Ministers are under growing pressure to give the NHS a multibillion-pound emergency cash injection after official figures showed hospitals overspent by £930m in three months and are on course to rack up an unprecedented £2bn deficit by the end of the year.
The losses, which the NHS regulator said reflected a “worst-in-a-generation financial position” for the service, prompted warnings that they could damage the quality of care for patients, possibly as soon as this winter.
Privately, NHS bosses say the attempt by the health secretary, Jeremy Hunt, to rein in the ballooning deficit by reducing spending on agency staff is doomed to fail and that the black hole in the service’s finances could be as big as £2.7bn or £2.8bn when its financial year ends next March.
Hospital bosses, NHS managers and medical groups responded to the grim figures by urging the government to give the service as much as possible of the extra £8bn it has promised by 2020 as soon as possible. There are growing fears that hospitals will run out of money and care standards will deteriorate unless George Osborne, the chancellor, uses his autumn statement next month to provide more cash.
Paul Healy, senior economics adviser at the NHS Confederation, which represents hospitals, said: “We want to see £4bn of the government’s £8bn funding commitment available to the NHS within the next two years.”
Anita Charlesworth, chief economist of the Health Foundation thinktank, said: “Deficits on this scale are unaffordable and unsustainable. Lack of financial control poses risks for both quality of care and government finances.”
Paul Briddock, director of policy at the Healthcare Financial Management Association, which represents NHS finance managers, said the NHS’s financial situation was dire and worsening fast.
“It has now been 188 days since the government vowed to inject £8bn of much-needed extra funding into the NHS and we still await confirmation as to where and when this investment will be made. They now need to keep their promise and make their pledged investment a priority.
“This extra funding is critically important in order to help plug the severe decline in our healthcare finances, which is at unprecedented levels,” he said.
Monitor and the NHS Trust Development Authority (TDA), which oversee foundation trusts and non-foundation trusts respectively, released figures on Friday showing that NHS care providers – mainly hospitals – overspent by £930m in the quarter from April to June this year.
That is more than the £822m overspend that sector ran up in the whole of 2014-15, a figure so large that the Treasury warned the NHS not to exceed it this year.
Monitor, the NHS’s financial regulator, said trusts must make “radical changes to how care is delivered if they are to counter the intense pressure they are under from an increased demand for care and a worst-in-a-generation financial position”.
The 151 foundation trusts it regulates recorded a combined deficit of £445m from April to June and are projecting a £1.01bn overspend by the end of 2015-16. “The current level of deficit is not affordable,” Monitor said.
The 90 trusts that have not achieved semi-independent foundation trust status ended the quarter £485m in the red, £73m worse than expected, the TDA said. It declined to say how big it expects the collective overspend by those 90 trusts to be by the end of the year. But NHS insiders said it was likely to be at least £1bn.
Chris Hopson, chief executive of NHS Providers, which represents most hospitals, ambulance services and mental health trusts, said: “These results are not a surprise. Providers have been flagging their rapidly deteriorating financial position for more than two years now.
“NHS trusts and foundation trusts are doing everything they possibly can to avoid financial deficits, but they are experiencing a triple whammy: rapidly rising patient demand, an extra £2bn unfunded staff cost they have been required to add, and the deepest and longest funding squeeze in NHS history, despite the NHS ringfence.”
The Department of Health said the NHS’s financial performance for the first quarter was often worse than in the rest of the year. A crackdown on hospitals’ spending on both agency staff and management consultants would help to cut costs, it said. Savings identified in a recent report by Lord Carter of Coles, through increased productivity, would also help, a spokesman added.
Heidi Alexander, the shadow health secretary, said ministers were in denial about the gravity of the NHS’s deepening black hole, which their policies had created.
“It is now clear why these figures weren’t released ahead of Tory party conference – they show an NHS in crisis. The alarming deterioration in NHS finances is a direct result of actions this government has taken. Cuts to nurse training places has left the NHS with a shortage of nurses, forcing hospitals to hire expensive agency staff. With a difficult winter approaching, hospitals are facing a stark choice between balancing the books and delivering safe care,” she said.
