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The Guardian NHS cash problems will get worse next year, finance chiefs believe

  • 24.06.2014
  • Denis Campbell and Haroon Siddique
Image NHS cash problems will get worse next year, finance chiefs believe

Survey of 188 finance directors found just 12% of hospital finance directors believe their trust will achieve 2015-16 financial targets

The NHS's financial problems are set to worsen next year, with more hospitals ending up in the red, the health services's finance managers have warned.

Growing demand for care, pressure on A&E units and the need to hire more nurses to ensure high standards of treatment are driving up costs for NHS care providers, the Healthcare Financial Management Association found.

Its survey of 188 finance directors of NHS organisations found that just 12% of 129 hospital finance directors believe their trust will achieve its financial targets in 2015-16, while 44% do not.

Similarly, just one in four finance directors in GP-led clinical commissisoning groups, who commission and pay for care, said they would meet their targets.

Professor John Appleby, chief economist at the King's Fund thinktank, said: "This report echoes our own surveys and highlights a truth now widely acknowledged within the NHS – that it is heading towards a financial crisis in 2015-16, if not before." The HFMA's report is published amid speculation that ministers are being lobbied by senior Liberal Democrats to give the service a £2bn bailout this autumn in order to keep it running smoothly.

A mere 2% of hospital finance chiefs and 11% of their clinical commissioning group counterparts think the Better Care Fund – the government's flagship policy to reduce demand for NHS care by looking after more people at home by taking £2bn away from hospitals – will help improve the services they provide when it starts next April, the HFMA found.

Julia Manning, chief executive of 20/20 Health, another thinktank, said the NHS could save billions by reducing fraud and waste and urged politicians to have an honest debate about what the NHS can be expected to deliver.

More positively, 92% of NHS finance bosses expect the quality of care to improve or stay the same over the next few years, despite the expectation of increasingly widespread financial distress.

The Department of Health said it expected the NHS to live within its means. "We've taken tough decisions to protect the NHS budget and the system is on track to make £20bn savings this parliament to reinvest into frontline care. We are confident that the NHS will continue to make the savings necessary to meet rising demand", said a spokesman.

"Trust chief executives need to have a tight financial grip to keep delivering high quality services whilst making the savings necessary to meet rising demand."

Dr Mark Porter, leader of the British Medical Association, accused the coalition of cutting investment in the NHS, fragmenting care and prioritising the tendering of services to private firms. As an example of the "bizarre market culture" that has emerged, he said that in Bedfordshire and Milton Keynes, the management consultant firm McKinsey, carrying out a £3m review of services, has written to 500 providers, including dissolved UK trusts and one in the US offering "faith-based" healthcare, for expressions of interest in running local services.