Funding to help NHS progress instead spent on coping with existing pressures

Additional funding, aimed to help the NHS get on a financially sustainable footing, has instead been spent on coping with existing pressures, the National Audit Office (NAO) has said.

The NHS received an additional £1.8 billion Sustainability and Transformation Fund in 2016-17 to give it time to set itself up to survive on significantly less funding growth from 2017-18 onward. It was also intended to give it stability to improve performance and transform services, to achieve a sustainable health system, the NAO said.

The fund has helped the NHS improve its financial position from a £1,848 million deficit in 2015-16 to a £111 million surplus in 2016-17. Within the overall position, the combined trust deficit reduced to £791 million in 2016-17 from £2,447 million in 2015-16. There has also been an improved underspend of £154 million across clinical commissioning groups, yet 62 groups reported a cumulative deficit in 2016-17, up from 32 in 2015-17.

Despite these improvements, the NHS is struggling to manage increased activity and demand within its budget and has not met NHS access targets. Furthermore, measures it took to rebalance its finances have restricted money available for longer-term transformation, which is essential for the NHS to meet demand, drive efficiencies and improve the service.

On top of its funding, many trusts are receiving large levels of in-year cash injections, most of which are loans from the Department, which have worsened rather than improved their financial importance.

The NAO has made a number of recommendations to the Department, NHS England and NHS Improvement, which includes moving further towards aligning nationwide incentives, regulation and processes, as well as reassessing how best to allocate the sustainability and transformation funding.

Amyas Morse, head of the National Audit Offie, said: “The NHS has received extra funding, but this has mostly been used to cope with current pressures and has not provided the stable platform intended from which to transform services. Repeated short-term funding-boosts could turn into the new normal, when the public purse may be better served by a long-term funding settlement that provides a stable platform for sustained improvements.”