NHS trusts in England have overshot their maximum deficit permissible for the financial year after just six months despite a £900m emergency cash injection from the government.
NHS Improvement (NHSI) said financial performance information from providers show they are on track to record a year-to-date deficit of £648m in the first half of the year.
The financial regulator described the figures, published on Friday [18th November], as “just £22m worse than planned” but they are some way off what health leaders have defined as an acceptable overspend for 2016-17, even by the most generous interpretation.
NHS England’s chief executive, Simon Stevens, and Jeremy Hunt, the health secretary, have pledged to ensure that trusts end the year no more than £250m in the red, while other NHS leaders have said the service can afford to record a figure of £580m without risking major financial problems.
Trusts are forecasting a deficit of £669m for the year, although that is after the £1.8bn sustainability and transformation funding, £900m of which was paid out in the first six months.
Sally Gainsbury, senior policy analyst at think tank the Nuffield Trust, said: “More and more people need healthcare, yet the money available to provide it is tightly squeezed.
NHSI’s report shows hospitals and other services are now forecasting a deficit of around £670m by the end of this financial year. That looks like a huge turnaround from last year’s deficit, yet is in fact flattered by the inclusion of an extra £1.8bn of emergency support pumped into the hospital sector, making the real forecast more like £2.5bn.”
NHSI said the deficit could be limited to £580m “if providers met their savings targets in full over the remaining half of the year”, but analysts and trusts expressed doubts.
The King’s Fund’s director of policy, Richard Murray, praised the trusts’ hard work on deficit reduction but warned “the second half of the year is likely to prove more challenging than the first”.
Anita Charlesworth, director of research and economics at the Health Foundation, said: “NHS trusts will have a mountain to climb if they are not to breach the end of year deficit target.”
Chris Hopson, chief executive of NHS Providers, which represents trusts, said its members were already “straining every sinew” to deliver savings.
“Significant risk remains as NHS trusts will have to increase their rate of savings in the third and fourth quarters to enable the sector to meet the target year-end position of a £580m deficit,” he said.
Hopson stressed that given the deficit reduction plan had been significantly aided by sustainability and transformation plan funding, action was needed in the medium and long term to address the “clear and widening gap between what’s being asked of the service and the funding available”.
NHSI lauded a second successive quarter in which fewer trusts reported a deficit against a backdrop of “unprecedented growth in demand”.
The chief executive, Jim Mackey, said: “No one should underestimate the challenge of turning around a very difficult financial position for the NHS. But, thanks to a phenomenal effort by staff across the NHS, we’re one-nil up at half time.”