• NHS England says some areas have been “living off bailouts arbitrarily taken from other parts of the country”
  • Some STP areas will be told to make “difficult choices” to scale back unaffordable services
  • HSJ has collated official figures to show which areas are likely to come under closest scrutiny

National NHS leaders are preparing to pin-point health economies that must make “difficult choices” to scale back “unaffordable” services.

The Next Steps for the Five Year Forward View, published by NHS England last month, said some areas have been “living off bailouts arbitrarily taken from other parts of the country or from services such as mental health”.

HSJ analysis identifies those with the greatest overspends both against financial “control total” targets, and against allocations/income for 2016-17, therefore likely to be targeted. Over-spenders highlighted by both methods include Staffordshire; Cambridgeshire and Peterborough; South West London; and Bristol, North Somerset and South Gloucestershire. 

National bodies have begun identifying regions that are “significantly out of balance”, though there are different views about how this should be measured. One measure likely to be considered is the combined performance of a region’s NHS organisations against their 2016-17 financial targets.

HSJ has collated the latest official forecasts for trusts and CCGs on a regional basis, to produce a map (below) showing the sustainability and transformation partnership areas most likely to come under scrutiny.

The darker areas on the map show the STPs that, according to official forecasts, are set to miss their 2016-17 financial control totals by the largest amounts.

Map: STPs’ distance from control totals (£m)

HSJ’s analysis suggests Staffordshire has struggled the most this year, with a combined distance from its control totals of £68m, which represents almost 4 per cent of its total income.

Bristol, North Somerset and South Gloucestershire is set to fall £45m short, with Gloucestershire £28m short. Both these figures represent 3 per cent of income.

The analysis does not take account of significant deteriorations that have yet to be reported in official forecasts, such as those known in Northumberland and Coastal West Sussex clinical commissioning groups. These will affect final judgements by NHS England and NHS Improvement.

Every local NHS organisation was given a surplus or deficit control total at the start of 2016-17, and HSJ’s analysis measures the extent to which these targets are being met.

We used the official year-end forecasts that were published for each organisation after the first nine months of 2016-17 to calculate the expected distance from the control total. For trusts, this excluded the impact of sustainability and transformation funding, as their financial performance is judged before this income is received.

The figures are the net sum at STP level of each member organisation’s distance from control total, expressed as a proportion of the “total place based income” for the STP. 

HSJ has also produced a map showing the actual surplus or deficit position for each STP, which is how some national figures believe the priority areas should be identified.

These STPs are also likely to be scrutinised, based on Q3 2016-17 forecasts

  • Sussex and East Surrey – £67m gap from control totals (2.2 per cent of income)
  • South West London – £50m gap (2.1 per cent)
  • Shropshire and Telford and Wrekin – £14m gap (1.9 per cent)
  • Somerset – £16m (1.8 per cent)
  • Cambridgeshire and Peterborough – £23m (1.7 per cent)
  • Coast, Humber and Vale – £35m gap (1.6 per cent)
  • Cornwall and Scilly – £15m (1.5 per cent)
  • North Central London – £39m (1.5 per cent)
  • Cheshire and Merseyside – £66m (1.4 per cent)
  • Devon – £27m (1.4 per cent)

The Next Steps said: “Some organisations and geographies have historically been substantially overspending their fair shares of NHS funding and their control totals…

“In effect they have been living off bailouts arbitrarily taken from other parts of the country or from services such as mental health. This is no longer affordable or desirable. So going into 2017-18 it is critical that those geographies that are significantly out of balance now confront the difficult choices they have to take.

“Where necessary this may mean explicitly scaling back spending on locally unaffordable services, so that they go into the next two years with a viable and balanced income and expenditure plan.”

HSJ asked the STPs if they agreed with the description in the document, and to detail any work that had been carried out to identify unaffordable services.

No direct answers to these questions were received at the time of publication, but several areas said their financial problems have been identified and plans are in place to address them. Somerset STP said its outturn financial gap is now expected to be around 1.2 per cent.

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