Thursday, 20 March 2014

NHS hospitals suffer annual loss for first time in eight years

NHS hospitals suffer annual loss for first time in eight years Combined deficit of £456.8m reported by 26 of 102 trusts, renewing fears about long-term financing of the NHS.

NHS hospitals will end the financial year in the red for the first time in eight years, according to official figures, with 26 loss-making trusts reporting a combined deficit of £456.8m.

The University Hospitals of Leicester NHS trust has run up the largest deficit: £39.8m. The figures published on Thursday will renew fears that the NHS's finances have been deteriorating sharply in recent months, especially as a result of many trusts having to hire extra staff, notably nurses, in order to ensure safe and high-quality care in the wake of the Mid Staffordshire scandal.

Experts including Professor Chris Ham, the chief executive of the King's Fund thinktank, are warning that hospitals can't hire the necessary number of staff without busting their budgets.

After surpluses at other hospital trusts are taken into account, NHS hospitals overall will end the financial year £112m in the red, the first loss recorded since 2006.

The losses of £456.8m were recorded by 26 of the 102 hospital trusts that have not achieved foundation trust status.

That will translate into a deficit of £247m by the end of March for the 102 NHS trusts of that type once the £210m surplus generated by the other 76 is taken into account. The figures appear in the latest financial-performance assessment of the sector drawn up by the NHS Trust Development Authority (TDA), an arm of the Department of Health.

That £247m overspend will alarm ministers and NHS bosses because it is more than three times higher than the £76m net deficit the TDA predicted for its trusts in April last year. A paper on financial performance, which its board will consider on Thursday, refers to the unexpectedly gloomy position as an "adverse variance of £171m".

The 26 trusts have incurred the losses despite all hospitals in England sharing most of the £400m of extra funding announced by the health secretary, Jeremy Hunt to help them cope with what many doctors had predicted would prove to be the service's toughest winter.

Once the £135m surplus for 2013-14 generated by England's 147 foundation trusts is taken into consideration, that leaves hospitals collectively facing a deficit of £112m for what has been a demanding year, with unprecedented pressure from ministers, NHS England, regulators and reviews to improve care standards.

Of the foundation trusts, 39 expect to end the year in deficit – almost double the 21 that did so a year before – according to the regulator Monitor.

That means that in total 65 hospital trusts will have run up an overspend this year, a big increase on 2012-13.

The Department of Health insisted that the NHS as a whole, once the finances of the 211 GP-led clinical commissioning groups had been included, would end the year in the black.

"We are insisting on compassionate care, and trusts are expanding nursing numbers to ensure safe staffing levels, which has inevitably put pressure on finances in the short term," said a spokeswoman.

"We are putting in place recovery plans for any trusts in financial difficulty, but ultimately, we do not accept that safe care costs more – and we remain confident that the NHS will deliver within budget at the end of this financial year. Because this government has taken difficult financial decisions, we have been able to increase the NHS budget to support increased patient demand and the needs of an ageing population." The Guardian

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