Analysis finds NHS could experience funding crisis before general election
According to the Nuffield Trust, the NHS is poorly placed to deal with continuing austerity and could experience a funding crisis before the 2015 General Election. A new panel of 100 health and social care leaders also have raised concerns about the future sustainability of the NHS and social care. The Nuffield Trust’s Health and Social Care Leaders’ panel is a survey of NHS and social care professionals' views on the NHS and the social care system in England, and how it should be developed beyond the 2015 general election.
Nuffield Trust’s report, Into the Red?, is a comprehensive look at how the finances of the hospitals and commissioning groups that make up the NHS in England have held up under austerity between 2010 and 2014. Into the Red? draws on the annual accounts of primary care trusts, NHS trusts and foundation trusts up to and including 2012-13, and provisional accounts from regulatory bodies for 2013-14, which cover acute trusts and CCGs.
Based on audited accounts, it finds that until last year, the NHS was coping well with an unprecedented squeeze on funding due to increasing demand on the health service and the consequences of public sector austerity since 2010. But provisional data from the 2013-14 financial year shows cracks are starting to show in a system under severe financial pressure.
In the results of the health and social care panel published by the Nuffield Trust, over two-thirds of professionals felt NHS providers would have to go into deficit in order to provide a high-quality service, and almost half consider the NHS will no longer be free at the point of use in 10 years. Despite these concerns, one third said NHS care had improved over the past year.
Findings from Into the Red? showed NHS and foundation trusts as a whole were at least $171.3 million in the red in the last financial year—with 66 trusts in deficit in 2013-14. This compares to a surplus of $656.2 million and 45 trusts in deficit in 2012-13. Deficits were most concentrated in London and the Midlands and were predominantly in the acute hospital sector.
Commissioners found it harder to balance their budgets in 2013-14 than in previous years. Despite an overall underspend, 19 clinical commissioning groups ended the last financial year in deficit and NHS England projected a $645.9 million overspend on specialized services.
Spending on agency staff has soared across the NHS. In 2012-13 the cost of temporary staff grew 20%. This trend continued into 2013-14 with foundation trust spending on contract and agency staff increasing by $514 million (27%).
There has been a marked shift from NHS to private and voluntary sector community healthcare provision. Spending on private community provision rose by a third between 2011-12 and 2012-13, but spending on private providers in acute hospitals has slowed.
Despite government requiring efficiency savings of 4% across the NHS, both commissioners and hospital trusts are making smaller and smaller savings each year. In 2013-14, CCGs made savings of less than 2% of their total spend, while foundation trusts saved 3%, compared with 3.4% in 2012-13.
Demand for hospital services is on the rise—emergency admissions, outpatient attendances and day case episodes have all been increasing. This meant spending on hospital services grew by $1.9 billion in 2012-13, while spending on general practice fell $17.1 million. Hospital spending increased in 2013-14.
Andy McKeon, senior policy fellow at the Nuffield Trust and report co-author, said, “The NHS has risen to the challenge of living within its means over the past three years. But it now has reached a tipping point. Our analysis shows just how poorly placed it is to cope with the squeeze still to come. Demand for NHS services shows no signs of abating. With hospital finances increasingly weak, growing pressures on staffing and the goal of moving care out of hospitals and into the community proving elusive, the NHS is heading for a funding crisis this year or next.”
The Nuffield Trust analysis concludes reforms to NHS services by adopting new technologies and promoting out-of-hospital care could help put it on a more sustainable financial footing in the future, but expecting this to happen in the next few years and without additional funding is unrealistic.
“Too many hopes have been pinned on achieving radical system change quickly. Such changes take time and their impact is uncertain,” said McKeon.