Health care surveys

This quarter’s report is based on an online survey of the following groups.

73 NHS trust finance directors
51 clinical commissioning group (CCG) finance leads

This report details the results of an online survey of NHS trust finance directors carried out between 3 December 2014 and 17 December 2014. We contacted 252 NHS trust finance directors and 73 responded (29 per cent response rate). The sample included 38 (52 per cent) acute trusts; 23 (32 per cent) community and mental health trusts; 6 (8 per cent) specialist trusts; 1 (1 per cent) ambulance trust and 5 (7 per cent) unknown.

In addition, we contacted 203 clinical commissioning group (CCG) finance leads and 51 responded (25 per cent response rate). Between them these finance leads covered 59 CCGs (28 per cent of CCGs).

Respondents were asked about the financial situation of their organisation and local health economies over the past financial year; the state of patient care in their area; the £20 billion productivity challenge set for 2014/15 and beyond; the financial situation looking ahead to 2015/16; the key organisational challenges facing trusts and CCGs; and the impact of the Better Care Fund on stakeholder relationships between providers and commissioners in local areas.

1. Projected end-of-year financial situation and cost improvement/quality, innovation, productivity and prevention programmes

Projected end-of-year financial balance: 2014/15

Slightly more than 4 out of 10 NHS trust finance directors forecast a deficit for the end of year (2014/15) (Figure 1). This is the highest proportion since we began surveying in 2011. Nationally, as at 30 September 2014, 27 per cent of all NHS trusts were forecasting a deficit for 2014/15 (NHS Trust Development Authority 2014). For foundation trusts, Monitor reports deficits at 81 foundation trusts (55 per cent of all foundation trusts) amounting to £254 million half-way through the year (Monitor 2014).

CCGs’ forecast position is not as bad as providers’: around 10 per cent of CCGs forecast ending 2014/15 in deficit (Figure 2). Nationally, the picture is similar, with NHS England reporting 18 CCGs in deficit in month 6 of 2014/15. NHS England is set to end the year with an overall deficit of £184 million, of which £120 million is for direct commissioning, and £21 million for CCGs (Wheeler 2014).

NHS Trusts
Figure 1: Trends: What is your organisation's forecast end-of-year financial situation?

Respondent comments

  • “'Cash support has been agreed with the NHS Trust Development Authority and the Independent Trust Financing Facility.'”

    Acute trust
  • “'The surplus is only 0.4 per cent and is very dependent on driving down agency costs which is very difficult post-Francis.'”

    General acute and specialised
  • “'[Breaking even is] partly due to some non-recurrent actions so underlying position is into deficit.'”

    Acute teaching hospital

QMR 1-4 based on a panel of 50 trust finance directors

CCG Leads
Figure 2: Trends: What is your organisation's forecast end-of-year financial situation?

Respondent comments

  • “'£3 million (in deficit) with no scope to cope with any increased activity over the winter.'”

  • “'In year roughly break-even but have brought forward surplus from previous years.'”

  • “'Our CCG sits within inner London, and is deemed to be "over capitation" according to the national funding formula. We are also forecasting substantial demographic growth over the next five years. As a result we are likely to see flat or even negative real-terms growth over this period, as our population grows faster than our allocation. Therefore our current surplus is very much non-recurrent and diminishing.'”

51 CCG finance leads answered this question for the 59 CCGs they cover collectively.
CCGs only surveyed since their establishment in April 2013.

In-year financial support

More than 60 per cent of finance directors reported that their forecast financial position depended upon additional financial support through loans and additional finance through Public Dividend Capital (PDC) from the Department of Health or drawing on their own reserves (Figure 3).

NHS Trusts
Figure 3: What does your forecast end-of-year outturn depend on?
18 Additional financial support (eg, additional Public Dividend Capital support, financing facility loans, etc)
22 Use of trust reserves
4 Both
29 Neither

Respondent comments

  • “'The deficit plan has worsened in the forecast figure which has required further cash loans due to CCG penalties, high non-elective activity and associated high agency costs.'”

    Integrated care organisation
  • “'Depends on CCGs giving us the much promised winter resilience funding.'”

