News / Q1 – detailed figures released

NHS Improvement initially published headline figures for providers' Q1 performance. These revealed a £461m deficit for the sector for the first three months, £5m ahead of plan. Within this it reported the £10m positive variance on the total pay bill.

But more detailed figures have now been published showing that this underspend was the net position of a £72m overspend on agency and contract staff and an £82m underspend on permanent and bank staff. However NHS Improvement said the spend on agency staff was more than £100m less than in the same period in 2015/16. 'This demonstrates that agency control measures introduced last year continue to have a positive impact on the sector,' it's report said. 

Total pay costs are planned to increase by 2.3% according to providers' plans for 2016/17. Although this is partly due to pay inflation, NHS Improvement said a number of providers' pay growth was in excess of inflation and pension effects. The oversight body has already announced that it will be focusing on this issue. 'Over time, we expect to see providers bringing down excess cost growth where possible, including reduction in agency staff, resulting in reduced levels of deficit across the provider sector,' it said.

It added that it had recently asked sustainability and transformation plan leaders to identify existing planned care services relying on 'fragile and temporary workforce' that could be consolidated, changed or transferred to a neighbouring provider.

NHS Improvement had already said that the £461m deficit was after taking account of £450m of sustainability and transformation funds - the whole fund for the year is worth £1.8bn. However providers need to meet financial and operational targets to access the funds and the more detailed figures show that just £340m of the £450m has been allocated. There has been an increase in the unallocated funds - £110m at the end of Q1 compared to a plan of £88m - although these unallocated funds still support the overall financial position. The unallocated total includes funds held centrally and funds related to providers that rejected their control totals or failed to achieve Q1 funding criteria.

NHS Improvement also broke down an £89m overspend on non-pay budgets compared to plan. Some £39m of this was on drugs, with a further £14m on other clinical supplies and services - making up 60% of the total. Providers do not face financial penalties for missing national standards this year as long as they meet agreed performance plans related to STF funding. However providers still incurred £24m of financial sanctions and reported £38m of spending on waiting list initiatives. Providers have also spent £77m outsourcing clinical work to other providers - reflecting constrained capacity and high demand.