NHS under pressure with more trusts in the red
The number of NHS trusts in financial difficulty has more than doubled in a year an Audit Commission report warns.The NHS ended 2011-12 with a £1.6 billion surplus- but the differences between solvent trusts and struggling ones is growing, warns the Audit Commission.
Hospitals on the outskirts of London and across the south east are struggling to balance their books, according to the report, while those in the centre of the capital, the Midlands and northern England are tending to fare much better.
Across England, the Audit Commission found 31 ended the 2011-12 financial year with a deficit. That compares with just 13 at the end of the previous year.
The NHS Financial Year 2011-12 report, published today, notes that most trusts reported “an improved financial position”, with the NHS overall recording an unspent “surplus” of £1.6 billion, up on £1.5 billion the previous year.
“However, there is a growing difference between those organisations that are struggling financially and those that are not,” it goes on.
It warns of “stark geographical differences” such as those “between the relatively financially comfortable inner London NHS bodies and financially harder pressed outer London bodies”.
That fact was baldly revealed this summer when South London Healthcare NHS Trust, responsible for three hospitals in south east London and metropolitan Kent, effectively went bust.
It was placed under the authority of a special administrator because it was losing £1 million a week.
The Audit Commission report said the trust had the largest deficit of any NHS body, at £65 million for the year. Its cumulative deficit is £148 million.
Part of the problem stems from two public finance initiatives (PFIs) costing it £61 million a year in interest.
But the report highlights serious financial problems at other hospital trusts on the edge of the capital, notably in north west London.
Senior NHS figures believe long term problems are now coming to the fore. Inner London hospitals have been able to pull in talent, patients and funding due to their reputations, but elsewhere in London and the south east, some hospitals without star attractions have withered.
There are seriously troubled trusts outside the south east too. The report mentioned Peterborough and Stamford Hospitals NHS Foundation Trust, which has a £46 million deficit.
Andy McKeon, managing director of health at the Audit Commission, said: “While nationally the NHS appears to be managing well financially, and preparing itself for the changes and challenges ahead, a number of primary care trusts and trusts are facing severe financial problems.
“The Department of Health and other relevant national authorities need to focus their attention on the minority of organisations whose financial position is deteriorating, and on their geographical distribution and service standards.”
The 31 trusts in deficit include 21 foundation trusts, which are financially independent of the Department of Health, up from six in 2010-11.
The report also found the health service was on track to make £20 billion of efficiency savings by April 2015, and was “in a good position to meet the challenges of spending within its limits”. However, it warned there was “no room for complacency”.
A Department of Health spokesman said: “We know the NHS is facing even greater pressures, not least from rising demand and costs.
“That’s why we are investing an extra £12.5 billion in the NHS, modernising it and improving efficiency while at the same time improving choice for patients to drive up the quality of patient care.”