Short-term financial fixes ‘not sustainable’

The National Audit Office has published two reports: the first, NHS financial management and sustainability,1 looks at the financial and operational performance of the NHS as a whole as well as the financial performance of local NHS organisations; the second, Review of capital expenditure in the NHS,2 examines the use of the NHS capital budget, which is for replacing and maintaining equipment and buildings. In these reports, the NAO highlights the financial pressures that the NHS is currently experiencing and warns that the short-term fixes introduced to manage the NHS’ finances are not sustainable.

NHS provider Trusts reported a combined deficit of £827 million and clinical commissioning groups1 (CCGs) failed to balance their books again, reporting a £150 million deficit in the financial year ending 31 March 2019. Trusts are becoming increasingly reliant on short-term measures, including one-off savings (rather than more permanent year-on-year savings) to meet yearly financial targets.2 These deficits were offset by a centrally managed NHS England underspend.

The NAO finds that the extra money brought in by Government to stabilise the finances of individual NHS bodies has not been fully effective. Although the NHS delivered increased activity in 2018-19, patient waiting times continued to slip. For example, while 717,000 more patients were treated in accident and emergency departments within four hours, performance against the target that 95% of patients should be seen within four hours fell to 88.1% (from 88.3% in 2017-18).