News / NHS 'on track' for QIPP targets as Q3 reveals rising surplus

By Seamus Ward

Primary care trusts had delivered two-thirds of their forecast QIPP (quality, innovation, productivity and prevention) savings three months before the end of the 2011/12 financial year, according to figures from the Department of Health.

PCTs are responsible for reporting QIPP savings and at the end of quarter three, they forecast 2011/12 QIPP savings of £5.8bn, a marginal reduction on the forecast £5.9bn at Q2. They reported the delivery of £3.9bn of QIPP savings to date – 68% of the forecast annual savings. As with the previous quarter, the acute sector was the single biggest contributor to the savings – £1.9bn in the year to date, with rest of the savings spread across areas such as community services (£355m) and prescribing (£245m).

Monitor said foundation trust cost improvement plans (CIPs) were 7.5% below plan at Q3. However, 2011/12 plans were more ambitious than before and trusts were performing better against them than in the past two years (when they were 9% behind plan at this stage). CIPs of 3.9% have been achieved in the period.

NHS deputy chief executive David Flory said the service had built on the good progress reported at Q2. It was making efficiencies and had maintained the quality of care for patients. But he added that organisations must retain their focus on delivering the remaining 32% of savings. It was equally important that they plan for QIPP delivery in 2012/13.

'The NHS is on track to deliver its estimated efficiency savings for this financial year, but we cannot be complacent. It is vital that the NHS does not take its eye off the ball. The NHS is performing well to meet future challenges and must continue to do so,' he added.

Health secretary Andrew Lansley said efficiency did not mean cuts but getting the best value. 'I would like to thank everyone in the NHS for their hard work in achieving £3.9bn savings so far this year while keeping waiting times low, performing more tests and reducing infections further,' he said.

Other figures published by the Department suggest the NHS is on target for a surplus more than £300m higher than forecast at the beginning of the year. The Quarter showed PCTs and strategic health authorities forecasting a combined surplus of almost £1.5bn, an improvement on the £1.2bn forecast at Q2. NHS trusts excluding FTs forecast an overall surplus of £30m (£6m less than at Q2). Monitor recorded an aggregate year-to-date surplus of £326m in foundation trusts.

Four PCTs forecast a gross deficit of £82m (three PCTs with an aggregate deficit of £56m in the previous quarter), while eight trusts forecast a year-end deficit of £190m (seven with £186m at Q2).

Monitor said the Q3 figures showed the foundation trust sector continued to cope well in the face of financial challenges, with trust finances ahead of plan. But it was concerned about the small number of trusts with a significant deficit and the downward trend in EBITDA (earnings before interest, tax, depreciation and amortisation) over the past four years. Margins were at 6.1%, compared with 7.5% in 2008/09.

Monitor chief operating officer Stephen Hay said robust financial planning and better delivery of cost savings had left the sector in a strong financial position.

'However, this should be seen in the context of a significant downward trend over the past four years. Foundation trusts will need to continue to deliver sustainable cost savings in a challenging financial climate,' he said.

'We're very clear with them that they need to do this while maintaining their focus on providing quality services.'