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CCG and Trust deficit has increased three-fold on last year, says NAO


22 November 2016

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NHS bodies accumulated a net deficit of nearly £2 billion in 2015/16, which the National Audit Office has said is “not sustainable” in a new report.

The NAO revealed that commissioners, trusts and foundation trusts reported a combined deficit of £1.85 billion, a greater than three-fold increase in the deficit position of £574 million reported in 2014-15.

NHS bodies accumulated a net deficit of nearly £2 billion in 2015/16, which the National Audit Office has said is “not sustainable” in a new report.

The NAO revealed that commissioners, trusts and foundation trusts reported a combined deficit of £1.85 billion, a greater than three-fold increase in the deficit position of £574 million reported in 2014-15.

Furthermore, 32 clinical commissioning groups reporting cumulative deficits in 2015/16, up from 19 in both 2014/15 and 2013/14.

According to the report, the NHS entered the current financial year from a worse than expected starting point.

This year’s plans were based on trusts ending 2015/16 with a combined deficit of £1.8 billion.

The fact that trusts ended the year with an even larger deficit means that they will, overall, need to make more savings than planned to reach the intended starting position.

Together, the Department, NHS England and NHS Improvement estimate that they can make £6.7 billion of efficiencies by capping public sector pay, renegotiating contracts, implementing income-generating activities, and reducing running costs.

They estimate that trusts and commissioners can make a further £14.9 billion by moderating the growth in demand for healthcare services and achieving 2% productivity and efficiency improvements.

Prof John Appleby, chief economist of the Nuffield Trust, said: “The only conclusion one can draw from the NAO’s findings is that at present there simply isn’t enough money in the system for the NHS.”

He added: “In addition, the £669 million overspend projected for the end of the current financial year masks the fact an extra £1.8 billion has been pumped into the Health Service.  That money was originally intended to help Trusts change the way they deliver services to patients, but has ended up being almost entirely used to bail out overspent hospitals.

“The current efforts to improve productivity will probably yield results in the long term, but the short-term pressures are becoming overwhelming, and our expectation is that the Health Service will not meet its overspend targets this year”.

Amyas Morse, head of the NAO, said: “The Department, NHS England and NHS Improvement have put considerable effort and funding toward stabilising the system, but have a way to go to demonstrate that they have balanced resources and achieved stability as a result of this effort. Therefore, value for money from these collective actions has not yet been demonstrated.”

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