    Acute teaching foundation trust
  • “'The trust will literally run out of cash in mid-March 2015 and will require on-going support for the next two to three years. We are joining the swollen ranks of bankrupt acute providers, but we are providing much improved quality of care and just about meeting demand.'”

    Acute foundation trust

Only foundation trusts are allowed to draw down on trust reserves

Cost improvement and QIPP programmes (2014/15)

The average cost improvement programme (CIP) target for trusts for 2014/15 is 4.9 per cent, ranging from 2.4 per cent to 8 per cent of turnover (Figure 4).

The average quality, innovation, productivity and prevention (QIPP) target for CCGs for 2014/15 is 2.7 per cent, ranging from 0.5 per cent to 4.8 per cent of allocation (Figure 4).

There has been a loss in confidence in achieving planned CIPs/QIPPs each year since we began these surveys. Around 53 per cent of all NHS trust finance directors now feel fairly or very concerned about achieving their CIP plans this year (Figure 5).

Similarly, around 42 per cent of all CCG finance leads were fairly or very concerned about achieving their QIPP plans this year (Figure 6).

NHS TrustsCCG Leads
Figure 4: What is your organisation's CIP/QIPP target for this financial year (2014/15) as a percentage of turnover/allocation?
NHS Trusts
Figure 5: Trends: How confident are you of achieving your cost improvement programme (CIP) target?

Respondent comments

  • “'Recruitment of staff, particularly nurses, is proving difficult and therefore high levels of agency premium are being required.'”

    Integrated care organisation
  • “'We'll get close but not quite there.'”

  • “'Delays in service developments from factors outside our control. Cost savings after five years of these are becoming extremely difficult to identify and put through.'”

    Specialist foundation trust

QMR 1-4 based on a panel of 50 finance directors. QMR1 and QMR5 excluded as wording of responses not compatible with other quarters' data.

CCG Leads
Figure 6: Trends: How confident are you of achieving your quality, innovation, productivity and prevention (QIPP) target?

Respondent comments

  • “'Very little of the QIPP target has been delivered in 2014/15.'”

  • “'No hope of achieving, schemes working but swamped by additional acute activity.'”

  • “'Currently forecasting to deliver 70 per cent but able to absorb.'”

51 CCG finance leads answered this question for the 59 CCGs they cover collectively.
CCGs only surveyed since their establishment in April 2013.

The outlook for 2015/16

Although additional funding over current plans for 2015/16 was announced in the Autumn Statement, NHS trust finance directors surveyed after this announcement are pessimistic about their trusts’ financial position next year. Slightly more than three-quarters were concerned about balancing their books next year (Figure 7).

Although more optimistic, just under a third of CCG finance leads felt fairly to very concerned about achieving financial balance in 2015/16 (Figure 8).

NHS Trusts
Figure 7: Looking ahead, how confident are you that your organisation will achieve financial balance in 2015/16?
2 Very confident
12 Fairly confident
3 Uncertain
12 Fairly concerned
44 Very concerned

Respondent comments

  • “'We won't, end of.'”

    Acute trust
  • “'3.8 per cent efficiency unachievable, 50 per cent marginal tariff on specialist growth is suicidal.'”

  • “'This year has been more difficult than we expected – which reflects the cumulative strain of year-after-year efficiency targets set at 4 per cent or higher in practice. Next year's tariff and wider payment system proposals from Monitor/NHS England ignore this cumulative strain completely and place an unsustainable burden of delivery and risk on hospitals generally and – with specific specialised commissioning contract proposals – providers of specialised services in particular.'”

    Multi-specialised large university teaching hospital
  • “'First time I've ticked that box (very concerned) in four years.'”

    Acute teaching foundation trust
  • “'We will be planning a deficit for the first time in 10 years. Cash will run out in 2016/17 if nothing changes re efficiency factors, demand pressures and lack of system change to support service sustainability.'”

    Mental health and community health foundation trust
CCG Leads
Figure 8: Looking ahead, how confident are you that your organisation will achieve financial balance in 2015/16?
6 Very confident
18 Fairly confident
11 Uncertain
7 Fairly concerned
9 Very concerned

Respondent comments

  • “'All hinges on whether the Better Care Fund investment delivers reduced non-elective admissions/or gets sucked into a local authority vortex!'”

