This year the Department of Health and Social Care’s (DHSC) budget increased by around £1.7bn for 2018/19. While this is a welcome increase, much of the funding is already "locked up" in the delivery of other priorities and cannot be redeployed specifically for winter.
Faced with unprecedented levels of demand across the system, trusts are struggling to contain costs and deliver savings. This paints a worrying picture as providers head into the winter months.
The King’s Fund reports that since 2011/12 more than £3bn has been provided at short notice to help the NHS through the winter. Last year an extra £337m was allocated in the autumn budget. While it was difficult for trusts to make the most of these late cash injections, the loss of dedicated winter funding has restricted what they can do, as the extra money allocated to commissioners has been absorbed into general budgets.
Faced with unprecedented levels of demand across the system, trusts are struggling to contain costs and deliver savings. This paints a worrying picture as providers head into the winter months.
Sustainability funding
An additional £650m has been set aside this year in sustainability funding for the sector, which now stands at £2.45bn. While this represents welcome extra funding for providers, it is also money trusts are unable to spend in-year and cannot be spent on forthcoming winter preparations.
In recent years, if a trust fails to either agree or meet its control total, sustainability funding has been withheld. For acute providers 30% of their sustainability funding is also contingent on A&E performance. Looking ahead to 2018/19, The King’s Fund quarterly monitoring report (The King's Fund, 2018) revealed a significant proportion of trusts will be relying on sustainability funding to achieve their year-end forecast. However, within the first three months of the year £185m worth of sustainability funding was withheld from the sector, £48m more than planned. Withholding this money in-year will have a significant impact on cash flows. In order to pay staff and keep the lights on this winter trusts may increasingly turn to borrowing money, delaying payments or raiding capital budgets.