NHS cannot meet savings target, finance chiefs warn

Healthcare Financial Management Association urges the government to go beyond £8bn pledge – and sounds the alarm on NHS deficits

By Seb Whale

18 Nov 2015

The NHS requires more than the £8bn pledged by the government and will not deliver on the £22bn of savings it has vowed to achieve, NHS finance chiefs have warned.

The Conservatives promised to invest an additional £8bn in the health service as part of their election manifesto.

But the Healthcare Financial Management Association (HFMA) has urged the government to grant the NHS more than the planned funding or face measures including rationing of patients’ access to treatment.

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NHS managers have previously called for the funding to be “frontloaded” ahead of George Osborne’s Spending Review next week in order to pay for establishing new services outside hospitals.

Research by the HFMA also found that the NHS is heading for a deficit larger than the forecasted £2bn shortfall for this financial year. The group predicts that nearly all of England’s 156 NHS trusts are set to end the year 2015-16 in the red – the first time that will have happened in the health service’s history.

HFMA’s director of policy Paul Briddock said: “With just days left before the Spending Review, finance directors are telling us they’re not confident in the current plans and need more clarity.

“While they’re not convinced the promised £8bn in funding is sufficient to address the whole financial problem, it’s clear they need it sooner rather than later.”

Some 84% of NHS finance directors surveyed by the HFMA believe they cannot deliver the Five Year Forward View – the NHS’s plan for securing its future outlined by chief executive Simon Stevens.

And nearly 90% of finance directors believe they cannot realise the annual productivity savings envisaged in the plan which are essential to meeting the £22bn of “efficiency savings” by 2020 pledged by Stevens.

But a Department of Health spokesman insisted the government was still focused on ensuring the NHS delivered the £22bn of savings while managing with the pledged £8bn in additional funding.

“We are committed to the values of the NHS which is why we have invested £10bn to fund the NHS’s own plan for the future and spending as a proportion of government spend has increased in every year since 2010,” he said.

“While the NHS is busy, the cost-controlling measures we have introduced like clamping down on rip-off staffing agencies and expensive management consultants will help to support finance directors and the NHS to ensure every penny is spent on patient care.”

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