- Provider sector’s current trajectory would result in a full-year deficit of £2.8bn for 2015-16, but “additional opportunities” for savings still being implemented
- Regulators target a deficit of £1.8bn, to prevent the Department of Health from breaching its revenue spending limit for
- NHS has been told that any overspend this year would need to be repaid from its 2016-17 allocation
NHS providers have reported a combined deficit of £2.3bn for the nine months to December – £622m worse than planned.
The sector’s current trajectory would result in a full-year deficit of £2.8bn for 2015-16, according to performance figures published by Monitor and the NHS Trust Development Authority on Friday.
However, the regulators’ finance chiefs say they are still targeting a year-end deficit of £1.8bn, to prevent the Department of Health breaching its revenue spending limit.
Monitor and the TDA have taken a range of measures in recent months to reduce the provider deficit, including capital spending being deferred by many trusts and “headcount reductions”.
They said these measures have helped identify another £452m of “financial improvement opportunities”, which would reduce the forecast deficit to £2.37bn.
A further £127m of “unconfirmed opportunities” have also been flagged, and the regulators claim there is scope for “additional opportunities which are yet to be identified”.
A report going before a joint board meeting next week says: “Achieving this will require both an improvement in the underlying deficit in quarter four and significant further technical measures.
“We need boards and executive teams to pursue all possible and legitimate savings that can be made from reviewing balance sheets (eg specifically reviewing areas such as accruals and bad debt provisions). As we complete the aggregate accounts for the sector we will consider whether any final national adjustments in these areas are justified.”
The paper says the position has been driven largely by “ongoing high level use of agency staff”, which has contributed £1bn to the adverse variance, although this is partly offset by savings from underspending on substantive staff.
It says delayed transfers of care have cost £104m so far this year, although “other estimates put the true cost at a much higher level”, while failure to deliver the planned level of cost improvement schemes has created a £257m shortfall.
NHS Improvement chief executive Jim Mackey said: “This performance will be very disappointing for providers, and shows the range of difficulties they’re facing.
“Despite this, providers are making progress on improving their finances whilst also providing more treatment, to more patients with more complex care needs than ever before. However, further improvements will be required by the whole NHS at pace and scale to tackle the current financial and operational challenges it faces.
“At NHS Improvement, we intend to work with the providers to identify improvement opportunities, both recognising strong performers and supporting those who are struggling.”