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Providers quarter two deficit hits £1.6bn


20 November 2015

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NHS providers – including both trusts and financial trusts – reported a deficit of £1.6bn so far this year, according to the quarter two reports (Q2) from Monitor and the Trust Development Agency (TDA).

Nearly 80% of NHS providers, or 190 out of 241, reported a deficit for the second quarter of the financial year.

NHS providers – including both trusts and financial trusts – reported a deficit of £1.6bn so far this year, according to the quarter two reports (Q2) from Monitor and the Trust Development Agency (TDA).

Nearly 80% of NHS providers, or 190 out of 241, reported a deficit for the second quarter of the financial year.

This is £358m worse than planned at the beginning of the year, despite providers making £1.2bn worth of cost savings.

In response, Richard Murray, director of policy at think-tank The King's Fund, said: “Today's figures show the NHS is in the grip of an unprecedented financial meltdown.

“Deficits on this scale cannot be attributed to mismanagement or inefficiency. Quite simply, it is no longer possible for the vast majority of NHS providers to maintain standards of care and balance their budgets.”

During the same time, many providers have struggled to meet national targets, and a specific problem was delayed transfers of care – where medically fit patients cannot leave hospital because the care they need is not yet in place.

This is having a negative impact on NHS organisations meeting other standards, especially in A&E, while spending on agency staff is continuing to have a extremely detrimental effect on their financial position, the report stated.

In terms of possible solutions, Monitor and TDA said Trusts are starting to implement their recommendations, including measures to cut agency costs, capping consultancy spending and supporting providers to find savings.

However, Murray added: “This takes the NHS into uncharted territory, with providers now forecasting an end of year deficit of £2.2 billion. Although some of this can be clawed back by raiding capital funds and cutting central budgets, it is increasingly difficult to see how the Department of Health can stay within its spending limits this year.

“If the Chancellor needed a wake-up call ahead of next week's Spending Review, this is it. The scale of the deficits provides yet more evidence that the additional funding promised by the government is needed sooner rather than later. If this is not forthcoming, the government should be honest with the public that the outcome will be an accelerating decline in standards of care.”

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