NHS trusts post "unsustainable" £886m third-quarter deficit

NHS trusts in England posted a deficit of £886m at the end of the third quarter, £300m more than the target for the end of this financial year.

NHS Improvement, which published the figures on Monday, is predicting a year-end deficit of between £750m and £850m, much higher than the £580m previously described as the highest figure the health service could afford without risking major financial problems.

NHS Providers, which represents trusts, said its members had suffered as a result of the extra cost of winter pressures and lost income from having to cancel planned operations to provide sufficient winter bed capacity. It also warned that as bad as the figures are, they have only be achieved through a series of one-off savings, unlikely to be repeatable.

Chris Hopson, the chief executive of NHS Providers, said: “Despite doing everything they possibly can, NHS trusts are £300m behind the target of reducing the provider sector deficit to £580m by the end of March. This is largely because of winter pressures.

“Trusts spent more than they planned and they lost income from cancelled operations – both were needed to create the extra bed capacity to meet record emergency winter demand. This shows the danger of planning with no margin for unexpected extra demand. We can’t expect to run NHS finances on wafer thin margins year after year and keep getting away with it.

He added: “We shouldn’t kid ourselves. The NHS’s underlying financial position is not sustainable.”

A survey by NHS Providers was also published on Monday. The poll completed by finance directors from 99 hospital, mental health, community and ambulance trusts – more than 40% of the NHS provider sector – found that two-thirds said they were only staying on track as a result of one-off savings that may not be achievable next year and beyond.

Those one-off savings totalled £340m but modelling by NHS Providers suggests they could amount to as much as £1bn across the sector.

Trusts that were behind target told NHS Providers that the two biggest drivers of their financial deterioration were caused by the 3.5% annual increases in A&E attendances and hospital admissions, when most had planned for 2% increases. The increases meant significant lost income from elective operations as trusts freed up bed capacity as well as extra, unplanned, spending on staff and more beds to cope with the record emergency demand.

NHS trusts post "unsustainable" £886m third-quarter deficit