  • “'Very confident for 2015/16, with confidence levels diminishing from 2016/17 onwards unless either the allocation formula more equitably reflects the health demand impact of deprivation and high levels of population churn or the NHS settlement is increased in line with costs.'”

  • “'We will have a planned deficit in 2015/16.'”

The £20 billion productivity challenge

With the £20 billion Nicholson Challenge approaching the end of its planned four-year period, views on the risk of achieving this value of productivity improvements are highly pessimistic.

Nearly 8 out of 10 trust finance directors felt there was a high or very high risk of failure to achieve the productivity challenge (Figure 9). CCG finance leads felt fairly pessimistic too – with the majority of respondents assessing the risk of failure as fairly or very high (Figure 10).

NHS Trusts
Figure 9: Trends: The NHS is now in its final year of the so-called Nicholson Challenge. What is your estimate of the risk involved in achieving productivity gains of the value of £20 billion by 2014/15?

Respondent comments

  • “'Under-achievement of demand management and lack of progress tackling underlying population health, are being masked by "sticking plaster" funding solutions in the short term.'”

    Multi-specialist large university teaching hospital
  • “'Much of the delivery to date has been through restrictions in pay. Limited evidence of productivity gains to this value. Foundation trusts generating real efficiencies of around 2 per cent on average.'”

    Mental health

Question not asked before QMR6 or in QMR7

CCG Leads
Figure 10: Trends: The NHS is now in its final year of the so-called Nicholson Challenge. What is your estimate of the risk involved in achieving productivity gains of the value of £20 billion by 2014/15?

Respondent comments

  • “'The financial savings have been made by not giving staff a pay award but genuine productivity gains - nowhere near £20 billion.'”

  • “'But even if we fail we will have achieved 95+ per cent of the target.'”

  • “'Hard to answer this - suspect will be close to £20 billion if include savings from pay restraint, pharmacy products and procurement - but this is not true productivity.'”

CCGs only surveyed since their establishment in April 2013

2. The state of patient care

Around 34 per cent of NHS trust finance directors felt that care in their local area had worsened over the past year (Figure 11).

Similarly, around 31 per cent of CCG finance leads felt that patient care had worsened in the past year; slightly more than a quarter thought it had got better (Figure 12).

NHS Trusts
Figure 11: Trends: Thinking about the NHS in your local area, in the past 12 months, do you think it has got better, worse, or stayed the same in terms of patient care?

Respondent comments

  • “'Acute pressures and staffing issues at an unprecedented low.'”

    Care trust (community and mental health)
  • “'I'm told that the CCGs still have cash, but we haven't seen it.'”

    Acute teaching foundation trust
  • “'The level of delayed transfers of care has increased, A&E activity is up, we are regularly in escalation and all this represents a poorer experience for the patients.'”

    General acute and specialised

Question not asked before QMR6

CCG Leads
Figure 12: Trends: Thinking about the NHS in your local area, in the past 12 months, do you think it has got better, worse, or stayed the same in terms of patient care?

Respondent comments

  • “'Referral-to-treatment and A&E targets are now being missed due to pressures in the system; not seeing additional activity, it's sicker patients, staying for longer and requiring packages/support to leave hospital.'”

  • “'Mainly access is worse. A&E targets suffering. Ambulance waits. Referral-to-treatment performance worse.'”

  • “'Some areas have deteriorated, particularly waiting times for children’s services, but would say the majority of services have remained the same and we are doing more elective procedures.'”

CCGs only surveyed since their establishment in April 2013

3. Organisational challenges

For trust finance directors, staff morale remains at the top of the list of concerns along with the A&E 4-hour wait target and delayed transfers of care (Figure 13).

CCG finance leads continue to be most concerned about A&E and 18-week referral-to-treatment (RTT) waiting time targets. Cancer treatment waiting time targets return to the top of their concerns – reflecting perhaps the continuing deterioration in performance against this target (Figure 14).

NHS Trusts
Figure 13: Trends: Which aspects of your organisation's performance are giving you most cause for concern at the moment? Please select top three

Respondents asked to choose their top three concerns. Figures expressed as a percentage of the total number of concerns in each survey.

