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CCGs face ‘unsustainable’ provider bail out pressures

6 July 2012

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Doubts have been cast over CCGs’ ability to create a financially sustainable NHS after a report reveals hospitals received a staggering £253m in bail out funds last year.

Over half of the cash injection (£147m) was made solely to relieve financial pressure. The DH paid out the remaining monies to help trusts implement business changes.

A report published by the National Audit Office found 10 NHS trusts, 21 NHS foundation trusts (FTs), and three PCTs reported a combined deficit of £356m.
It is estimated that without direct financial support, a further 15 NHS trusts and seven PCTs may have reported deficits.

Furthermore, the report noted four FTs and 17 NHS trusts needed bail outs from the DH totalling £1bn during 2006-07 and 2011-12. Of this figure £356m went solely to the now bust South London Healthcare NHS Trust and £195m to Barking, Havering and Redbridge University Hospitals NHS Trust. 

It is anticipated NHS trusts and NHS FTs are likely to need cash injections of around £300m in 2012-13.

Of the PCTs responding to a National Audit Office census, 51%said they were “concerned” about the financial sustainability of their healthcare providers.

“So far the NHS is meeting the challenge of maintaining strong finances in a period of austerity. It is clear, however, that parts of the service are under strain,” said Amyas Morese, Head of the National Audit Office.

“For value for money to be delivered in future, two things are required: firstly, careful management of the risks created by transition to a new commissioning model; and, secondly a coherent and transparent financial support mechanism which outlines when trusts should be supported, or allowed to fail.”

The National Audit Office warned that without “major change” from some providers, the financial pressures on commissioners will only get “more severe”.

More optimistically, only two PCTs are now left battling to clear their legacy debt in time for the commissioning budget handover to CCGs in April 2013.

For the two PCT still showing deficits, the combined outstanding debt at the end of March 2012 was £21m.