NHS lacks a convincing plan to fill £22bn black hole, report warns

A new report from the Public Accounts Committee has warned that the NHS in England lacks a convincing plan to fill a £22 billion funding black hole within the next five years.

The report outlines that the financial health of NHS trusts and NHS foundation trusts has ’significantly worsened in the last three financial years’. Trusts reported a net deficit of £843 million in 2014–15, which the Committee highlights represented a severe decline from the £91 million deficit in 2013–14, and £592 million surplus in 2012–13.

The report criticises the Department of Health, NHS England and NHS Improvement for not taking action quick enough to prevent these financial issues, and warns that the target of trusts to make four per cent efficiency savings is ‘unrealistic’.

The Committee welcomed the government’s recent action to tackle over spend on agency staff, but warns that ’the NHS will not solve the problem of reliance on agency staff until it solves its wider workforce planning issues’.

It recommends that the government should ensure that all trusts in deficit have a recovery plan by the start of the 2016-17 financial year, and stresses that efficiency targets must be informed and realistic.

Meg Hillier, chair of the Committee, said: “Central government has done too little to support trusts facing financial problems with the result that overall deficits are growing at a truly alarming rate. Crude efficiency targets have made matters worse.

“Without urgent action to put struggling trusts on a firmer financial footing there is further serious risk to services and the public purse. There is a long way to go before the taxpayer will be convinced there is a workable and properly costed plan in place to secure the future of our health service.”

The Committee expects the Department of Health, NHS England and NHS Improvement to report back in September to outline the progress that has been made in addressing the recommendations of the report.