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| NHS bosses launch 'reset' plan to tackle £2.45bn deficit | NHS bosses launch 'reset' plan to tackle £2.45bn deficit |
| (about 5 hours later) | |
| NHS bosses have launched a plan to “reset” the health service’s broken finances that will see overspending hospitals taken into financial special measures, as part of a crackdown to tackle a £2.45bn deficit. | NHS bosses have launched a plan to “reset” the health service’s broken finances that will see overspending hospitals taken into financial special measures, as part of a crackdown to tackle a £2.45bn deficit. |
| Five hospital trusts that are set to overshoot their budgets by a wide margin this year, and nine GP-led local clinical commissioning groups (CCGs) that are facing acute financial problems, are the first NHS bodies to be forced into special measures. Their bosses have been given weeks to devise an action plan to reduce overspending or risk being replaced. | |
| Related: Jeremy Hunt has broken NHS funding pledges, report finds | Related: Jeremy Hunt has broken NHS funding pledges, report finds |
| The initiative was unveiled as it emerged that the Department of Health avoided busting its £118.3bn budget in 2015-16 only because it received £417m more than planned in extra national insurance receipts because of an “administrative error” for which it will not be punished. | |
| However, the health secretary is likely to face a parliamentary inquiry into his department’s figures after the Commons public accounts committee accused him of “underhand” behaviour in publishing his department’s figures on the last day before MPs leave for their summer break. | However, the health secretary is likely to face a parliamentary inquiry into his department’s figures after the Commons public accounts committee accused him of “underhand” behaviour in publishing his department’s figures on the last day before MPs leave for their summer break. |
| The Labour MP Meg Hillier, who chairs the committee, wrote to Jeremy Hunt on Thursday, saying: “I write to express dismay that you published your department’s accounts today – the day that parliament rises for summer recess. This does not allow MPs to consider the accounts before recess and smacks of an underhand attempt to cover up the poor state of finances in your department.” | |
| The National Audit Office also criticised Hunt’s department for its failure to come up with “a robust, credible and comprehensive plan to move the NHS on to a more sustainable footing”. | The National Audit Office also criticised Hunt’s department for its failure to come up with “a robust, credible and comprehensive plan to move the NHS on to a more sustainable footing”. |
| The tough action by NHS England and NHS Improvement (NHSI), the service’s financial regulator, is intended to reduce overspending by trusts from a record £2.45bn last year to nearer £250m by the end of this year. | The tough action by NHS England and NHS Improvement (NHSI), the service’s financial regulator, is intended to reduce overspending by trusts from a record £2.45bn last year to nearer £250m by the end of this year. |
| Trusts will be given money from a £1.8bn “sustainability and transformation fund” to help balance their books only if they agree to make significant savings by the end of March 2017 by signing up to a “control total”. The five are among 17 trusts in deficit that have so far refused to agree their total with NHSI. | Trusts will be given money from a £1.8bn “sustainability and transformation fund” to help balance their books only if they agree to make significant savings by the end of March 2017 by signing up to a “control total”. The five are among 17 trusts in deficit that have so far refused to agree their total with NHSI. |
| The five trusts going into financial special measures include Barts Health NHS trust in London, which is both the NHS’s biggest trust and the one that ran up the biggest deficit last year, at £135m. The others are Croydon Health Services, which overspent by £39.8m, Maidstone and Tunbridge Wells (£22.9m), Norfolk and Norwich (£31.1m) and North Bristol (£48m). | The five trusts going into financial special measures include Barts Health NHS trust in London, which is both the NHS’s biggest trust and the one that ran up the biggest deficit last year, at £135m. The others are Croydon Health Services, which overspent by £39.8m, Maidstone and Tunbridge Wells (£22.9m), Norfolk and Norwich (£31.1m) and North Bristol (£48m). |
| “This suite of measures will help ensure that the providers facing the greatest financial challenges are supported to bring about rapid financial recovery, while maintaining or improving quality. This plan is intended to restore financial discipline and ensure ongoing financial sustainability across the whole NHS,” said Jim Mackey, the chief executive of NHSI. | “This suite of measures will help ensure that the providers facing the greatest financial challenges are supported to bring about rapid financial recovery, while maintaining or improving quality. This plan is intended to restore financial discipline and ensure ongoing financial sustainability across the whole NHS,” said Jim Mackey, the chief executive of NHSI. |
| Critics said the plan would fail and lead to job cuts in an already under-staffed health service and the loss of beds or entire units. | Critics said the plan would fail and lead to job cuts in an already under-staffed health service and the loss of beds or entire units. |
