One in three NHS hospitals needed Government bailout funds last year

Department of Health has had to pay out £511m in unplanned funding

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More than half a billion pounds in Government bailouts were paid to the NHS in last year, as the number of hospitals in need of extra cash more than doubled, Government auditors have said.

In a new report on the parlous financial state of the NHS in England, the National Audit Office said there was growing stress on NHS trusts and warned the situation was “not sustainable”.

Thirty-one hospitals required extra money just to maintain services in 2013/14 – up from 14 the previous year, the NAO’s report said.

One in three hospitals recorded a deficit in March of this year - more than double the number that went into the red last year. To allow struggling hospitals to continue providing vital services, the Department of Health has had to pay out £511m in unplanned funding – up from £263m the year before.

Margaret Hodge MP, chair of the Public Accounts Committee said the report was “deeply alarming”.

“I do not believe it is any exaggeration to say that the future sustainability of our National Health Service is at risk,” she said.

“Some trusts are only getting by on handouts. Things are getting worse rather than better and we all know that when trusts are under this kind of financial stress it is the quality and safety of patient care that can suffer.”

The report confirms longstanding concerns over the financial sustainability of the NHS England, which is struggling to cope with ever-rising demand, in the wake of the longest and most severe budget squeeze in its history.

The NHS as a whole is facing a £30bn deficit by 2020. Simon Stevens, NHS England’s chief executive, last month warned the NHS would need an extra £8bn in Government funding by the end of the decade to haul itself out of the red.

His report, the Five Year Forward View, also said health service would have to undergo one of the biggest transformations in its 65-year history, with a greater focus on prevention and care in the home and the community.

Responding to the NAO’s report, Mr Stevens said: “Week-in week-out, NHS staff go the extra mile to ensure their patients get excellent care. But an aging population, a growing population and the possibilities of new treatments, all mean that pressures are real, and we need to get going on the new path set out in the NHS five-year forward view.”

The NAO also warned that there was still “considerable uncertainty” that Government schemes aimed at reducing the pressures and costs to the health service – including pooling some NHS and local government funding to pay for better social care – would succeed.

Auditors said that it would not be sustainable for the NHS to continue relying on regular bailouts from Government and that a long-term solution was needed to guarantee “value for money” to taxpayers.

Amyas Morse, head of the NAO, said: “Until the Department [of Health] can explain how it will work with bodies such as NHS England, Monitor and the NHS Trust Development Authority to address underlying financial pressures, quickly and without resorting to cash support, we cannot be confident that value for money will be achieved over the next five years.”

A Department of Health spokesperson said that hospitals needed to take control of their finances.

“Financial discipline must be as important as safe care and good performance. Many NHS organisations are already achieving this and all understand the need for greater efficiency,” the spokesperson said.

The report comes as new NHS waiting times figures reveal that 37,712 patients have waited longer than the 18-week target for an operation in September – the highest since the target was set in 2008.

Andy Burnham, Labour Shadow’s Health Secretary, said the NHS was “heading for the rocks”.

“This report delivers a devastating verdict on the NHS re-organisation David Cameron said would not happen. It has brought the NHS to the brink of bankruptcy by wasting £3 billion,” he said.

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