• The Nuffield Trust publishes new analysis of the financial position of NHS trusts
• The analysis finds that providers ended last year with a higher overspend and greater levels of unplanned inflation to come
• We say the analysis reinforces the scale of the challenge facing providers to deliver current financial commitments.

The Nuffield Trust has published a new analysis of the financial position of NHS trusts.

The report titled The Bottom Line finds that trusts ended last year with an underlying overspend almost £3bn more than reported.

It also finds that providers will be hit by an additional £500m more than planned in unfunded inflation in 2017/18.

Responding to The Bottom Line report, the head of analysis at NHS Providers, Phillippa Hentsch said:

“This analysis reinforces the scale of the challenge facing providers to deliver current financial commitments.

“The impact of inflation last year suggests that trusts faced an uphill battle to deliver the savings required, and that without one-off savings and £1.8bn of sustainability and transformation funding, the underlying deficit position was actually around £3.7bn, rather than the £791m as reported at year end. 

We need a new approach to tackle the gap between what providers are being asked to deliver and what they are being funded.

“This puts substantial pressure on providers to deliver this year. They will need to cut their operating costs by £3.6bn to balance their books, absorb further increases in demand and costs, at the same time as improve A&E performance and deliver new commitments for cancer and mental health provision. This is while funding for the NHS this year falls from 3.6% to 1.3%.

“With unfunded increases in demand, inflation and costs set to continue, we need a new approach to tackle the gap between what providers are being asked to deliver and what they are being funded.”