• NHS Improvement release financial performance data for Q1 of 2017/18
• Figures show that trusts are forecast a year end deficit of £523m and have achieved a 22% reduction in agency staff spend from the same period last year
• We say trusts are putting in a huge amount of work to control costs and improve financial position, but caution is required as we approach winter.

NHS Improvement has released financial performance figures for quarter one of 2017/18.

The first quarter results forecast a sector-wide deficit of £523m by the end of the year, against an income of around £80.5bn. 

For the quarter, overall spending on agency staff was 22% lower than during the same period last year.

Responding to the financial performance figures for Q1, the chief executive of NHS Providers, Chris Hopson said:

“These latest figures show the continued progress NHS trusts are making in reducing the large deficits of the last three years. Trusts are broadly on track to achieve the year end target of a £500m deficit, a continuation of last year’s improvement when the provider deficit fell to £791m from the high watermark 2015/16 deficit of £2.45bn.

"Trusts are putting a huge amount of work into controlling costs, increasing productivity and improving efficiency while continuing to provide outstanding patient care against record levels of demand and growing staffing pressures. In particular, the figures show how trusts have continued to reduce spending on expensive agency staff – this has come down by more than a fifth since the same period last year.

There is a need for caution and much of the provider sector’s financial performance over the rest of the year will be determined by how the NHS performs this winter.

“However, as with last year, there is a need for caution and much of the provider sector’s financial performance over the rest of the year will be determined by how the NHS performs this winter. Last year, trusts ended up spending significantly more than planned on extra capacity to deal with record winter demand, and they lost income from elective operations they needed to cancel. These pressures are often now present throughout the year, not just at winter time.

“Despite this progress, the underlying scale of the challenge remains unsustainable. NHS funding increases have fallen from last year’s 3.6% to just 1.3% this year. This means providers have to absorb 5% increases in demand and costs, cut operating costs by £3.6bn and meet a 4.2% savings target that no other advanced Western health system has ever consistently delivered. All at the same time as improving A&E performance, delivering new commitments for cancer and mental health provision and investing for transformation and to keep the NHS estate up to date. This is mission impossible.