Hospitals in England are becoming increasingly dependent on short-term handouts to maintain day-to-day services, putting a question mark over the long-term sustainability of the National Health Service, parliament’s spending watchdog said on Wednesday.
A National Audit Office report also suggested that capital funding shortfalls at hospitals and other parts of the NHS could be putting patient safety at risk.
The findings underline the scale of the task facing prime minister Boris Johnson, who has made the NHS his number one political priority and trumpeted “record” sums going into the service.
Data published during the general election campaign showed hospital performance against key targets at its worst, increasing pressure on chancellor Sajid Javid to allocate further resources in next month’s Budget.
The NAO said that trusts running NHS services had in recent years “become increasingly reliant on one-off savings to deliver efficiency targets”.
Gareth Davies, head of the NAO, said the Department of Health and Social Care provided “some trusts with short-term loans just to meet their day-to-day costs with little hope they will be repaid. This is not a sustainable way to run public bodies”.
To stabilise the NHS, the department, together with the bodies that run the service — NHS England and NHS Improvement — “need to move away from short-term financial fixes and provide longer-term solutions”, he added.
Some trusts rely on borrowing from the department just to meet their running costs, although they had little or no prospect of paying the loans back, said the NAO.
By March 31 2019, outstanding debt issued by the department to these trusts was £10.9bn, up from £8bn a year earlier.
This was “not an acceptable or sustainable approach to the financial management of major public bodies”, said the NAO, noting that the department was now looking at ways to address the issue.
In 2018-19, the 10 worst-performing trusts had a combined deficit of £844m, up from £758m in 2017-18. This amounted to 31 per cent of the combined deficit of all trusts reporting a deficit.
The NAO report noted that over the past five years, the government had transferred £4.3bn from capital to revenue budgets to cope with day-to-day pressures facing the NHS. The government had been unable to clearly say how this had affected patient services and acknowledged its approach to capital funding required reform.
The watchdog added that the growing maintenance backlog for buildings “means there is an increasing risk of harm to patients”.
The NAO concluded the NHS and the health department should overhaul the way the service is funded.
This included developing a clear long-term capital funding strategy and establishing a more stable financing system that was not reliant on loans.
Anita Charlesworth, director of research and economics at the Health Foundation, a charity, said: “Even with the government’s proposed investment, the health service will struggle to maintain current levels of patient care in the face of growing demand, let alone deliver the ambitious improvements to services promised by the NHS long-term plan.”
A Department of Health and Social Care spokesperson said the government was determined to support the NHS becoming financially sustainable. “We are enshrining in law our record cash boost for the NHS, worth £33.9bn extra a year by 2023-24.”
They said in the past, decisions over health capital had been too piecemeal and unco-ordinated and “through our Health Infrastructure Plan we are taking a more strategic, planned approach”.
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February 05, 2020 at 07:01AM
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Warning on long-term financial sustainability of the NHS - Financial Times
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