Hospital Dr News

STP relationships strengthen as NHS faces continued financial challenges

Working relationships within the sustainability and transformation partnerships (STPs), introduced to help transform services and re-balance NHS finances, have improved significantly in the last six months according to new research.

However, the financial pressures continue and current efficiency drives are struggling to reduce the NHS funding gap.

In the latest NHS financial temperature check from the Healthcare Financial Management Association (HFMA), results show that half of the finance directors (FDs) and chief finance officers (CFOs) surveyed believe STP relationships are strong enough to deliver cross-organisational change.

This is up from just 20% in the last NHS financial temperature check in December 2016.

According to HFMA’s research, most provider trusts (84%) and clinical commissioning groups (CCGs) (63%) performed better in the 2016/17 financial year than they expected to.

In part, this improved performance is due to larger than expected injections from the £1.8bn sustainability and transformation fund received by some trusts.

For CCGs, meanwhile – who are expected to report a combined surplus in the region of £250m for 2016/17, compared to a £16m deficit the year before – the release of their 1% risk reserve funds has boosted their financial performance.

FDs and CFOs are targeting further financial efficiencies in the current financial year.

Through cost improvement programmes (CIPs), finance professionals in trusts are aiming to achieve savings of 4.5% in 2017/18, which would be an improvement on the 3.7% achieved in 2016/17.

Similarly, through their equivalent QIPP (quality, improvement, productivity and prevention) plans, CCGs are aiming for efficiencies of 3.9% this year, compared to 2.6% in 2016/17.

Mark Orchard, President of HFMA, commented: “The last few years have been the most financially challenging that most of us in the NHS can remember and the challenges look set to continue.

“However, there are reasons to be positive. The level of efficiency savings delivered in 2016/17 by finance staff working in collaboration with their clinical and management colleagues should be applauded.

“In many ways, though, this is just the beginning. The efficiency challenge in 2017/18 is even tougher. Collectively, everyone in the NHS needs to find ways to be more resourceful, more innovative and more collaborative to address the financial challenge in front of us.”

Results from HFMA’s latest NHS financial temperature check underline the scale of the challenge. While CCGs look likely to report a surplus for 2016/17, trusts reported a deficit of £791m.

And although this is a better position than the £2.45bn deficit in 2015/16, many of the same issues are having an adverse impact on the overall picture.

As savings continue to be made, many are predicting that quality of care may deteriorate. Around a quarter of trust FDs (24%) and CCG CFOs (28%) think quality may decline in the coming 12 months, with waiting times (86%) seen as the most vulnerable area.

Niall Dickson, chief executive of the NHS Confederation, commented: “At one level it appears that some NHS organisations are managing to balance the books, but this also shows that the health service is struggling to meet demand, never mind transforming services for the future.

“Our members have repeatedly pointed out that they cannot sustain current levels of service with such a fragile funding settlement and that this is likely to get worse with NHS spending per head falling next year.”

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