Huge hospital overspend to be unveiled
An unprecedented overspend by hospitals and other NHS trusts is expected to be announced later by health bosses.
The figures for England from the regulator NHS Improvement cover the 2015-16 year, which finished in March.
By December – the three-quarter mark – hospital, ambulance and mental health trusts were already £2.2bn in the red.
That is predicted to have grown in the last three months of the year with experts warning the pressure it puts hospitals under has an impact on care.
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The figures account for about two thirds of the entire £116bn health budget – they do not cover GPs, training budgets, public health budgets held by councils or any unspent money held by local health managers.
That means the Department of Health could still balance the books when the overall accounts are released later in the summer.
But the expected huge overspend still has the potential to impact on services.
This year the NHS is getting £3.8bn extra as part of the spending review settlement. Some £1.8bn has already been set aside for hospitals to cover their deficits, but anything in excess of that will mean they will be under more pressure to make savings as the year goes on.
Anita Charlesworth, of the Health Foundation think-tank, said the mood in the NHS “could not be bleaker”.
“The level of deficits in terms of scale and how many hospitals are in deficit is unprecedented. It puts organisations under stress, which makes them fragile and risky.
“There is pressure on recruitment, pressure on management and that has an impact on services. We are already seeing waiting time targets being breached.”
She also said capital budgets – money which has been set aside for building projects and maintenance – were being raided.
Does it matter if the NHS overspends?
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LUHUANFENG
Hospitals and other health services are not like businesses. They’re not going to just go bust, as the government can always step in.
But the financial problems do matter. The deficits being racked up are massive. You probably have to go back to a very different era – the early 1950s – to find a similar scale of overspending, and that led to charges being brought in for spectacles, dentistry and prescriptions.
This time the impact is likely to be felt in terms of what doesn’t happen. The Department of Health has made it clear the overspends will not be simply written off. Instead, hospitals (most of the overspends are concentrated among them) will have to use the extra money they have got this year to pay off their debts.
If that happens on a large scale, it puts the NHS on a back foot. Recruitment freezes are introduced, building projects are stopped or delayed and services are scaled back. These measures are already being taken, but more of them will just make it more difficult for the NHS to meet its waiting time targets and provide high-quality care.
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When the three-quarter year figures were released, just seven of the 138 hospital trusts were in surplus.
Overspending on agency staff was highlighted as one of the major problems as well as rising demand for services.
Last year NHS trusts finished over £800m in the red – with the health service as a whole balancing the books only after a cash injection from the Treasury and by raiding the capital budget.
The rest of the UK does not release equivalent figures as hospitals are not run as autonomous organisations as they are in England.