Hospital Dr News

NHS is ‘financially unsustainable’ and 10-year NHS plan faces great risks

The NHS is suffering from substantial debts in some parts of the system and is financially unsustainable.

That’s the conclusion of the National Audit Office report, which also highlights the problems with growing waiting lists and year-on-year increases in waiting times.

It also warns that while the recent NHS long-term plan sets out a prudent approach to achieving improvements, a number of risks remain to the delivery of the plan.

The long-term funding settlement equates to a 3.4% average real-terms increase in funding, from 2019-20 to 2023-24 and applies only to the budget for NHS England.

Consequently, it does not cover some key areas of health spending such as education, public health and capital investment that could affect the NHS’s ability to deliver the priorities of the long-term plan.

In addition, without a long-term funding settlement for social care, local NHS bodies are concerned that it will be very difficult to make the NHS sustainable.

The report says there is also a risk that the extra funding will not be used effectively due to staff shortages. More money may have to be used to pay expensive agency staff or will go unspent as individual healthcare providers may not be able to recruit the staff to deliver additional activity.

Although the NHS nearly achieved overall financial balance in 2017-18, it continues to offset surpluses and deficits, which hides local disparities in financial health and patient experience. While NHS England had an underspend of £1,183 million, clinical commissioning groups (CCGs) together reported an overspend of £213 million, and trusts reported a combined deficit of £991 million, leaving a combined deficit of £21 million.

The provider sector has a self-reported underlying deficit of £1.85 billion.

Patient waiting times continue to slip. NHS performance against key access standards has steadily declined since 2012-13.

In 2017-18, only 88% of accident and emergency patients were seen within four hours, against a target of 95%. There are also now 4.1 million patients on waiting lists for non-urgent treatment (up from 2.5 million in 2012-13).

The NAO estimates it would cost £700 million to reduce the waiting list to the level last seen in March 2018, based on current trends.

Furthermore, the current funding flows in the NHS are complicated and do not support partnership working, integration and the better management of demand.

Trusts also told the NAO that Sustainability and Transformation Fund payments made by NHS England have encouraged trusts to prioritise short-term gains over long-term sustainability which also resulted in reduced collaboration with other local bodies.

Capital investment, essential for maintaining quality of care and achieving long term transformation of the NHS, has been limited because of increasing pressure on operating budgets. Since 2014-15, the Department has used money originally intended for capital projects to cover a shortfall in the revenue budget to fund day-to-day services (£1 billion of its £5.6 billion capital budget in 2017-18).

Amyas Morse, head of the NAO, said: “The plan we have seen so far seems to be based on prudent assumptions, but we will really be able to assess whether the ambitions set forth are supported by funding when we can see the results of the Spending Review for the non-NHS England parts of the health service, and the funding for social care.”

The NAO has recommended that the government tests whether local plans to manage demand are realistic; ensure key risks to delivery of the long-term plan are identified; and, develop a sustainable long-term plan to support trusts in severe financial difficulty.

Dr Chaand Nagpaul, BMA council chair, said: “These financial problems are set against the backdrop of the chaos that is Brexit which could be disastrous for the health service’s workforce.

“The one in thirteen NHS doctors from EU countries have not had their future clarified while recruitment from overseas, a vital competent of the NHS operation, continues to face challenges.”

Most of the combined trust deficit is accounted for by 10 trusts whose position deteriorated significantly in 2017-18.

There are other indications that the underlying financial health in some trusts is getting worse. For example, the DoH gave £3.2 billion in loans to support trusts in difficulty, for example, to help meet staff costs and pay suppliers, up from £2.8 billion in 2016-17.

At the same time the number of CCGs in deficit is also increasing from 57 in 2016-17 to 75 in 2017-18.

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