Health Foundation responds to Q3 financial performance report

Responding to the publication of the latest quarterly figures (Q3) for the NHS provider sector, Anita Charlesworth, Director of Research and Economics at the Health Foundation, said:

'NHS trusts are now expecting to end this financial year with a £873 million overspend compared to a target of £580 million just three months ago. More than half of NHS providers can't balance their books. The NHS is locked in a vicious cycle of financial deficits, cost-cutting and inefficiency. Despite these challenges, trusts have managed to reduce by a quarter their spending on agency staff. But the NHS cannot do it alone.

'Hospitals will find it very difficult to balance their books while social care remains under such intense pressure. Days lost to social care related delayed transfers have risen sharply, which detrimentally impacts on patients, staff and budgets.

'The NHS has already raided £1.2bn of its long-term investment funding to prop up hospital budgets in the short-term - and that's before the full force of this winter's pressures on the health service hits the financial bottom line.

'There is very little prospect of turning round hospital finances this year, but lessons must be learnt. The failure to invest in social care is a false economy, resulting in avoidable waste and inefficiency in the NHS. More importantly, it is having a negative impact on the quality of care provided to vulnerable older people.

'Both the NHS and patients need the almost £2 billion gap in social care funding for next financial year to be filled in the Budget next month. The additional powers to raise council tax will broadly cover the extra costs caused by the introduction of the 'National Living Wage', but do not address the underlying pressures in a service which has seen substantial cuts to eligibility while the number of older people needing care has risen.

'A significant increase in social care funding for the next financial year is vital if this winter’s financial and access problems in the NHS are not to be repeated.'

Media contact

Jack Cutforth
jack.cutforth@health.org.uk
0207 664 4623

Supporting charts

NHS hospitals were £886m in deficit 9 months into this financial year, and are forecasting a year end deficit of £873m. This is £293m worse than the target for the year of £580m.

Nearly 60% of trusts are currently in deficit, although following allocation of funding for sustainability and transformation this has improved from nearly 75% at this point last year.

Over-full hospitals are hitting provider finances as well as waiting time targets. Hospitals receive funding for planned operations, but these have grown slowly this year, as more beds have been needed for patients who can’t be sent home.

For the third year in a row the NHS is raiding capital investment funds to support day to day running costs - a further £1.2bn has been cut from long-term investment. This means funding to support the service changes essential to deliver the vision set out in the NHS Five Year Forward View is in short supply.

The NHS is locked in a vicious cycle of financial deficits, cost cutting and inefficiency. Despite these challenges, trusts have managed to reduce by a quarter their spending on agency staff. But the NHS cannot do it alone. Filling the almost £2bn gap in social care funding for the next financial year in next month’s budget will be vital if this winter’s financial and access problems in the NHS are not repeated.