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The Telegraph Scale of NHS financial crisis revealed amid looming staff cuts

  • 31.01.2014
  • Laura Donnelly, Health Correspondent
Image Scale of NHS financial crisis revealed amid looming staff cuts

NHS hospitals face having to cut staff and services amid the worst financial outlook for almost a decade - with almost half forecasting they will end the current financial year in debt, records show.

Board reports covering all 145 hospital trusts in England disclose that 44 per cent expect to end the year in deficit - with a combined “black hole” of more than £330 million between them.

Senior NHS officials said organisations are struggling to cope with pressures on Accident and Emergency (A&E) departments, with hospitals recording their highest ever levels of emergency admissions in the run-up to Christmas.

Many organisations are spending heavily on agency staff, with a 60 per cent rise in the total bill for locum doctors in the past three years, with doctors being paid up to £1,500 a shift.
The figures suggest widespread financial problems, which have not been seen in recent years, since a crisis in 2006, which led to mass job losses, cuts to hospital services, and the resignation of the NHS chief executive.

Many of the worst problems are in London, where Barts Health NHS trust is predicting a deficit of £50m by the end of the financial year, and has drawn up plans to reduce the numbers of nursing staff on the wards.

Organisations in the Midlands and the East area also struggling with high levels of debt, the records show.

Latest figures from Monitor, the regulator for foundation trusts, and the NHS Trust Development Authority, which supervises non-foundation trusts, disclose that in total, 64 of England’s 145 hospital trusts expect to end the year in the red. The forecasts for foundation trusts were drawn up six months into the financial year, while those for non-foundation trusts were drawn up four months before the year ends in March.

Although the NHS has been protected from savings cuts, the demands from an ageing population and increasing costs of drugs mean services are struggling to meet demands on them, experts say.

Services have also been told to put aside £15bn in efficiency savings by 2015, in order to cushion themselves against further rises in demand.

Senior officials have drawn up long-term plans to reorganise hospitals, and say some centralisation is needed to improve care and reduce costs.

But the long-term plans will not be able to tackle immediate pressures on hospitals, which senior doctors say have been fuelled by a loss of faith in services outside hospitals.

Earlier this week, figures revealed that the number of elderly patients going to casualty has risen 93 per cent in the past five years, while the overall number of patients attending has risen by more than 50 per cent.

Prof John Appleby, chief economist for the Kings Fund, said: “The squeeze of finances has been pretty relentless and the NHS is operating within very tight margins. A lot of the trusts now forecasting deficit are not ones which have previously done so.”

He said he did not think the public would tolerate major cuts to services.

“In the long run I think the only answer is more money,” he said. “I don’t think the public would be prepared to see major cuts - I think they will want to see more money go in.”

Patients' groups expressed fears that too much money had been wasted during “boom years” of investment, leaving hospitals struggling to balance their books.

Katherine Murphy, chief executive of the Patients Association, said the NHS had wasted billions of pounds on "mismanagement, endless reorganisations and failed IT projects" forcing cutbacks to patient care which she feared would worsen.

She said: "We receive many calls from patients and the public about poor care due to shortages of staff and long waiting times. Any day extra a patient has to wait for a hip replacement is a day too long when they are in pain."

Dr Peter Carter, general secretary of the Royal College of Nursing, said he feared job cuts. He said: "This is a mess which was wholly avoidable and could jeopardise patient care. The NHS must not under any circumstances be allowed to return to a boom and bust cycle of financial planning.”

Andy Burnham, shadow health secretary said last year's reorganisation of the NHS had distracted services from their priorities.

He said: "David Cameron promised not to cut the NHS but that is precisely what is happening across the country as hospitals fail to balance the books. As financial panic spreads, patients will be denied treatments and wards will cut back on staff."

Julia Manning, from thinktank 2020Health
said: “These figures demand an honest response from our politicians. They reflect an unsustainable hospital system which we can’t simply expect the tax-payer to bail out.”

She said politicians needed to have an honest debate about the challenges for the NHS, and to make radical changes.

Mrs Manning said: “Economists are warning us there won’t be enough tax-payers to fund services for the elderly and we carry on with too many hospitals. MPs should be showing the way forward, not dodging hard decisions to ensure the NHS is still there for us in 10 years time.”

A Department of Health spokesman said: "We have been tough in insisting on compassionate care and Trusts are no longer skimping on nursing which has inevitably put pressure on finances. But we are putting recovery plans in place for any Trusts in financial difficulty."

A spokesman for Monitor said: “Unlike NHS trusts, which are expected to break even every year, NHS foundation trusts have more freedom to run their own affairs. Monitor assesses the financial health of foundation trusts on their performance in the medium term and does not require them to break even each year. They are therefore allowed to run a short term deficit, and from a business perspective this can be an acceptable method of managing their finances.”

Some of the worst:
NHS hospital trusts forecasting deficits of at least £10m
Barts Health trust £50m
University Hospitals of Leicester trust £40m
University Hospital of North Staffordshire trust £28m
Barking, Havering and Redbridge University Hospitals trust £24m
Mid Essex Hospital Services trust £20m
Mid Yorkshire Hospitals trust £20m
North West London Hospitals trust £20m
South London Healthcare trust (dissolved) £20m
East Sussex Healthcare trust £19m
Croydon Health Services trust £18m
Barnet and Chase Farm Hospitals trust £17m
The Princess Alexandra Hospital NHS trust (West Midlands) £17m
United Lincolnshire Hospitals trust £17m
Plymouth Hospitals trust £13m
North Cumbria University Hospitals trust £12m
Wye Valley trust £11m