A report published today by the National Audit Office concludes that the NHS’s financial situation is unsustainable, with substantial deficits in some parts of the system being offset by surpluses elsewhere. Although the recent NHS long-term plan sets out a prudent approach to reaching balance, the report warns that a number of risks remain to the delivery of the plan.
It found that CCGs had a combined deficit of £213m with 75 CCGs reporting overspends in 2017-18. The trust sector is experiencing similar difficulties, with a forecast deficit of £558m in 2018-19 based on the first six months of the year.
“We recognise the overall findings from the NAO that the NHS’s current financial situation is unsustainable. Even though clinical commissioning groups (CCGs) delivered an unprecedented level of efficiency savings in 2017/18 – 3.1% of their allocations, equating to over £2bn – due to systemic pressures they are increasingly financially challenged.
“As we move towards more collaboration and system working, it is vital that financial and payment structures support this and resolve perverse incentives that encourage a focus on individual organisations as opposed to system working. This is something we have been calling for on behalf of our members for some time and were pleased to see the first steps towards payment reform included in the Long Term Plan.
“In 2019/20 commissioners will face the considerable challenge of delivering system financial balance whilst reconfiguring local structures and delivering new clinical priorities as set out in the Long Term Plan. This comes alongside a 20% reduction in running costs, which means that clinical commissioners will have to do more for less, and continue to make difficult decisions to ensure the best value for the patients and local populations they serve.”
Amyas Morse, the head of the NAO, said: “The promise of longer-term sustained funding growth for NHS England, together with a long-term plan, is a positive and welcome development. This should enable a more strategic approach to spending and we can expect to see a less turbulent financial context than in the last few years, if the funding is spent wisely.”