The NHS is heading into an unprecedented financial crisis and will overspend its budget by at least \u00a37bn next year as the effects of inflation and strikes plunge hospital trusts into alarming levels of debt, according to leading independent experts.<\/p>\n\n\n\n
The problem of soaring deficits is hitting a growing number of trusts across England ahead of a likely general election within 12 months, and will raise further serious doubts about Rishi Sunak\u2019s chances of meeting his pledge to cut record waiting lists.<\/p>\n\n\n\n
In a sign of the extreme pressures, the Manchester Integrated Care System, bringing together trusts and other healthcare providers in Greater Manchester, has brought in Stephen Hay, a troubleshooter from PricewaterhouseCoopers who formerly worked in the NHS, to help sort out its disastrous financial position.<\/p>\n\n\n\n
According to the Health Service Journal<\/em>, NHS Greater Manchester has reported a deficit of \u00a3125m after the first four months of 2023-24, more than \u00a3100m worse than planned.<\/p>\n\n\n\n Insiders say they expect the dire state of trusts\u2019 finances to be high on the agenda at a meeting of NHS England\u2019s board on 5 October.<\/p>\n\n\n\n While inflation and strike costs have worsened the situation, the descent into debt is also traced back to years of pre-Covid austerity. It comes as ministers are trying to claw back extra money that they pumped in during the pandemic to deal with the emergency situation.<\/p>\n\n\n\n Sally Gainsbury, senior policy analyst at the Nuffield Trust, one of the leading authorities on NHS finance, said: \u201cThe English NHS faces an almost impossible struggle to balance its books and cover the costs of care this financial year, as a result of the government\u2019s desire to squeeze its budget back down to the levels expected before extra spending during Covid.<\/p>\n\n\n\n \u201cOfficial figures suggest the service was already on track by the end of May to overspend its budget this year by around \u00a32bn. That figure may well worsen throughout the rest of the year as the cost of covering striking doctors at premium rates ratchets up. In addition, the NHS as a whole is currently looking at a budget for next year which is some \u00a37bn smaller than its current rate of spending.\u201d<\/p>\n\n\n\n In a further escalation of NHS woes, this week will see the first joint strike by junior doctors and consultants, with resulting extra costs of employing agency workers to cover and loss of income from cancelled operations.<\/p>\n\n\n\n Consultants in England will be striking on Tuesday and Wednesday with Christmas Day levels of cover, meaning emergency services will continue but elective surgery will be hit. Junior doctors will join the strike on Wednesday.<\/p>\n\n\n\n Siva Anandaciva, chief analyst at the King\u2019s Fund, said: \u201cThe NHS finance directors I speak to are deeply concerned about how quickly their financial position is deteriorating.<\/p>\n\n\n\n \u201cFinancial deficits in the NHS have real consequences for the care we receive \u2013 as pressures mount, NHS providers are faced with decisions like leaving staffing vacancies unfilled or cutting back on plans to improve how services are delivered. And as hard as it is to believe, it is likely that 2024-25 will be even worse as the number of people requiring care and treatment continues to increase while funding growth starts to slow.<\/p>\n\n\n\n \u201cIt is equally hard to believe that, in an election year, the NHS will be allowed to hit the buffers,\u201d he added.<\/p>\n\n\n\n Much of the pressure on funding has come from the estimated \u00a33.9bn bill for the 5.5% average pay rises awarded recently to NHS staff. The Department of Health and Social Care was only funded by the Treasury for part of this, so will have to make budget cuts, or ask for more.<\/p>\n\n\n\n Saffron Cordery, deputy chief executive of of NHS Providers, said it was vital that the strikes ended soon before more damage was done. \u201cThere is a danger that industrial action becomes part of trusts\u2019 business as usual. Not only does this underplay the growing impact on patients and staff, it also masks the severity of the mounting financial challenges that the NHS is now facing.\u201d<\/p>\n\n\n\n Julian Kelly, the deputy chief executive and finance chief of NHS England, has issued public warnings at several board meetings about the grim financial outlook facing the service this year and in 2024-25 \u2013 and said that it may have to cut planned funding of key areas of care as a result.