• Around 60 trusts have rejected their control totals
  • Analysis suggests efficiency assumptions averaged 6.4 per cent
  • Lord Carter and former Monitor CEO have previously said 2 per cent is an achievable efficiency target
  • Trusts described their savings requirements as “impossible” and “undeliverable”, and said it would be “irresponsible” for the board to sign up to them

Providers that rejected their financial targets for next year had been tasked with delivering efficiency savings three times higher than what is deemed achievable, according to analysis shared with HSJ.

More than a quarter of NHS trusts have rejected their “control total” for 2017-18 – equating to around 60 organisations – and analysis by NHS Providers suggests the efficiency assumptions within them averaged 6.4 per cent.

man with calculator


The analysis said the savings requirements were ‘impossible’

Both Lord Carter, who led a major review into NHS efficiency, and former Monitor chief executive David Bennett have previously said 2 per cent is an achievable efficiency target for providers.

NHS Providers’ analysis was based on survey responses from around 100 organisations.

It said trusts had described their savings requirements as “impossible” and “undeliverable”, and that it would be “irresponsible” for the board to sign up to them.

The report found the savings requirement across the whole trust sector, including organisations that have agreed their control total, is 4.2 per cent next financial year, compared to 4 per cent in 2016-17.

After the third quarter of this year, trusts had delivered savings of 3.2 per cent, although this included income generating schemes and almost 1 per cent was non-recurrent.

Of the survey respondents, there were four trusts that rejected savings targets – known as cost improvement programmes – of around 10 per cent. However, it found nine trusts that had accepted control totals requiring savings of between 6 and 8 per cent.

The stated aim of national NHS bodies has been for the provider sector to post a deficit of £250m in the current financial year, and then to break even in 2017-18.

However, this year’s deficit looks set to be far larger than was hoped, with the latest official forecast suggesting a £873m overspend.

This means trusts that missed this year’s target were tasked with making additional savings next year – leading to the higher efficiency requirement.

The NHS Providers report added: “The sector is forecast to end the year with a deficit of approximately £900m, while the target set at the start of the year by NHS England was [a deficit of] £250m.

“Making up the shortfall next year is vital. However, there has to be a question as to whether continually exhorting the sector to find ever deeper savings is the correct approach, and whether what is being asked of the sector is realistic…

“The number of one-off savings that providers can make is dwindling. The tariff efficiency factor is based on the assumption that 2 per cent efficiencies is a reasonable but stretching ask of the sector, whereas the demand made via control totals for next year shows many providers were asked to make cost improvements of 5 per cent or above.”

HSJ asked NHS Improvement several questions, including whether it has any confidence the provider sector can return to financial balance in 2017-18, but none of the questions were addressed in its response.

A spokesman said: “We know the NHS is working extremely hard to meet the financial challenge it faces, but we also understand how difficult this will be, particularly after a very difficult winter when the demand for urgent and emergency care has dramatically increased. But we also know the public expect us to provide the best care possible with the money available.”


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