91% of trusts share STF, but deficit higher than planned

In its quarter four report, the oversight body said 212 of the 234 trusts signed up to individual control totals. It distributed £1.793bn of STF in total – including £1.373bn allocated on the basis of achievement of control total and performance targets.

For performance and achievement of control totals, acute trusts received £1.311bn of STF. This was made up of core STF, finance and performance incentive STF and STF bonus, as well as funds from the general distribution.

Mental health trusts were given £210m and specialist trusts £179m, while community providers received £45m and ambulance trusts £38m.

A general distribution of £410m was made available to trusts that signed up to their control totals. It has been allocated on a sliding scale based on their final distance from the control total target, weighted by their initial STF allocations.

NHS Improvement said, of the remaining £17m, £10m will be distributed between draft and final accounts and £7.3m has been allocated to the Getting it right first time programme.

When the STF was factored in, the provider sector recorded a year-end deficit of £960m – nearly double the planned figure (£496m). The figure is also higher than the 2016/17 sector outturn of £791m.

NHS Improvement said the deterioration in the provider position was due to rising demand, with the winter period particularly punishing for trust finances. In aggregate only the acute sector reported a deficit, with community, mental health, specialist and ambulance trusts recording aggregate surpluses.

Higher than planned emergency activity plus greater bed occupancy increased trusts’ costs compared with income, with additional emergency work being paid at marginal rates.

This non-elective activity also displaced elective work, resulting in lower than planned income from routine procedures.

At the same time, costs were increasing, with trusts spending £1.5bn more than planned on pay and £681m more on non-pay costs. The latter included an additional £173m buying healthcare from non-NHS providers – demonstrating the capacity constraints on NHS providers in Q4, NHS Improvement said.

Agency staff spending was below plan (£2.4bn rather than £2.5bn), but trusts spent £976m more than planned on bank staff.

NHS Improvement chief executive Ian Dalton (pictured) said: ‘Hundreds of thousands more patients have been to A&Es this year but the NHS did not buckle under the pressure. Despite epic challenges, NHS staff up and down the country displayed incredible resilience and saw more patients than ever before within four hours. ‘ 

He added: 'More than two thirds of providers ended the year on budget or better than planned. Given rising demand and record vacancies, this is an important achievement.'

NHS Providers’ chief executive Chris Hopson said: ‘The figures reflect the worrying gap between what the NHS is being asked to deliver and the resources available following almost a decade of austerity. And we must remember that the figure masks the full underlying deficit which is much higher, and how reliant the NHS continues to be on one-off savings.’

He highlighted the financial pressure due to increased emergency activity and lower elective income. In the circumstances, he said: ‘The overall deficit of £960m was a creditable performance. Once again, the NHS has also outperformed the wider economy on productivity. Spending on agency staff fell by more than £500m compared with the previous year, and trusts delivered cost improvements equivalent to £3.2bn (3.7% of trust turnover) – £110m more than 2016/17.’