Many NHS finance directors are becoming increasingly pessimistic about the future quality of patient services, a survey reveals.
More than one in five finance directors – 21% of Clinical Commissioning Group (CCG) CFOs and 23% of trust finance directors – believes the quality of patient services will deteriorate in 2016/17, while one third of provider trusts anticipate quality will decline further in 2017/18.
Concern from finance directors includes waiting times (76%), access to services (69%) and enabling a range of services being offered (61%), being the most vulnerable aspects of patient care.
The new figures come from HFMA’s latest biannual NHS Financial Temperature Check survey of around 200 finance directors in England. For the third year in a row, the financial performance of the NHS worsened, with trusts and CCGs reporting deficits.
Over a quarter (28%) of organisations reported a worse year-end position than anticipated at the beginning of 2015/16. This was particularly the case on the provider side, as 37% of trust finance directors said their year-end position was poorer than they had planned. Of the 47% that reported a better than expected performance, this was largely due to non-recurrent revenue generation measures such as the revaluation of assets.
All this led to a combined trust deficit of £2.45bn at the end of the 2015/16 financial year, compared to a planned deficit of £1.99bn. The main drivers for trusts ending the year in a worse position than planned were the cost of agency staff (51%), the under-achievement of savings plans (33%) and an increase in fines, challenges and deductions (23%).
Finance directors are also questioning the ability of their organisations to deliver the control totals set by NHS Improvement. Over three fifths (63%) of trust finance director respondents have signed up to their organisation’s control total, but of those doing so, only 60% expect their organisation to meet the conditions set.
Additionally, just 16% of finance directors are very or quite confident that organisations in their Sustainability and Transformation Plan (STP) footprint can deliver a connected strategic plan covering the period up to March 2021. There is some scepticism about the practicalities of collaboration, as only 35% of respondents believe the relationships between organisations in their STP footprint are strong enough to deliver the cross-organisational changes that are required.
Looking ahead, the report points to the fact that planned savings for 2016/17 are ambitious and previous research has told us that finance directors lack confidence that their organisation can deliver the 2% to 3% a year productivity gains needed to close the expected £22bn NHS funding gap.
Furthermore, two-thirds (67%) of CCG and almost half (48%) of trust respondents reported a high degree of risk associated with achieving their organisation’s 2016/17 financial plans. The biggest risks to trusts achieving planned savings were identified as slippages in cost savings (78%), spending on agency staff (72%), the impact of social care financial constraints (56%) and increasing demand (52%). The key risks to achieving financial plans in CCGs were identified as increases in emergency care activity (76%), continuing healthcare (69%), increased demand for services (67%) and slippages in cost savings (65%).
Paul Briddock, Director of Policy at HFMA, commented: “The scale of the NHS deficit continues to reach unparalleled levels, and it is unlikely the provider position will be in balance at the end of 2016/17, as originally planned. Our report confirms that while finance directors are feeling the pressures of the current financial situation, many also feel like short-term gains such as cash injections and non-recurrent savings are merely storing up more problems for the future.
“Although the finance community fully supports positive initiatives to revert the current outlook, they lack confidence in whether they can achieve the control totals set and implement effective STPs, as acknowledged in the recent letter issued from NHS Improvement.”
Briddock continued: “Fears around the impact the current financial turmoil in the NHS could have on quality are also a real cause for concern and we may start to see more of these predictions come true in the year ahead. To avoid this, there is a need for NHS organisations to work together to address these financial and operational pressures by the efficient redesign of services and to put an end to the shifting of financial problems between sectors. Although many see the STPs being key to future sustainability, finance directors highlighted that better leadership and clearer lines of accountability to drive the implementation of plans, are needed.”