NHS trusts deliver financial reality check

In a survey by NHS Providers involving half of the English provider sector, 85% of trusts aid they were not confident that their system would deliver a balanced position this year. NHS reality check: the financial and performance task for trusts also reported that 90% of providers were not confident of ending the year in a better financial position than in 2021/22.

It said the current pressures facing the service were the result of long-term fault lines. These included a decade of average real-terms growth that was less than half the long-term average level. There was also a growing mismatch between capacity and demand, significant staff vacancies and an underfunded social care system.

NHS Providers interim chief executive Saffron Cordery (pictured) said the report was a reality check on what is possible in terms of recovery within the current budget. ‘It is time to be honest about what [trusts] are up against,’ she said. ‘Obstacles include continuing severe pressures on urgent and emergency care, the persistent threat of Covid-19, workforce shortages, discharge delays and overstretched social care services.

‘Understandably, everyone wants to move on from the pandemic and see normality restored,’ she added. ‘Trusts are doing all they can to do that and more, transforming the health and care system to tackle current pressures and meet future needs. But people should know, it will take time.’

The survey highlighted three specific cost pressures for the current year. Covid-19 funding to integrated care boards has been cut by 57% compared with 2021/22. A fall in funding was expected as the Covid-related operational pressures reduce. However, in some areas the costs have not fallen as quickly as anticipated. The report said there were still pockets of Covid pressures with trusts in some locations caring for double or triple the number of Covid-positive patients in hospital compared to the first wave of the pandemic.  

Pay is another big concern. The government has proposed a 2%-3% pay rise for agenda for change staff. With inflation running at 9%, NHS Providers said this would represent a significant real-terms pay cut if implemented, yet there was not sufficient funding in the current settlement for higher increases. ‘It the upcoming staff pay award exceeds the allocation already built into the annual uplift, trusts must be given immediate assurances that additional costs will be centrally funded,’ the report said.

The NHS is focused on elective recovery with 6.4 million people on the waiting list at the end of March. However trusts are worried about funding tied to the recovery programme. Current funding in local contracts is based on trusts delivering 104% of 2019/20 elective activity levels. Shortfalls against this target will see trusts losing funding at a marginal rate of 75% of national tariff prices. Just 37% of survey respondents who provide elective care said they were confident of hitting the 104% target.

The survey was carried out before the announcement by NHS England and NHS Improvement in May of an additional £1.5bn to cover inflationary pressures. NHS Providers said this was welcome and would help offset inflationary pressures. But it was not an additional uplift on top of the NHS settlement – instead requiring funds to be redirected from elsewhere in the NHS England budget.

There were also concerns about the adequacy of system capital envelopes.

Operationally, the majority of trusts are on track to treat all patients waiting over 104 weeks by July 2022, with systems now focusing on waits over 78 weeks, the report said. However, confidence levels in meeting targets for 2022/23 and beyond vary. The survey found that 67% of acute trusts were confident of eliminating long waits of over 52 weeks by March 2025, but 42% were not confident of hitting recovery targets to reduce long waits in 2022/23.

Just under half of trusts are confident of meeting the diagnostic target, which requires 95% of tests to be carried out within six weeks by March 2024. And 60% of trusts believe they will hit the cancer target of 75% of urgent referrals receiving a diagnosis or having cancer ruled out within 28 days.

The report also highlighted challenging levels of efficiency savings needed in the current year. According to trusts, they would need on average to deliver more than 4% efficiency savings to meet government requirements. This is significantly higher than the 2.8% average level delivered by the surveyed trusts in 2019/20. And 73% of trusts said that a realistic and achievable target was between 1% and 2.5%.