NHS financial crisis means five-year plan will fail, say hospital finance directors

Every single acute trust in England is predicting a year-end deficit, compared with 77% last year

Hospital bosses have been asked to deliver between two and three per cent a year productivity gains (Getty)

The £8bn cash injection promised by the government is not enough to save the health service, according to a huge majority of hospital and primary care finance directors who believe the NHS five-year plan will fail without more support.

Some 84 per cent said the ongoing budget crisis meant they did not have the resources to implement the plan and that more money was needed on top to prevent services being further damaged.

Hospital bosses have been asked to deliver between two and three per cent a year productivity gains needed to close the expected £22bn NHS funding gap, but just 12 per cent of finance directors at trusts and Clinical Commissioning Groups are confident this is achievable.

The grim predictions were revealed by the Healthcare Financial Management Association (HFMA) in its latest NHS Financial Temperature Check as it called for a “financial Plan B” to fall back on.

A survey of more than 200 finance directors across NHS England revealed for the first time that the vast majority are not confident that changes outlined in the Five Year Forward View, published last October, can be made and are calling for urgent clarification on how the plans will work.

The Five-Year Forward View

The Five-Year Forward View, published last October, was developed by the partner organisations that deliver and oversee health and care services including Care Quality Commission, Public Health England and NHS Improvement.

Patient groups, clinicians and independent experts provided their advice to create a collective view of how the health service needs to change over the next five years if it is to close the widening gaps in the health of the population, quality of care and the funding of services.

Among the changes promised was support for “hard-hitting national action” on obesity, smoking, alcohol and other major health risks; an integrated hospital and primary care provider – Primary and Acute Care Systems – combining for the first time general practice and hospital services; and the redesign of urgent and emergency care services to integrate between A&E departments, GP out-of-hours services, urgent care centres, NHS 111, and ambulance services.

The Forward View sets out a number of ways to improve the NHS, some of which it can do by itself with others requiring new partnerships with local communities, local authorities and employers. The plan said that other “critical decisions”, such as on investment and public health measures, needed “explicit support” from the government.

George Osborne has promised to announce in his autumn statement later this month how and when the £8bn extra NHS funds he promised by 2020 will be delivered.

Simon Stevens, the head of NHS England, revealed last month that the Chancellor had yet to agree to his demands to “front-load” extra health spending to meet demands for a seven day service and relieve other pressures. Almost all the finance directors echoed that call with 94 per cent claiming the full £8bn was needed “no later than the next 18 months”.

Paul Briddock, Director of Policy at HFMA, said: “Our report confirms the financial problems in the NHS are systemic and across the board, with particular and immense pressure being felt on the acute provider side. The scale of deficit reported is unprecedented. The NHS is not living within its means, which has consequences.

“With just days left before the Spending Review, finance directors are telling us they’re not confident in the current plans and need more clarity. While they’re not convinced the promised £8bn in funding is sufficient to address the whole financial problem, it’s clear it is needed now and many want to know if it will come with conditions attached to it. Providers also need realistic efficiency targets with adequate funding for the new demands and cost pressures facing them. The report tells us it’s time to think about what Plan B is, if all else fails.”

The budget crisis is now so bad that every single acute trust in England is predicting a year-end deficit, compared with 77 per cent last year.

However, Lord Carter, the Labour peer charged by the government with improving NHS productivity, said last month he had found “inexplicable and sometimes unacceptable” variations in the way hospitals use resources. He compared the NHS to a range of independent groceries, rather than a supermarket chain, smartly run from a head office.

Lord Carter estimated that, if all hospitals used resources as well as the best, about £5bn could be saved towards the funding gap by the end of the decade.

A Department of Health spokesperson said: “We are committed to the values of the NHS which is why we have invested £10bn to fund the NHS's own plan for the future and spending as a proportion of Government spend has increased in every year since 2010.

“While the NHS is busy, the cost-controlling measures we have introduced like clamping down on rip off staffing agencies and expensive management consultants will help to support finance directors and the NHS to ensure every penny is spent on patient care.”