NHS at ‘tipping point’ after accounts show it plunging £100m into the red

Health service finances will continue to deteriorate further this year and next

The finances of the NHS have “reached a tipping point” and the health service faces a funding crisis before the next general election, an influential think tank has warned.

According to an analysis by the Nuffield Trust, the NHS accounts for 2013/14 show that the body is under “severe financial pressure” and facing a challenge “unprecedented” in its sixty year history.

The charity’s Into the Red report shows that 66 NHS trusts are now in deficit and need hundreds of millions of additional funding, with an overall national deficit of more than £100 million compared with an overall surplus of £383 million last year.

This comes only days after NHS England admitted it had not yet agreed on plans for its £97 billion budget for 2014/15 and its chief operating officer Dame Barbara Hakin said that the NHS is facing “the most difficult year we’ve faced in terms of balancing the plans”.

Nuffield Trust also warned that the NHS finances would continue to deteriorate further this year and next.

Responding to the report, Labour’s shadow health secretary Andy Burnham blamed the “fragile financial position” on David Cameron’s “disastrous decision to break his promise of ‘no top-down re-organisation'".

He said: “Everywhere you look, there are signs of an NHS now heading rapidly in the wrong direction. It is not just standards of patient care that are getting worse but NHS finances are in a dire state."

Video: NHS England Chief Executive - 'we need to be more adaptable'

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 has now 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.”

He added: “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.

“As our panel of health and social care leaders suggests, the immediate choice is rapidly becoming one of financial deficits or scrimping on the quality of care.

”Too many hopes have been pinned on achieving radical system change quickly.

“Such changes take time and their impact is uncertain.”

Part of the spiralling cost that the report identified has been put down to an aging population and the fact that “more is being spent on contract and agency staff, with associated risks to efficiency and quality”.

Part of the spiralling cost that the report identified has been put down to an aging population Part of the spiralling cost that the report identified has been put down to an aging population The report found that spending on contract and agency staff increased by 20 per cent in real terms in 2012/13, with the cost at foundation trusts rising 27 per cent to £300 million in 2013/14.

Lord Howe, Health Minister, said: “These predictions are pessimistic and paint an unrealistic picture of how our NHS is working. We know some parts of the NHS are under pressure due to an unprecedented rise in demand — which is why in very tight economic circumstances, we have taken tough decisions to increase the NHS budget by £12.7 billion .”

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