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More NHS trusts ‘struggling’ despite a combined underspending

20 September 2012

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The NHS has built up cash reserves approaching £4bn thanks to underspending and surpluses, the Audit Commission claims.

During the NHS financial year 2011.12, primary care trusts (PCTs), strategic health authorities (SHAs) and NHS trusts reported a combined underspend and surplus of £1.6bn.

In fact, a report by the Audit Commission shows most NHS trusts reported an improved financial position last year.

Yet, the number of NHS trusts and foundation trusts in deficit rose to 31 – up from 13 in 2010/11, the majority of which are located in London and the south-east.

As a region, London came out as a mixed bag in the report.
Seven of the country’s nine PCTs with an under-spend of over £10 million were in London, as were the three PCTs that found themselves in deficit (Barnet PCT, Enfield PCT and Haringey PCT).

London is also home to the NHS trust with the highest deficit – South London Healthcare Trust – currently standing at £61m.

Overall healthcare organisations in inner London fared better financially than those in outer London.

In all, 39 NHS trusts reported a poorer financial position in 2011/12 than in the previous year, and 18 NHS trusts and foundation trusts have received financial support from the Department of Health.

“Overall, a combination of underspend, surpluses and non-recurrent spending in 2011/12 have given the NHS approaching £4 billion in uncommitted finances, providing financial room for manoeuvre in the future,” said Andy McKeon, Managing Director of Health at the Audit Commission.

“The NHS has also delivered the first tranche of its £20 billion savings required by 2014/15.  While nationally the NHS appears to be managing well financially, and preparing itself for the changes and challenges ahead, a number of PCTs and trusts are facing severe financial problems.

“The Department of Health and other relevant national authorities need to focus their attention on the minority of organisations whose financial position is deteriorating, and on their geographical distribution and service standards.”

Dr Peter Carter, Chief Executive & General Secretary of the Royal College of Nursing (RCN), said he has been “any evidence” that the NHS surplus is being reinvested into patient care and as such, called for a “rigorous” analysis of NHS finances.

The report claims overall NHS savings programmes have had “no material effect” on the numbers of front-line staff, while acknowledged the mass redundancies of management staff under the government’s health reforms.

However, it is also claimed the productivity of acute and specialist trusts “does not appear to have increased” and there is also “little sign” of services moving out of hospitals and into the community.