NHS financial crunch getting closer says latest quarterly report from The King's Fund

Financial confidence within the NHS is ebbing away, with a financial crisis looming in 2015/16, according to the latest Quarterly Monitoring Report published by The King's Fund.

One in eight trusts and clinical commissioning groups (CCGs) will overspend their budgets for the financial year just ended, based on a survey of NHS finance directors carried out for the report. Although this is an improvement on the findings from the previous quarter, it reinforces concerns that the NHS provider sector will end the year in deficit for the first time since 2006/7.

Looking ahead, only 40 per cent of finance directors in hospitals and other providers are confident their organisation will achieve financial balance in 2014/15. This figure plunges to just 16 per cent in 2015/16. CCG finance leads are more optimistic, although only a third are confident of balancing the books in 2015/16.

This lack of confidence reflects concerns about the implementation of the £3.8 billion Better Care Fund, which will see an additional £1.9 billion transferred from the NHS to support joint working between health and social care from April 2015. To compensate for this, NHS England has estimated that hospitals will need to reduce emergency admissions by 15 per cent - a prospect rated as very unlikely by nearly 70 per cent of hospital finance directors responding to this part of the survey.

Despite growing financial pressures, the NHS continues to hold up well against key performance indicators. The proportion of patients waiting longer than four hours in A&E stayed within the government's 5 per cent target range over the quarter, although this continues to mask significant local variation - more than 60 per cent of hospitals with major A&E units missed the target over the quarter.

Meanwhile, pressures on hospital waiting lists are growing, with more than 360,000 additional people waiting for treatment in January 2014, compared to the same month last year. Key findings from this quarter's analysis of performance data include:

  • 4.8 per cent of patients spent four or more hours in A&E during the quarter to the end of March 2014
  • 9.6 per cent of patients waited longer than 18 weeks for inpatient treatment in January, the highest proportion since June 2011
  • health care-acquired infections remain at historically low levels with just 382 cases of C difficile and 36 cases of MRSA reported in January 2014
  • the number of delayed transfers of care remains stable, with 4,266 patients recorded as delayed on the last Thursday of February, an increase of 2.6 per cent over the year.

Richard Murray, Director of Policy at The King's Fund, said: 'The NHS has coped well during the winter and avoided the A&E crisis that was so widely predicted. However, as the implications for hospitals of implementing the Better Care Fund sink in, there is a growing recognition that the NHS will face a financial crisis in 2015/16, if not before. It is now certain that the next government will need to find more funding for the NHS or accept significant cuts to services.'

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Notes to editors: 

How is the NHS performing? is the latest of The King’s Fund’s regular quarterly monitoring reports. For further information or to request an interview with Richard Murray, please contact the Press and Public Affairs team on 020 7307 2585 (07584 146035 if calling out of hours).

This quarter's survey was carried out online between 24 February and 10 March 2014. Of 235 NHS trust finance directors contacted, 74 responded. We contacted 195 CCG finance leads, of whom 47 responded.

The King's Fund is an independent charity working to improve health and health care in England. We help to shape policy and practice through research and analysis; develop individuals, teams and organisations; promote understanding of the health and social care system; and bring people together to learn, share knowledge and debate. Our vision is that the best possible care is available to all.