| “Simply loading up providers with savings targets and exhorting them to try harder won’t work,” said Saffron Cordery, the head of policy at NHS Providers, which represents hospitals. Singling out heavily overspending trusts would simply stigmatise hospitals that were struggling the most, damage staff morale and make it harder for them to recruit new personnel, she said. | “Simply loading up providers with savings targets and exhorting them to try harder won’t work,” said Saffron Cordery, the head of policy at NHS Providers, which represents hospitals. Singling out heavily overspending trusts would simply stigmatise hospitals that were struggling the most, damage staff morale and make it harder for them to recruit new personnel, she said. |
| There are also serious concerns that cost-cutting on the scale envisaged under the plan could damage patient care. Jennifer Dixon, the chief executive of the Health Foundation thinktank, said the strategy risked a repeat of a care scandal of the scale of that seen at the Mid Staffordshire NHS Trust between 2005 and 2009. | There are also serious concerns that cost-cutting on the scale envisaged under the plan could damage patient care. Jennifer Dixon, the chief executive of the Health Foundation thinktank, said the strategy risked a repeat of a care scandal of the scale of that seen at the Mid Staffordshire NHS Trust between 2005 and 2009. |
| Related: Meeting a patient 16 years after saving his life was deeply gratifying | Related: Meeting a patient 16 years after saving his life was deeply gratifying |
| “Getting the balance right between carrot and stick is critical, as history tells us,” she said. “The Francis inquiry, published only three years ago, describes how radical steps by one NHS hospital – Mid Staffordshire – to improve its financial position had terrible consequences for patient care.” | “Getting the balance right between carrot and stick is critical, as history tells us,” she said. “The Francis inquiry, published only three years ago, describes how radical steps by one NHS hospital – Mid Staffordshire – to improve its financial position had terrible consequences for patient care.” |
| Nigel Edwards, the chief executive of the Nuffield Trust thinktank, criticised the singling out of NHS bodies that were struggling to live within their means. He said: “With almost nine out of 10 acute hospital trusts in deficit at the last count, the idea that this is a problem caused by ‘a few bad apples’, where the management simply doesn’t try hard enough to balance the books, is long gone. | Nigel Edwards, the chief executive of the Nuffield Trust thinktank, criticised the singling out of NHS bodies that were struggling to live within their means. He said: “With almost nine out of 10 acute hospital trusts in deficit at the last count, the idea that this is a problem caused by ‘a few bad apples’, where the management simply doesn’t try hard enough to balance the books, is long gone. |
| “I fear that in order for hospitals to virtually eradicate their debts, as NHS Improvement and NHS England want, the next steps could be a series of brutal service reductions and bed closures – which will shock an unprepared public.” | “I fear that in order for hospitals to virtually eradicate their debts, as NHS Improvement and NHS England want, the next steps could be a series of brutal service reductions and bed closures – which will shock an unprepared public.” |
| The nine CCGs that will also face intense scrutiny of their financial performance and intervention in their running by the two NHS bodies include those in Croydon, North Somerset, Vale of York and Walsall. | The nine CCGs that will also face intense scrutiny of their financial performance and intervention in their running by the two NHS bodies include those in Croydon, North Somerset, Vale of York and Walsall. |
| NHS Clinical Commissioners, which represents CCGs, said some were ending up in the red because the NHS was receiving too little money. “We urgently need a cross-government review into the overall financial position of the NHS and an open debate about what can be realistically delivered within the current level of funding,” said Julie Wood, its chief executive. | NHS Clinical Commissioners, which represents CCGs, said some were ending up in the red because the NHS was receiving too little money. “We urgently need a cross-government review into the overall financial position of the NHS and an open debate about what can be realistically delivered within the current level of funding,” said Julie Wood, its chief executive. |
| The “reset” is part of a longer-term strategy to show that the NHS can put its house in order as a way of persuading ministers to give it more than the £8bn extra by 2020-21 already planned. However, experts say fast-rising demand for care and continued reliance on agency staff means the NHS is unlikely to get back into the black soon. | The “reset” is part of a longer-term strategy to show that the NHS can put its house in order as a way of persuading ministers to give it more than the £8bn extra by 2020-21 already planned. However, experts say fast-rising demand for care and continued reliance on agency staff means the NHS is unlikely to get back into the black soon. |