New controls unlikely to have much impact on agency spending as NHS heads for financial crunch

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More than 60 per cent of NHS trust finance directors think controls on agency spending announced in June will not significantly reduce the amount spent on agency staff, according to the latest quarterly monitoring report from The King’s Fund. Only one in ten trusts surveyed thought the controls, which set a maximum hourly rate and cap the amount trusts can spend on agency staff, will have much impact.

The regular survey carried out for the report also found that three-quarters of trusts intend to recruit more permanent nurses in the next six months, suggesting that the NHS is continuing to prioritise quality of patient care despite rising financial pressures. With the majority of trusts forecasting deficits and no prospect of extra funding, it is clear that the NHS is heading for a financial crunch by the end of the year.

Key findings from this quarter’s survey include the following.

  • A third of trusts plan to reduce the number of permanent staff overall. The survey suggests that the non-clinical workforce is likely to take the strain, as over half (58 per cent) of these trusts still intending to recruit more permanent nurses.
  • For the fourth consecutive quarter, staff morale tops the list of concerns raised by trust finance directors.
  • Just over 40 per cent of trust finance directors and around 30 per cent of clinical commissioning group finance leads are concerned about achieving their productivity targets this year. 
  • Two-thirds (66 per cent) of trusts and 89 per cent of acute trusts (hospitals) are forecasting a deficit this financial year – up from 25 per cent and 21 per cent respectively on the same quarter last year.

The report also reveals that fewer than half (46 per cent) of mental health trusts are confident that commissioners will increase their funding in line with government commitments. This concern is not shared by commissioners, more than 80 per cent of whom are confident of honouring these increases.

The regular data analysis included in the report shows that NHS performance remains precarious. These data show:

  • The A&E four-hour waiting time target was missed in the first quarter of 2015/16, the first time this has happened at this time of year for over a decade.
  • More than 70,000 patients waited longer than four hours to be admitted to hospital from A&E (so called ‘trolley waits’) during the first quarter of 2015/16, an increase of 47 per cent on the same quarter last year. 
  • In May 2015 there were delays in discharging nearly 5,000 patients from hospital; this was up on the previous month and 10 per cent higher than the same time last year. 
  • Following a managed breach of the waiting time targets, the number of patients still waiting more than 18 weeks for treatment reduced to 6.5 per cent in May. Other measures of waiting times for treatment will no longer be used as targets following the review by Bruce Keogh at NHS England earlier this year. 
  • The proportion of patients receiving cancer treatment within 62 days of an urgent referral from their GP reached a record low of only 82.3 per cent in the final quarter of 2014/15, below the 85 per cent target and the lowest since the target was introduced in 2009.

Commenting on the report, John Appleby, Chief Economist at The King's Fund, said: ‘Rising costs, cuts in the payments they receive for treating patients and increasing demand makes 2015/16 the most challenging year for NHS providers this century, and the majority expect to be in deficit by the end of the year. Despite this, trusts remain focused on improving the quality of care and are planning to recruit more nurses.

‘There are considerable opportunities to make productivity improvements, but continuing to rely on top-down policy levers such as limiting staff pay increases and capping agency fees will not be sufficient. The most promising opportunities lie in changing clinical practice to deliver better outcomes at lower cost, something that can only be achieved by engaging NHS staff in a new mission to deliver better value.’  

Notes to editors

How is the NHS performing? is the sixteenth quarterly monitoring report by The King’s Fund. It covers the first quarter of 2015/16 (April to June) (although time lags in the publication of data mean that reporting on some performance indicators covers different periods).

For further information or to request an interview, please contact the Press and Public Affairs team on 020 7307 2585 (07584 146 035 if calling out of hours).

The report details the latest survey of NHS finance directors and CCG finance leads, which was carried out from 5 June to 22 June 2015. Of 254 NHS trust finance directors contacted, 100 responded. We also contacted 202 CCG finance leads, of whom 53 responded, covering 58 CCGs (28 per cent of CCGs).

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.