NHS providers to start next year underwater financially, despite new money

Sally Gainsbury responds to quarterly figures from healthcare regulator NHS Improvement.

Press release

Published: 29/11/2018

Commenting on quarterly figures from healthcare regulator NHS Improvement, Nuffield Trust Senior Policy Analyst Sally Gainsbury said:

“As NHS leaders prepare to publish their Long-Term Plan for the health service, today’s figures underline just how serious the financial and staffing problems facing NHS organisations are.

“The projected deficit of £558m reported today includes £2.45bn of emergency funding, as well as some very optimistic assumptions about extra efficiencies to be made. So despite making some impressive savings so far this year [1], NHS providers are struggling to reduce the underlying gap between their regular, predictable income and their day-to-day running costs. We calculate this underlying deficit will be around £4.2bn by the end of the financial year [2].

“This means that NHS providers will be starting next year - when the Long-Term Plan and new NHS money kicks in - still underwater financially. NHS trusts will need a substantial recurrent funding boost, as well as additional emergency support for at least the next three years, limiting the funds available for expensive new commitments in the Long-Term Plan.

“What’s more, today’s figures reveal that NHS vacancies still remain at around 100,000 and we are suffering from troubling shortages in nurses and doctors, with 10,000 of these vacancies not even being filled by temporary staff. This raises real concerns about patient safety and suggests there is unsustainable pressure on NHS staff.”

Notes to editors

  1. Today’s figures show that NHS trusts made efficiency savings of £1.2bn in the first 6 months of the financial year, equivalent to cutting their operating costs by 2.7%. However £314m of those savings were one off, and so do nothing to improve the underlying deficit.
  2. The underlying deficit is calculated by combining the reported deficit (which we forecast will be around £900m by March 2018) with the effects of one-off savings and emergency funding boosts. Our analysis suggests this will is likely to be around £4.2bn by the end of this financial year, only slightly reduced from the £4.3bn NHSI say providers faced at the end of the last financial year.
  3. Overall vacancies for NHS staff stood at 102,821, with around 10,000 unfilled vacancies for doctors and nurses.
  4. The Nuffield Trust is an independent health think tank. We aim to improve the quality of health care in the UK by providing evidence-based research and policy analysis and informing and generating debate.