Health care surveys

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

100 NHS trust finance directors
53 clinical commissioning group (CCG) finance leads

This report details the results of an online survey of NHS trust finance directors carried out between 5 June 2015 and 22 June 2015. We contacted 254 NHS trust finance directors to take part and 100 responded (39 per cent response rate). The sample included 44 acute trusts; 35 community and mental health trusts; 6 specialist trusts; 3 ambulance trust and 12 unknown.

In addition, we contacted 202 clinical commissioning group (CCG) finance leads and 53 responded (26 per cent response rate). Between them these finance leads covered 58 CCGs (27 per cent of CCGs).

Respondents were asked about their organisation’s financial situation and the financial outlook for their local health economy over the past financial year; the state of patient care in their area; the financial situation looking ahead to 2016/17; the key organisational challenges facing trusts and CCGs; and workforce issues following recent announcements regarding proposed new controls on agency staff.

1. Projected end-of-year financial balance: 2015/16

Nationally, NHS foundation trusts’ financial performance declined significantly in 2014/15, for the first time ending the year with an overall net deficit of £349 million. A total of 77 foundation trusts reported a deficit for 2014/15, totalling £636 million (Monitor 2015). For NHS trusts, at the end of 2014/15 the NHS Trust Development Authority reported deficits in 40 trusts and an overall net deficit of £472.6 million (NHS Trust Development Authority 2015). NHS England reported that CCGs in aggregate ended the year (2014/15) with a surplus of £151 million (0.2 per cent of allocation) (NHS England 2015).

Against that backdrop, our first survey of 2015/6 shows a deepening crisis across trusts, with around two-thirds (66 per cent) of all providers forecasting a deficit for the end of year (2015/16) and 89 per cent of acute trusts expecting to overspend. (Figure 1). This is the worst position for trusts since we began the survey. On the other hand, only around 10 per cent of CCGs forecast an overspend by the end of 2015/16 (Figure 2). NHS Providers indicate that overspending by all trusts could amount to more than £2 billion by April 2016 (Wintour and Campbell 2015). Following the latest forecast deficit from all foundation trusts of £989 million for 2015/16, Monitor has warned the sector that their freedoms could come under pressure unless they demonstrate faster improvements in productivity (Monitor 2015).

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

Respondent comments

  • “'Budgeted a deficit of £10 million, but slow start to cost improvement programme and burgeoning agency costs suggest our outturn will significantly exceed this.'”

    Large acute teaching foundation trust
  • “'While the trust is in surplus this will be below the level required to sustainably pay off our loans as we continue to invest in transformation and plan for the impacts of delays in meeting planned recurring savings.'”

    Mental health trust
  • “'Commissioners simply passing on all efficiency pressures to providers, take no account of relative efficiency of different providers, protect CCG bottom lines by pushing trust sector into deficit. NHS England clearly running the show. Monitor weak, ineffective and allowing this to happen.'”

    Ambulance trust

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

  • “'In surplus but already warned this is in jeopardy if financial risks conspire. A very tight position.'”

  • “'CCGs are obligated to make a 1 per cent surplus as part of their business rules.'”

  • “'We have a planned 1.2 per cent surplus requirement, but currently still have significant unmitigated risk in the plan (in excess of 1.2 per cent).'”

  • “'Have submitted a plan to deliver a 1 per cent surplus under pressure from NHS England but think our original plan to deliver only 0.5 per cent was more realistic and would have increased the likelihood of the CCG being able to pump-prime service changes.'”

53 CCG finance leads answered this question for the 58 CCGs they cover collectively.
CCGs only surveyed since their establishment in April 2013.

2. In-year financial support

Just under two-thirds of finance directors reported that their forecast position this year would include additional financial support, either loans, additions to their Public Dividend Capital (PDC) from the Department of Health, or drawing on their own reserves (Figure 3).

NHS Trusts
Figure 3: What is your forecast end-of-year outturn likely to depend on?
26 Additional financial support (eg, additional Public Dividend Capital support, financing facility loans, etc)
44 Use of trust reserves
39 Neither

Respondent comments

  • “'The Public Dividend Capital we are receiving is linked to an acquisition that we have made and was planned as part of that transaction.'”

    Acute trust
  • “'We are experiencing a transfer of financial risk from commissioners to providers. The Enhanced Tariff Option arrangements have prompted our commissioner to significantly increase the risk within CQUIN (commissioning for quality and innovation).'”

    Community and mental health foundation trust
  • “'Reserves are long gone. The ability to deliver even the planned substantial deficit relies on being able to recruit more nurses and free elective beds from acute medical patients (given the more than doubling of delayed transfers of care for medically fit for discharge patients).'”

    Acute trust

Only foundation trusts are allowed to draw down on trust reserves. Respondents allowed to select more than one form of additional financial support.

3. Cost improvement and QIPP programmes (2015/16)

The average cost improvement programme (CIP) target for trusts for 2015/16 is 4.5 per cent, ranging from 1.5 per cent to 9 per cent of turnover. The average quality, innovation, productivity and prevention (QIPP) target for CCGs for 2015/16 is 2.7 per cent, ranging from 0.8 per cent to 5 per cent of allocation (Figure 4).

Confidence in achieving planned CIPs/QIPPs has been reducing each year since 2011. Around 40 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 30 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 (2015/16) 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

  • “'We currently have a recurrent gap in the cost improvement programme of £1.2 million which has been funded non-recurrently by commissioners.'”

    Mental health and community foundation trust
  • “'We will achieve the corporate and procurement elements but the scope for operational savings given both the pressures on beds and focus on inputs (ie, nurse levels) is rapidly diminishing.'”

