News / Monitor presses for ‘more rapid’ transformation as FT deficit rises

NHS foundation trusts must accelerate the pace of transformation, according to Monitor, after their overall financial performance worsened over quarter three.

According to Monitor Q3 figures, the foundation trust sector reported
a third quarter deficit that was five times more than planned. The
sector recorded an aggregate deficit of £321m. This was £67m worse than the month six figures – at Q3, 78 foundations or 53% were in deficit (totalling £530m), of which 60 were acute trusts.

Based on the third quarter performance, foundations are projecting an aggregate outturn of £375m, but the Q3 report warned this could be understated, given the operational pressures and the fact that previous in-year forecasts have been optimistic.

There was a slight improvement in EBITDA (earnings before interest, tax, depreciation and amortisation). But, at 3.8% it remained below the 5% threshold Monitor has historically regarded as the minimum level for financial sustainability. Foundations held total cash of £3.7bn.

Marginal rate emergency tariffs and cost improvement shortfalls were part of the reason for the deteriorating finances, the regulator said. By quarter three, foundations had made total cost savings that were £210m less than planned – 2.6% cost reductions against a planned 3.3%.

But even if planned savings had been achieved, Monitor said it would not have been enough as in-year activity growth and recruitment issues contributed to £400m in unplanned agency staff costs. Foundations saw an 8% rise in A&E attendances. This led to 570,000 emergency admissions – 40,000 more than a year earlier. They also treated 2.3 million elective patients, a 7% increase.

‘Trusts are working harder than ever to overcome the challenges they face while still meeting patients’ expectations for quality care,’ said Monitor chief executive David Bennett (pictured). ‘However, the NHS needs to move rapidly towards more joined-up, efficient models of care if it is to deal with this continuing growth in demand for services.’

NHS Providers head of analysis Siva Anandaciva called for transformation and a multi-year financial planning framework. He said: ‘Quality and patient safety cannot be delivered indefinitely in the current funding environment without leading to financial unsustainability across the whole NHS provider sector.’