<\/p>\n\n\n\n Last October, Kelly, a former senior Treasury civil servant, warned that in the next few years the NHS could have to \u201ccompletely revisit\u201d investment in cancer, mental health and diagnostic services. He blamed high inflation for wrecking NHS financial planning.<\/p>\n\n\n\n NHS England has also agreed to make unprecedented \u201cefficiency savings\u201d in return for budget increases from the Treasury.<\/p>\n\n\n\n The Institute for Fiscal Studies said last year that the NHS was facing \u201csmall real-terms budget cuts\u201d in 2023-24 and 2024-25, partly because of inflation but also because its current funding settlement was front-loaded to give it more money early on to help it cope with burdens imposed by Covid.<\/p>\n\n\n\n The financial thinktank pointed out that if those cuts happened, it would be the first time since the early 1950s that the NHS had faced two successive years of real-terms cuts to its income. \u201cIn the absence of additional funding, or a sharp lowering of inflation and cost pressures, the NHS will be asked to do more with less,\u201d said Ben Zaranka, senior research economist at the IFS.<\/p>\n\n\n\n Last week, the government pledged an extra \u00a3200m towards winter pressures, although NHS sources said it would be used to pay agency and other staff to cover for striking doctors.<\/p>\n\n\n\n A Department of Health and Social Care spokesperson said: \u201cWe\u2019re backing the NHS with record funding \u2013 the core NHS budget in England is currently at \u00a3163bn and will increase to almost \u00a3166bn next year \u2013 the highest spend on health and care in any government\u2019s history.<\/p>\n\n\n\n \u201cTo ensure the continuity of patient services, we provide cash support to trusts in financial difficulty. Trusts also work with NHS England to address the underlying issues, improve performance and manage their budgets.<\/p>\n\n\n\n \u201cNHS England can deploy the national recovery support programme to provide intensive support to Trusts in financial difficulty.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" The NHS is heading into an unprecedented financial crisis and will overspend its budget by at least \u00a37bn next year as the effects of inflation and strikes plunge hospital trusts into alarming levels of debt, according to leading independent experts. The problem of soaring deficits is hitting a growing number of trusts across England ahead […]<\/p>\n","protected":false},"author":8,"featured_media":24822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_post_source_name":"","_post_source_url":"","footnotes":""},"categories":[12],"tags":[12487,11941,5249,1221,7331,5110,13108,5222,8440,5262,6725,5257,5196,911,1258,7712,12354,10627,9643,2264,6543,12634,6825,12194,12773,6546,9343,4054,11252,9833,5913,6864,5612,3570,11973,12622,5485,13228,6027,615,10214,5266,1682,5653,1664,5818,8302,9210,8206,12605,3080,8964,10415,594],"class_list":["post-37850","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world-news","tag-agenda","tag-bill","tag-budget","tag-cancer","tag-cash","tag-christmas","tag-civil-servant","tag-covid","tag-crisis","tag-cut","tag-debt","tag-doctors","tag-economy","tag-election","tag-england","tag-english","tag-finance","tag-financial-crisis","tag-fund","tag-government","tag-growth","tag-health","tag-hospital","tag-ifs","tag-increase","tag-inflation","tag-investment","tag-kelly","tag-manchester","tag-meeting","tag-mental-health","tag-ministers","tag-money","tag-nhs","tag-one","tag-overspending","tag-pandemic","tag-patients","tag-pledge","tag-pricewaterhousecoopers","tag-rates","tag-rishi-sunak","tag-sally","tag-social-care","tag-stephen","tag-strike","tag-sunak","tag-surgery","tag-treatment","tag-uk","tag-united-kingdom","tag-winter","tag-work","tag-who"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/posts\/37850","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/comments?post=37850"}],"version-history":[{"count":2,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/posts\/37850\/revisions"}],"predecessor-version":[{"id":39313,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/posts\/37850\/revisions\/39313"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/media\/24822"}],"wp:attachment":[{"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/media?parent=37850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/categories?post=37850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nsemgh.com\/api-json\/wp\/v2\/tags?post=37850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}