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The story behind the figures: what NHS finance directors are telling us


Our quarterly monitoring report (QMR) provides a thorough review of NHS performance figures along with insight from an accompanying survey of trust finance directors and clinical commissioning group finance leads. Over the past couple of years I’ve often wondered when and if our QMR survey respondents would become more optimistic in their outlook. Not yet, would seem to be the answer.

The charts we compile as part of the QMR tell some of the story. Take, for example, the NHS financial directors’ end-of-year financial forecast over the past six years (see Figure). There is certainly not much sign of an optimistic outlook there – in fact it’s striking quite how substantial the decline is.

Bar graph showing responses to the question What is your organisation's forecast end of year financial situation? - Showing an increase in deficit

But as part of our QMR surveys, respondents also share with us a wealth of information about the real-life detail behind the numbers – it feels a shame not to share them.

Our latest survey of trust finance directors – carried out after the Spending Review announcement and planning guidance was published – shows that 67 per cent expect to overspend by the end of this year – including 89 per cent of acute trusts. Despite the aim of the planning guidance to contain overspending to £1.8 billion, we estimate an overall deficit of around £2.3 billion by March this year after various in-year loans and other financial support.

Our respondents spell out what this really means for their organisations – overwhelming pressure would probably sum it up. One trust finance director described how the organisation’s deficit meant that it would need a ‘£37 million cash loan in February to be able to pay staff and suppliers in the last two months of the year.’ Another finance director explained how the trust had revised its original planned deficit of £5 million due to ‘very significant operational service pressures and huge increases in demand for beds since August 2015’.

Some organisations are managing to keep their heads above the water, but often this is down to one-off land sales and other measures that are simply non-recurrent stop gaps; as one respondent said, ‘we will break even only if a property sale of approximately £6.5 million goes through, and it’s considerably delayed already’.

Several viewed the future in bleak terms. One trust in deficit reported that for them, it is ‘getting worse each month’. If this year is going to be tough for providers, next year for some looks even worse. ‘Frankly, it would be easier to pass a camel through the eye of a needle than for my trust to break even in five years! Everyone talks about savings, but that can only come about by spending less money on people, premises and procurement. What regulators and politicians forget is that demand is rising,’ lamented one respondent.

According to some finance directors, the financial pressure is beginning to negatively affect the quality of care. This most recent survey shows that, for the first time, a majority (53 per cent) of trust finance directors felt that quality of care had worsened over the past year. ‘This time last year my view would have been that the financial pressures were not making the quality of care worse. This has however changed. The deepening deficits in the hospitals and the severe cuts to adult social care are now worsening the care that the system can provide,’ one acute trust finance director told us.

So what are regulators and politicians doing about it? Looking beyond this financial year, the Spending Review has now provided a settlement for the NHS to 2020/21. Measures as part of planning guidance controls are aimed at containing this year’s deficit. These increasingly apply to the operational matters of providers. The central bodies have made it clear that finance and quality cannot trump one another, but within the current context, how providers will meet these controls – particularly the agency ‘ceiling’ on qualified nursing spend – remains to be seen.

‘We haven't managed to stay within our 6 per cent [agency spend] target. Quite why they introduced this at the onset of winter is beyond me. Post-Francis, Keogh, Berwick et al, targets like this are meaningless. It doesn't drive behaviour,’ was the response from one acute trust. Another noted the difficulties of finding permanent specialist medical and nursing staff in London: ‘It remains to be seen how effective are the new proposals to curb agency spend without compromising patient safety while meeting more demanding overall staffing levels’.

While there is no doubt that the health system is under pressure, there were also signs of optimism. One respondent told us about their experience with developing place-based systems of care and the positive effect this has had on quality of care, attributing this to 'some genuine joint working among commissioners that is feeding through to providers, so that we can contribute to genuine joint win-win situations'. With the introduction of sustainability and transformation plans and the development of 'transformation footprints' perhaps more of this optimism will be evident in future surveys.