One in five NHS hospitals ‘heading into deficit’

The NHS will struggle to meet its target of delivering £20bn in efficiency savings by 2015, according to a survey of NHS trust finance directors.

The latest quarterly monitoring report, conducted by the King’s Fund, a health think-tank, suggests more than one in five hospitals are set to be in deficit by the end of this financial year.

But it also highlights that the overall performance of the health service is holding up well during the traditionally testing winter period.

The number of institutions in financial difficulty has risen on previous surveys and “highlights the growing pressures on hospitals as the NHS continues to manage the biggest financial squeeze in its history”, the fund said.

In another sign of the stresses on the system, the survey shows less than half – 47 per cent – of finance directors expect to meet their productivity targets for the current financial year.

The survey also found that staff morale is now the biggest concern identified by hospital finance directors.

Clinical commissioning groups, which since April have been in charge of about two-thirds of the NHS budget, are more upbeat. Close to two-thirds – 61 per cent – of finance chiefs are confident of meeting productivity targets.

However, one in eight, or 13 per cent, expect their group to be in deficit at the end of the year.

The impact of the steep cuts to local authority budgets is also clear from the survey, with more than a third, or 36 per cent, of directors of adult social services expecting to face deficits.

Despite the financial pressures, the fund’s analysis shows no immediate lapse in NHS performance.

Over the quarter ending in December 2013, the proportion of patients waiting more than four hours in A&E was within the government’s target range of 5 per cent.

Although one in four hospitals (26 per cent) breached the target, the data suggest most hospitals have so far managed to cope with the sometimes difficult winter period.

Waiting times for hospital treatment are also within the target range, although the proportion of outpatients waiting more than 18 weeks for treatment has reached its highest level since 2008.

Professor John Appleby, chief economist at the fund, said: “Despite warnings about a potential crisis in A&E, most hospitals are coping with winter pressures so far – a tribute to the hard work of staff in A&E departments.

“However, the growing number of hospitals set to overspend their budgets shows that for some, it is no longer possible both to maintain the quality of services and balance their books. The emerging concerns about staff morale in hospitals are very worrying as there is a proven relationship between staff satisfaction and the quality of care provided to patients.”

Source The Financial Times