NHS hospitals to spend millions on crippling energy costs this winter

Trusts will have to make up inflation gap by cutting staff – leading to longer waiting times, warns NHS Confederation

Rebecca Thomas
Health Correspondent
Thursday 01 September 2022 00:09 BST
Energy bills are set to double over the winter, eating into budgets that would otherwise have gone on patient care
Energy bills are set to double over the winter, eating into budgets that would otherwise have gone on patient care (PA)

The NHS faces paying millions on rising energy bills for hospitals, with fees set to double in the next year.

Leeds Teaching Hospitals NHS Trust is set to pay £2m extra per month in January and February next year, according to an investigation published in the British Medical Journal.

The report reveals that hospitals have warned that their energy bills are set to double over winter, which will eat into budgets for frontline staff and patient care.

Earlier this year NHS leaders warned that inflation rates were “wiping out” large parts of the NHS budget, while research from the Institute for Fiscal Studies suggested that the sector would need at least an additional £3.4bn this year alone to make up for the loss.

In May this year, NHS England estimated that rising energy prices would cost the NHS an additional £485m.

According to the BMJ’s report, NHS England has set aside £1.5bn from its budget this year to tackle energy costs, fuel costs for ambulance services, increases in private finance initiative contracts and local authority care costs.

John Williams, executive director of finance and deputy chief executive of Sheffield Children’s NHS Foundation Trust, told The BMJ “Unfortunately over recent months the cost of our electricity and gas has increased significantly, as it has for domestic users and other businesses, and is likely to continue increasing by a considerable amount in the future.”

The trust has been able to curtail its costs to some extent because it is locked into current prices with its energy supplier until 31 March 2023. “We budgeted for the additional costs as part of our plan for 2022-23, but ultimately this is still NHS resource that could otherwise have been used to support the delivery of patient care,” Williams added.

Rory Deighton, acute care senior programme lead at the NHS Confederation, said: “This isn’t an abstract problem, as the gap in funding from rising inflation will either have to be made up by fewer staff being employed, longer waiting times for care, or other areas of patient care being cut back.

“The new prime minister must provide a top-up in this autumn’s budget or any emergency budget they hold to make up the shortfall. The NHS needs at least £3.4bn to make up for inflation during this year alone, and that is before we face a winter of even higher wholesale energy prices.

“A failure to properly compensate the NHS for inflation will only heighten pressure on our health service as we move towards a winter that we know will be particularly challenging this year.”

The news comes after The Independent revealed last week that the NHS could risk losing thousands of community healthcare staff over rising fuel costs.

As government-set reimbursement rates do not fully cover petrol costs for community nurses, who rely on cars to see patients, some trusts have had to shoulder the costs themselves.

Earlier this month NHS leaders issued a warning to the government that energy price hikes are set to put pressure on the NHS and social care as patients are becoming more ill.

In a letter to the chancellor, the NHS Confederation said that the NHS spends £1.3bn each year treating preventable conditions caused by cold and damp homes.

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