The financial health of NHS bodies has worsened over the last two years, a Public Accounts Committee (PAC) report has concluded, as figures show the percentage of NHS Trusts and Foundation Trusts in deficit increased from 10% in 2012/13 to 26% in 2013/14.
The report also found that the overall net surplus achieved by NHS bodies in 2012/13, of £2.1 billion, fell to £722 million in 2013/14 and 80% of Foundation Trusts that provide acute hospital services were reporting a deficit by the second quarter of 2014/15. The committee’s latest report into the financial sustainability of NHS bodies also says the savings required across the NHS will be difficult to achieve by continuing with the same approach used in recent years.
“From all our work across all of Government, the fragility of the NHS finances causes me greatest concern,” commented committee chair, Margaret Hodge.
The report points out that NHS England, Monitor and the NHS Trust Development Authority recognise that radical change is needed to the way services are provided and that extra resources are required if the NHS is to become financially sustainable. This includes making better use of community and primary care services to reduce pressure on hospitals. Making this change will require significant upfront investment, but the money available for this is reducing as the number of organisations in deficit increases.
Among the committee’s recommendations were calls for NHS England and Monitor to implement proposals for changing payment for healthcare, to incentivise the integration of services between local organisations by 2015/16. It stated that the current system of paying for emergency admissions hinders, rather than helps, secure the financial sustainability of NHS bodies.
In addition, the Department of Health should require NHS bodies to use agency staff within a national framework contract unless they can demonstrate clear value for money benefits from local negotiation, and benchmark the cost of agency staff within and outside the national framework. Other recommendations included calls to support evaluation of alternative financing or operating options for costly private finance initiative schemes where there is a clear opportunity for improving value for money.
The head of the NHS Confederation, Rob Webster, said “All political parties need to make clear how they will ensure both the NHS and social care are sufficiently funded. By 2020 we will need to see at least £8 billion of extra funding each year and £22 billion of efficiencies delivered. Alongside this, social care services will need funding. An honest debate is required to give the public a better understanding of the choices we face.”
The full report can be accessed at: www.parliament.uk
