NHS trusts under growing pressure to make savings

Trusts are grappling with growing pressure from the top to increase savings in the approaching financial year, a survey by NHS Providers has revealed.

The trade association sent out its survey to finance and commercial directors across NHS trusts and foundation trusts in England in February and received responses from 99 providers, which equates to around 42 percent of the provider sector.

It says the findings show that trusts have been asked by NHS Improvement to deliver more demanding savings under the cost improvement programme (CIP), which reflects their costs as a percentage of annual revenue. Trusts which fail to agree or fall short of these "control totals" will be unable to access additional funds to support transformation.

According to the survey, the average cost improvement required of trusts this year was 4 percent. It also showed that, for trusts that have agreed control totals for next year (70 percent) the average CIP requirement was 4.2 percent, while for those that hadn’t (30 percent) it was 6.4 percent.

Also of note, 5 percent of trusts taking part in the survey were asked to make savings in excess of 9 percent.

Trusts that did not agree to savings targets described them as being impossible, unrealistic, undeliverable, unachievable and unaffordable, NHS Providers said.

"The fact that NHS Improvement concluded that 30 percent of providers need to make a 6.4 percent cost improvement clearly demonstrates that the service is in for a very bumpy year indeed financially. Under such circumstances it is hardly surprising, from a governance perspective, that these providers felt unable to agree to control totals," noted NHS Providers’ finances policy advisor, Edward Cornick.

"Some will say tough savings are now up to the NHS to deliver. But they must understand exactly what that means. We are entering a year when providers are being asked to make savings that are simply of a different magnitude than at any other time in the NHS's 70 year history."

Special measures
Findings of the survey were published as NHS Improvement announced that three more trusts - St George’s University Hospital NHS Foundation Trust, North Lincolnshire and Goole NHS Foundation Trust and University Hospitals of North Midlands NHS Trust - have been put in financial special measures.

The trusts "haven't kept up with their agreed control totals and are forecasting a combined deficit of £145 million," it said.

"We know patient demand is high and that these are difficult times for the NHS, which is why it is even more important that NHS trusts keep a strong grip on their finances. We know that trusts meeting their financial plans also provide better quality services to patients," noted Jim Mackey, chief executive of NHS Improvement

"Financial special measures has already saved the NHS around £100 million in 2016/17. The three trusts being put into financial special measures are not on course to meet their savings targets and financial special measures will be an effective way of supporting them to significantly improve".

However, Niall Dickson, chief executive of the NHS Confederation which represents health service organisations across England, Wales and Northern Ireland, said "this is yet more evidence that NHS organisations are working flat-out to sustain their services but that finances are incredibly tight".

He warns that there is "a real danger that vital efforts to transform care and make it more sustainable will be derailed because it takes all our effort to maintain current care and balance the books.

"There is now a growing recognition that money alone will not solve the problem and that the health and care system needs to be redesigned, as it is not fit-for-purpose and it is time we all admitted it."