Financial and service failures will become frequent over the next year unless trusts improve their efficiency plans, the NHS Confederation has warned.

Confederation chief executive Mike Farrar told HSJ that few NHS organisations are successfully transforming their services and releasing funds in line with the Department of Health’s quality, innovation, productivity and prevention programme.

Speaking ahead of Tuesday’s Commons health committee evidence session on public expenditure, Mr Farrar said that as cash becomes tighter across the system, trusts are already slipping on waiting times and financial indicators.

“There are relatively few areas in my experience at the moment that are really starting to transform their services so that they’re really meeting the QIPP challenge,” he said.

“If we don’t start to make the transformational changes, going into next year we’re going to see finance problems or service problems emerging fairly frequently.

“Most people have not really got ahead of the QIPP curve and you’re starting to see some slips in terms of some of the performance.

“If we don’t correct that over the course of the next six months – I don’t think we can wait too much longer – we will start to see the service deteriorating even more,” he said.

The confederation’s evidence to the health committee stated that short term savings have been exhausted and that it will be harder for trusts to hit their savings targets in 2011-12 than it was last year.

Its evidence stressed the gravity of the challenge facing the health service, arguing that the job is being made harder by the absence of clear political support for changes to services and the continuing lack of agreement on staff costs.

Mr Farrar told HSJ that action will be needed on the Agenda for Change pay structure.

Also appearing at the committee, Nuffield Trust head of policy Judith Smith told MPs that health economies were beginning to struggle in areas such as outer London, where there were already systemic financial problems.

King’s Fund chief economist John Appleby said much of the financial burden was being borne in the acute sector, as the DH had few “levers it could pull” apart from changing tariff payments.

He said that although the biggest efficiency gains were to be found in service reorganisations, many QIPP plans had so far been based on trusts “squeezing out” their share of the £20bn national target through cutting lengths of stay and workforce costs.

DH QIPP lead Jim Easton said last week that the department would put “increasing pressure” on trusts to ensure savings plans protected services.