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‘Financially unstable’ NHS poses increasing risk of harm to patients

Short-term fixes have made some parts of the NHS seriously financially unstable, according to the National Audit Office (NAO).

The NAO found that, in the financial year ending March 31, 2019, NHS provider trusts reported a combined deficit of £827 million, while clinical commissioning groups (CCGs) failed to balance their books again, reporting a £150 million deficit

The reports, NHS financial management and sustainability and a Review of capital expenditure in the NHS, reveled that the extra money brought in by government to stabilise the finances of individual NHS bodies has not been fully effective and, although the NHS treated more people in 2018-19, it has struggled to transform services.

Patient waiting times continue to get worse, the number of people waiting for treatment continues to increase and trusts in financial difficulty are increasingly relying on short-term loans from the Department of Health and Social Care (DHSC).

The NAO said these loans are effectively being treated as income by these organisations, meaning they have built up a level of unsustainable debts (£10.9 billion in March 2019) which they are unlikely to ever repay.

In the past five years, the government has transferred £4.3 billion from capital to revenue budgets to cope with day to day pressures facing the NHS. It has been unable to clearly say how this has affected patient services and acknowledges its approach to capital funding requires reform.

Over the last three years, NHS providers have requested on average £1.1 billion more for buildings and equipment than their spending limits allow. Fourteen per cent of NHS buildings are older than when the NHS was formed (in 1948) and the backlog of maintenance work to get all buildings up to standard currently stands at about £6.5 billion.

The NAO said the rising demand for capital spending and the growing maintenance backlog means there is an increased risk of harm to patients and is calling on the DHSC, NHS England and NHS Improvement to revamp the way the system is funded.

This includes developing a clear long-term capital funding strategy and establishing a more stable funding system that is not reliant on loans.

Gareth Davies, head of the NAO said: ‘The short-term fixes that were introduced to manage the NHS’ finances are not sustainable.

‘The Department of Health and Social Care continues to provide some trusts with short-term loans just to meet their day-to-day costs with little hope they will be repaid. This is not a sustainable way to run public bodies.

‘To bring about lasting stability, the Department and NHS England and NHS Improvement need to move away from short-term financial fixes and provide longer-term solutions.’

A Department of Health and Social Care spokesperson said: ‘We are enshrining in law our record cash boost for the NHS, worth £33.9 billion extra a year by 2023/24 and we are determined to support the NHS to become financially sustainable.

‘In the past, decisions over health capital have been too piecemeal and uncoordinated so through our Health Infrastructure Plan we are taking a more strategic, planned approach.

‘Since last summer we have significantly boosted capital investment to modernise the NHS estate, tackle critical safety issues and deliver 40 new hospitals over the next ten years, backed by at least £4.8 billion.’

Photo Credit – Pixabay

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