On the day briefing: Q3 finances and performance
Today NHS Improvement (NHSI) released the quarter three (Q3) finance and operational performance figures for the provider sector. These figures cover the nine-month period ending 31 December 2016. This briefing summarises the key headlines from those figures as well as our view on what they mean. It also details the preliminary results of a survey of finance directors carried out by NHS Providers earlier this month. The survey sought views on the 2016/17 financial position as well as the longer-term outlook for 2017/18. The full findings of the survey will be published later this month.
NHS Providers' view on the Q3 finance and performance figures
The Q3 figures show the considerable progress trusts have made this year to cut last year’s record £2.45bn deficit. Despite this, NHS trusts are still £300m behind the target of reducing the provider sector deficit to £580m by the end of March. Continued lost income from cancelled operations and higher than expected spending, both resulting from record winter demand, have put greater pressure on NHS trust finances.
NHS trusts continue to do everything they possibly can and providers are committed to financial improvement. Of those 228 trusts who accepted their control totals, 56 of them are forecasting to deliver an end of year position that is better than their control totals (excluding the support of STF). In addition to this, more than two thirds of trusts have reduced their agency expenditure since the introduction of new rules in October 2015, and year-to date agency expenditure was £505m lower than in the same period last year.
Despite doing everything they possibly can, NHS trusts are £300 million behind the target of reducing the provider sector deficit to -£580 million by the end of March. This is largely because of winter pressures. Chris Hopson, chief executive
But these actions are outweighed by the impact of winter pressures, and most notably delayed transfers of care, which have risen by 28% since last year. Coupled with this, NHS trusts continue to be set unrealistic cost improvement plan targets, with a projected savings forecast which is £229m below plan.
The challenge of delivering the financial plan cannot be underestimated given the operating environment. The underlying financial position is not sustainable; two thirds of finance directors we surveyed said a significant amount of savings their trusts have made are one-offs that cannot be relied upon in the future. Demand pressures are unlikely to ease in Q4 and it is simply not sustainable to require NHS trusts to make up the shortfall between what is being asked of the NHS and the funding available.
The full briefing is available to download below. If you have any feedback or questions regarding any of the content in this briefing please contact Adam Wright, policy officer - finances.