CCG Leads
Figure 14: Trends: Which aspects of your organisation's performance are giving you most cause for concern at the moment? Please select top three

Respondents asked to choose their top concerns. Figures expressed as a percentage of the total number of concerns in each survey.

4. Nursing workforce

One result of various reports on the quality of care provided by the NHS (Keogh 2013; National Advisory Group on the Safety of Patients in England 2013; The Mid Staffordshire NHS Foundation Trust Public Inquiry 2013) appears to be a renewed growth in the number of nurses. Between August 2013 and March 2014, the nursing workforce was at its highest level ever (Appleby et al 2014). Yet despite this growth, difficulty with recruitment and retention of permanent staff means that many trusts are relying on temporary/agency staff to maintain these levels (Murray et al 2014).

Despite pressure on finances, just over three-quarters of all trust finance directors indicated a plan to increase the number of permanent nursing staff in the next six months (Figure 15).

NHS Trusts
Figure 15: Is your organisation planning to increase the number of permanent nursing staff in the next six months?
54 Yes
17 No

Respondent comments

  • “'The issue is are there any people to recruit?'”

    Integrated care organisation
  • “'In order to achieve financial balance need to lose 750 staff (mainly clinical) next year.'”

    Community and mental health foundation trust

71 respondents (for whom the question was applicable)

5. Better Care Fund

In relation to agreed Better Care Fund plans, the average target reduction in total emergency admissions for next year (2015/16) for NHS trusts is 3.4 per cent (ranging from 0 to 10 per cent) – similar to plans submitted to NHS England in September 2014. In addition to the 31 responses to this question, 24 finance directors either provided no answer, or stated that they did not know what the target was, and 18 respondents told us this question was not applicable to their organisation (Figure 16).

Slightly more than 8 out of 10 trust finance directors were either fairly or very concerned about achieving their organisation’s reduction target (Figure 17). Although slightly more optimistic, the majority of CCG finance leads (6 out of 10) were also concerned about the ability of their local providers to meet their reduction targets (Figure 18).

Overall trust finance directors felt that the impact of the Better Care Fund on relationships between various Better Care Fund stakeholders in their local areas had been negligible (Figure 19). On the other hand, CCG finance leads were more optimistic with nearly 4 in 10 stating that the relationships in their local areas had improved as a result of the Better Care Fund (Figure 20).

NHS Trusts
Figure 16: In relation to agreed Better Care Fund plans in your area, what is your organisation's target reduction of total emergency admissions for next year (2015/16) as a percentage?

31 respondents (for whom the question was applicable)

NHS Trusts
Figure 17: How confident are you that your organisation will be able to achieve this emergency admissions reduction target in 2015/16?
1 Very confident
3 Fairly confident
4 Uncertain
8 Fairly concerned
30 Very concerned

Respondent comments

  • “'Emergency admissions to our trust have risen by 10 per cent this year. Nobody knows why. Our "conversion rate" from A&E attendances is still among the lowest nationally, so it isn't changes in our clinical thresholds internally!'”

    Multi-specialist large university teaching hospital
  • “'There is no doubt it will not be achieved.'”

    Medium acute
  • “'10 per cent per annum increase seems to be about the norm for the past three years. Can't see this abating without some "BCF Pixie Dust" sprinkled in very large measure.'”

    Acute foundation trust

46 respondents (for whom the question was applicable)

CCG Leads
Figure 18: In relation to agreed Better Care Fund plans in your area, how confident are you that the providers in your area will achieve the total emergency admissions reduction target in 2015/16
0 Very confident
3 Fairly confident
16 Uncertain
17 Fairly concerned
15 Very concerned
NHS Trusts
Figure 19: Thinking about the impact of the Better Care Fund on relationships with other Better Care Fund stakeholders in your local area, do you think they have:
10 Improved
52 Stayed the same
11 Worsened

Respondent comments

  • “'Progress to-date has been through joint working and integration. I am fearful that the next steps will be through "competition and tendering" which may well damage progress so far.'”

    Teaching foundation trust
  • “'I am not sure that this has anything to do with the Better Care Fund but system relationships are better. I would assert that the fact that all organisations are financially challenged is forcing us to come together to find a system-wide solution.'”

