News / Radical action needed

As it published the financial position for the first quarter of 2015/16, the regulator said foundations recorded an aggregate deficit of £445m. This was £90m more than planned.

The NHS Trust Development Authority (TDA) said the NHS trust sector reported an aggregate deficit of £485m against an initial planned deficit of £412m at quarter one.

According to Monitor, 118 of the 151 foundation trusts were in deficit at the end of Q1, with a total gross deficit of £485m, offset by an aggregate £40m surplus in 33 trusts. The EBITDA (earnings before interest, tax, depreciation and amortisation) margin of 0.9% raised concerns about the long-term financial sustainability of the sector. Monitor said, more worryingly, acute foundation trusts reported an aggregate negative EBITDA (-0.3%) for the first time

Chief executive David Bennett said: ‘Monitor has taken action to help the sector improve operationally and financially and we continue to offer our support and guidance. But the FT sector must realise a radical and lasting change is required.’

The TDA said NHS trusts spent more than £380m on agency and contract staff in the first quarter, but this was expected to slow as new rules limiting this spending begin to take effect.

In all, 72 of the 90 NHS trusts were in deficit, including all but one of the 54 acute trusts. Acutes accounted for most of the aggregate deficit – at just under £475m.