The NHS is poorly placed to deal with continuing austerity and could experience a funding crisis before the 2015 General Election, new Nuffield Trust research reveals. On the same day, a new panel of 100 health and social care leaders raises concerns about the future sustainability of the NHS and social care.
The Nuffield Trust research, Into the Red?, is the most comprehensive look yet at how the finances of the hospitals and commissioning groups that make up the NHS in England have held up under austerity between 2010 and 2014.
Based on audited accounts, it finds that until last year the NHS was coping well with an unprecedented squeeze on funding due to increasing demand on the health service and the consequences of public sector austerity since 2010. But provisional data from the 2013/14 financial year shows that cracks are starting to show in a system under severe financial pressure.
In the results of a major new panel of health and social care leaders published today by the Nuffield Trust, over two-thirds of professionals felt that NHS providers would have to go into deficit in order to provide a high quality service, and almost half consider that the NHS will no longer be free at the point of use in ten years' time. Despite these concerns, a third said NHS care had improved over the past year.
Key findings from Into the Red? include:
- NHS and Foundation trusts as a whole were at least £100 million in the red in the last financial year - with 66 trusts in deficit in 2013/14. This compares to a surplus of £383m in 2012/13 and 45 trusts in deficit in that year. Deficits were most concentrated in London and the Midlands, and were predominantly in the acute hospital sector.
- Commissioners found it harder to balance their budgets in 2013/14 than in previous years. Despite an overall underspend, 19 Clinical Commissioning Groups ended the last financial year in deficit and NHS England projected a £377m overspend on specialised services.
- Spending on agency staff has soared across the NHS. In 2012/13 the cost of temporary staff grew by 20%. This trend continued into 2013/14 with Foundation Trust spending on contract and agency staff increasing by £300m (27%).
- There has been a marked shift from NHS to private and voluntary sector community healthcare provision. Spending on private community provision rose by a third between 2011/12 and 2012/13, but spending on private providers in acute hospitals has slowed.
With austerity set to continue, Into the Red? reveals worrying signs that the long-term resilience of the NHS is under significant strain:
- Despite government requiring efficiency savings of 4% across the NHS, both commissioners and hospital trusts are making smaller and smaller savings each year. In 2013/14 CCGs made savings of less than 2% of their total spend, whilst Foundation Trusts saved 3% compared with 3.4% in 2012/13.
- Demand for hospital services is on the rise - emergency admissions, outpatient attendances and day case episodes have all been increasing. This meant that spending on hospital services grew by £1.1bn in 2012/13, whilst spending on general practice fell by £10 million. Hospital spending increased further in 2013/14.
In the poll of 100 health and social care leaders, the first of four to be published by the Nuffield Trust in the run-up to the election, 70 percent of respondents agreed that NHS providers will need to go into deficit in future in order to provide a high quality service if current levels of funding remain. Almost half (47%) thought it was either very or quite unlikely that the NHS would remain free at the point of use in ten years' time.
Andy McKeon, Senior Policy Fellow at the Nuffield Trust and report co-author said:
"The NHS has risen to the challenge of living within its means over the past three years. But it has now reached a tipping point. Our analysis shows just how poorly placed it is to cope with the squeeze still to come.
"Demand for NHS services shows no signs of abating. With hospital finances increasingly weak, growing pressures on staffing, and the goal of moving care out of hospitals and into the community proving elusive, the NHS is heading for a funding crisis this year or next.
"As our panel of health and social care leaders suggests, the immediate choice is rapidly becoming one of financial deficits or scrimping on the quality of care."
The Nuffield Trust analysis concludes that reforms to NHS services by adopting new technologies and promoting out-of-hospital care could help put it on a more sustainable financial footing in the future, but expecting this to happen in the next few years and without additional funding is unrealistic.
"Too many hopes have been pinned on achieving radical system change quickly. Such changes take time and their impact is uncertain." Andy McKeon added.
RCGP response to Nuffield Trust report 'Into the Red?'
The Royal College of General Practitioners (RCGP) has responded to the Nuffield Trust report 'Into the red? The state of the NHS' finances' launched today.
Dr Maureen Baker, Chair of the RCGP, said: "We are shocked and dismayed by these figures which show that, yet again, patient care provided in general practice is being sacrificed at the expense of shoring up our hospitals.
"Demand for hospital services is growing - but so is the demand for general practice and less and less is being spent on our service.
"General practice is already teetering on the brink of collapse due to NHS funding falling to an historic low. The fact that it has dropped - and been allowed to drop - yet again pushes us even further towards the precipice and it is our patients who are bearing the brunt.
"While the fall in funding might look small in percentage terms, this represents around £10m which could have been more wisely spent on GP services and cutting waiting times for patients to see their GP.
"The way to relieve pressure on hospitals is to invest in general practice. This will allow GPs and their teams to care for patients in the community, closer to home, where care is more cost-effective and where patients want to be cared for.
"General practice conducts 90% of all NHS patient contacts for just 8.39% of the overall budget - the lowest share on record.
"This is despite family doctors making 340m consultations a year - 40m more than five years ago - and our research has shown that GPs are routinely working 11 hour days and seeing up to 60 patients in a day to try and meet the demand
"GPs across the UK are doing their very best to see their patients when they want to be seen, but there is a chronic shortage of GPs and we cannot cope with the rising demand of a growing and ageing population, with patients routinely presenting with multiple long-term conditions, whilst funding and resources continue to fall
"According to our own research, 27m patients will have to wait more than a week to see a GP this year alone.
"RCGP analysis also shows that three extra hospital consultant posts are now being created for every one more GP across the country.
"In 2002, there were 27,200 full-time GPs, compared to 24,800 hospital consultants, yet by 2012 there were 31,700 GPs compared to 38,200 hospital doctors - 6,500 more hospital doctors than family doctors.
"General practice is the cornerstone of the NHS. If it crumbles, the rest of the health service will follow behind it and the consequences for patients will be disastrous.
"More funding for general practice would allow us to recruit more GPs and offer more appointments so that patients are not forced to turn to other parts of the health service. This would mean fewer emergency admissions, fewer A&E attendances, and an NHS that is fit for purpose for the future and that can deliver the care that our patients need and deserve.
"This is why the College and the National Association for Patient Participation (N.A.P.P.) have launched Put patients first: Back general practice, calling for general practice to receive 11% of the NHS budget by 2017."