Providers welcome “more realistic” 2019/20 financial task but voice two important notes of caution

26 April 2019

A new report by NHS Providers has found that the majority of trusts are feeling more positive about meeting their financial targets in 2019/20, following the agreement of additional funding for the next five years and a new NHS financial architecture.

The report, the latest in an annual series, looks at initial provider reactions to the 2019/20 task they have been set. 2019/20 is a key year for the NHS as it marks the start of the new five year increased NHS funding settlement. It also heralds the start of the new financial architecture with a strong focus on providers returning to financial surplus.

The report, the 2019/20 task for providers, draws on a snapshot survey of trusts focusing on their financial targets for 2019/20. Only a small number of trusts (13%) said they would not be able to sign up to their control total (the financial target set by NHS Improvement for each trust) and a further 28% were unsure. These numbers are an improvement on last year’s results and, together with feedback on progress since the survey, suggest that significantly more providers will agree their control totals than last year.

The report, the 2019/20 task for providers, draws on a snapshot survey of trusts focusing on their financial targets for 2019/20. Only a small number of trusts (13%) said they would not be able to sign up to their control total (the financial target set by NHS Improvement for each trust) and a further 28% were unsure.

   

Providers have also reported that there is an improvement in the level of savings required in 2019/20. The survey shows an average savings level of 3.6% compared to last year’s 5% and much larger numbers of trusts with a savings level of less than 3%. 3.6% represents the current level being delivered and it is important to note that many of the savings are on an unsustainable basis.

The report highlights two issues of concern


Providers of community services funded by local authorities have not been funded, despite public commitments, to meet the costs of the required agenda for change pay rises for their staff on those terms and conditions. This needs urgent resolution.

Providers of community services funded by local authorities have not been funded, despite public commitments, to meet the costs of the required agenda for change pay rises for their staff on those terms and conditions. This needs urgent resolution.

   

There are a number of trusts arguing that their financial task in 2019/20 is significantly more stretching than planned and we need to understand the reasons for this. NHS Improvement are arguing that this is due to trusts failing to deliver sufficient level of 2018/19 savings negatively affecting 2019/20 budgets. The trusts concerned have a different view – that they are being adversely affected by the aggregate impact of some of the micro level changes to the financial architecture.

The report outlines seven ways in which trusts could be more effectively supported to deliver what is needed in 2019/20 and beyond. These include fully funding the Agenda for Change pay rises for those trusts holding local authority community contracts, reviewing the impact of 2019/20 specialist tariff changes and the need to develop a clear, fully funded, plan with the right workforce in place to recover performance in A&E and elective surgery.

Commenting on the report, the chief executive of NHS Providers Chris Hopson said:

“Looking at the wider context of public sector spending, the additional funding allocated to the NHS is generous and will help to improve the financial position of the NHS and the provider sector. Our members are feeling more positive than in previous years about their finances and are doing all they can to successfully deliver their control totals.

Our members are feeling more positive than in previous years about their finances and are doing all they can to successfully deliver their control totals.

Chris Hopson    Chief Executive

“But finances do remain very tight. No-one should pretend that the 2019/20 financial task will be easy to deliver and there are some important issues that national system leaders will need to address to ensure appropriate delivery of the required financial improvement.”

 

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