    Acute foundation trust
CCG Leads
Figure 20: Thinking about the impact of the Better Care Fund on relationships with other Better Care Fund stakeholders in your local area, do you think they have:
20 Improved
25 Stayed the same
6 Worsened

Respondent comments

  • “'Good relationships and working but financial arrangements are unrealistic.'”

  • “'Better Care Fund (BCF) has been a catalyst in some ways to closer working. but the changing national rules and lack of clarity regarding the requirements eg, seven-day working, protection of social care, has often caused tensions locally.'”

  • “'Has provided more structure to our joint working with the local authority by requiring more detailed plans to be produced.'”

6. The financial state of local health and care economies over the next year

Ninety per cent of trust finance directors were fairly or very pessimistic about the financial state of their wider local health and care economy over the next year (Figure 21).

CCG finance leads are similarly more pessimistic about the coming year, with 75 per cent of respondents feeling fairly or very pessimistic (Figure 22).

NHS Trusts
Figure 21: Overall, what do you feel about the financial state of the wider health (and care) economy in your area over the next year?

Respondent comments

  • “'National context of anachronistic payment by results (PbR) regime, unreflective market forces factor (MFF), lack of understanding of rurality, marginal rate, lack of central understanding of the real costs of quality care and the misguided ignorance of stranded acute costs if activity is moved.'”

    Acute trust
  • “'The system is broken: the tariff doesn't work. Transformation by CCGs is non-existent. Social care has run out of cash and solutions. Better Care Fund is a three cups, one coin illusion.'”

    Acute foundation trust
  • “'The combined system is all well below plan and in a small deficit position overall year-to-date. The efficiency and other challenges for next year mean the system overall will have to deliver at least 50 per cent more CIP than this year to stay in breakeven - this is very unlikely to be achievable.'”

    Acute teaching hospital

Question not asked before QMR3. QMR 1-4 based on a panel of 50 trust finance directors

CCG Leads
Figure 22: Overall, what do you feel about the financial state of the wider health (and care) economy in your area over the next year?

Respondent comments

  • “'Impact of Better Care Fund transfer to prop up adult social care services.'”

  • “'Likely to require system wide financial recovery plan.'”

  • “'Biggest concern is related to the cuts in social care, and the resultant impact on the NHS.'”

References

  • Appleby J, Thompson J, Jabbal J (2014). How is the NHS performing? July 2014. London: The King's Fund. Available at: www.kingsfund.org.uk (accessed on 12 January 2015).

  • Keogh B (2013). Review into the quality of care and treatment provided by 14 hospital trusts in England: overview report. London: NHS England. Available at: www.nhs.uk (accessed on 12 January 2015).

  • Monitor (2014). Quarterly report on the performance of the NHS foundation trust sector: 6 months ended 30 September 2014. London: Monitor. Available at: www.gov.uk (accessed on 12 January 2015).

  • Murray R, Imison C, Jabbal J (2014). Financial failure in the NHS: what causes it and how best to manage it. London: The King's Fund. Available at: www.kingsfund.org.uk (accessed on 12 January 2015).

  • National Advisory Group on the Safety of Patients in England (Chair: Berwick D) (2013). A promise to learn – a commitment to act: improving the safety of patients in England. London: The Stationery Office. Available at: www.gov.uk (accessed on 12 January 2015).

  • NHS Trust Development Authority (2014). NHS trust service and financial performance report for the six month period ending 30 September 2014. Paper D for Board meeting 20 November 2014. Available at: www.ntda.nhs.uk (accessed on 12 January 2015).

  • The Mid Staffordshire NHS Foundation Trust Public Inquiry (Chair: Francis R) (2013). Report of the Mid Staffordshire NHS Foundation Trust Public Inquiry. HC 898-I. London: The Stationery Office. Available at: www.midstaffspublicinquiry.com (accessed on 6 November 2014).

  • Wheeler K (2014). NHS performance report in the period to the end of September 2014. Paper NHSE111402 for Board meeting, 6 November 2014. Available at: www.england.nhs.uk (accessed on 12 January 2015).