for the system to settle down.”
Increasing numbers of trusts would be facing financial struggles irrespective of the unsettled financial system, he said.
Mr Flory said: “There are undoubtedly a number of those trusts, more than we’ve seen before, who even when income levels [even] out are going to find themselves with committed levels of expenditure greater than the income available to them.”