Responding to the latest financial reports from the NHS regulators Monitor and the Trust Development Authority, Nuffield Trust Senior Policy Analyst Sally Gainsbury said:
“The head of NHS Improvement warned us these figures would be awful. They are. Just half way through the financial year, NHS hospitals are now £1.6bn in the red. Ahead of next week's Spending Review, today's figures strengthen the argument that this is the toughest financial challenge ever faced by the NHS.
Deliberate government policy to make NHS savings by squeezing the amount hospitals get for each patient they treat means hospitals have been faced with a 3.6 per cent increase in the number of emergency patients, yet only a one per cent increase in what they are paid to treat them.
“In the past Ministers have been able to imply that hospitals experiencing financial difficulties are simply badly run. This argument is harder to make when all but seven acute NHS hospital trusts are in financial deficit.
“As today’s reports make clear, hospitals are having to free up cash to pay staff by cutting back on crucial investments such as building repairs and new equipment. Two drivers particularly stand out, neither surprising. After five years of an NHS pay freeze, hospitals are increasingly forced to pay premium rates to agency nurses and locum doctors who will no longer work for standard NHS wages. At the same time, deliberate government policy to make NHS savings by squeezing the amount hospitals get for each patient they treat means hospitals have been faced with a 3.6 per cent increase in the number of emergency patients, yet only a one per cent increase in what they are paid to treat them.
"We need a realistic, unified plan to address this. It won't be addressed by short term, desperate measures that undercut the health service’s capacity to change such as cutting the public health budget, selling off land at prices we later regret or stopping short investment plans.
“Most worryingly of all, our recent QualityWatch analysis with the Health Foundation showed the financial shortfall may already be resulting in a squeeze on care quality with patients experiencing longer waits for treatment. This points to a period of managed decline in the NHS something more than 8 in 10 of our panel of health leaders warned earlier this year would happen."
Notes to editors
Our QualityWatch 2015 Annual Statement summarises trends in NHS quality of care as part of our joint programme with the Health Foundation. It warned that after a long period of progress, this year the NHS appeared to be struggling to maintain and improve quality.
The Nuffield Trust’s Health Leaders’ Panel consists of 100 managers and clinicians drawn from across the NHS, social care, and local HealthWatch groups. In the latest of our regular surveys, we asked for their views on NHS finances and the realism of planned savings.