    Acute trust
  • “'All the low hanging fruit has gone. Maybe non-recurring will allow us to get somewhere near but that is just transferring the issue to another year (as we did from last to this). Whether this financial year or next we will run out of this ability – but will still have a deficit this year of £3.5 million despite a 6.1 per cent cost improvement programme.'”

    Ambulance trust
  • “'While we have reasonable confidence in the current year, we currently have little planned for 2016/17. As our current transformation plans reach their conclusion, significant risks are building for ongoing delivery at this level.'”

    Mental health trust

QMR1-4 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

  • “'Non-elective schemes are not delivering the required return on investment. Schemes are impacting on demand but not reducing demand under the 2013/14 activity levels which is a requirement of the non-elective QIPP schemes.'”

  • “'QIPP target has increased as a result of NHS England instruction to plan for more activity.'”

  • “'The delivery of acute-related QIPP is the greatest area of concern.'”

53 CCG finance leads answered this question for the 58 CCGs they cover collectively.
CCGs only surveyed since their establishment in April 2013.

4. The state of patient care

Around a third of both NHS trust finance directors and CCG finance leads felt that care in their local area had worsened over the past year (Figures 7, 8). For finance directors, this is broadly consistent with views expressed in previous surveys.

NHS Trusts
Figure 7: 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

  • “'Overall the cracks are starting to show. The impact of reductions in social services are increasing pressures on A&E, and non-elective activity is pushing up. Pressures on voluntary organisations are increasing and, while in secondary care we are managing to deliver to required standards, the system is increasingly stretched.'”

    Mental health trust
  • “'Acute bed pressures, waiting times and social care (local authority budget) reductions are impacting the whole system. For example, nursing homes are re-registering as care homes due to unsustainable fees and trouble attracting sufficient nursing staff.'”

    Community and mental health provider
  • “'In 2014/15 commissioners in local area all in surplus (£103 million) but providers almost 100 per cent in deficit.'”

    Community and mental health foundation trust
  • “'Information is not available that’s inclusive and relevant. Some good service improvements in the local economy and some stark pressures, particularly in relation to social care, GP services, A&E, crisis and out-of-hours care. I'm not sure things are much worse but it’s getting harder to paper over the cracks.'”

    Mental health and social care trust
  • “'GP services in particular seem to be extremely stretched.'”

    Mental health foundation trust

Question not asked before QMR6.

CCG Leads
Figure 8: 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

  • “'The main acute providers have missed waiting times, A&E clearance and cancer targets, but have improved mortality and infection control performance.'”

  • “'Waiting times have increased significantly. Primary care overworked and can't be doing the best for patients.'”

  • “'Issues in staffing-up non-elective peaks; issues in recruiting to key consultant posts; backlog on waiting lists due to non-elective activity; lack of care homes/domiciliary care.'”

CCGs only surveyed since their establishment in April 2013.

5. Organisational challenges

For trust finance directors, staff morale remains at the top of the list of concerns (the fourth quarterly survey in a row), along with the four-hour A&E waiting time target and delayed transfers of care (Figure 9).

CCG finance leads continue to be most concerned about A&E and 18-week referral-to-treatment (RTT) waiting time targets and cancer treatment waiting times (Figure 10).

NHS Trusts
Figure 9: Trends: Which aspects of your organisation's performance are giving you most cause for concern at the moment? Please select top three

Respondent comments

  • “'A key area for concern is the ongoing sustainability of services. Over the past three years we have successfully closed over 300 beds and have invested in transforming our community services and in safer staffing on wards. This has enabled us to remain sustainable and improve the quality of our service delivery. By taking cash out of the system it will be destabilised.'”

    Mental health trust
  • “'Length of stay is being impacted upon by increasing delays outside of the hospital. Imposing cuts on services and organisations linked to the NHS imposes a cost pressure which has the same impact as a funding cut to the NHS.'”

    Acute foundation trust
  • “'Extremely high mental health inpatient occupancy rates (c100 per cent) which are unfunded by commissioners, and no capacity elsewhere in system to reduce our occupancy rates. Operating at this level of occupancy causes both financial overspends and increased clinical risk.'”

    Mental health trust

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

Respondent comments

  • “'The tension between providers and commissioners is becoming more apparent. The provider sector is very focused on financial sustainability irrespective of the whole health economy position. Also very concerned about councils and their ability to fund adult social care.'”

  • “'Capacity of provider organisations to deliver transformation change at the same time as fire-fighting to deliver performance targets.'”

  • “'Primary care capacity and morale.'”

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

6. Workforce

In June 2015, the government announced controls on spending on agency staff. The plans also included setting a maximum hourly rate for agency doctors and nurses and putting a cap on total agency staff spending for each NHS trust.

When asked whether the proposed controls would significantly reduce their agency spend, 61 per cent of NHS trust finance directors indicated that they were unlikely to reduce their agency spend (Figure 11). Respondents gave a number of reasons for this, including the importance of being able to fill short-term gaps in service with locums and the fact that providers are already purchasing locum services within the agreed framework. Just over a quarter of NHS trust finance directors thought the proposed controls could affect their ability to recruit the staff needed to provide safe care (Figure 12).

NHS Trusts
Figure 11: Do you think the government's proposed new controls on agency staff will significantly reduce your agency spend?
11 Yes
59 No
27 Don't know

Respondent comments

  • “'We need a workforce solution to ensure that we can recruit sufficient nurses and doctors. The increase in temporary staffing is not just down to a lack of controls.'”

    Acute trust
  • “'It will put additional pressures on safe staffing and on existing staff to work bank hours, leading to higher stress levels and sickness. It’s a publicity stunt and not well thought through.'”

    Mental health trust
  • “'Agency staff can be a very effective way of filling a short-term gap in the service without having to recruit to a full-time post. The way in which the proposal is being publicised demonstrates a profound lack of understanding of the service.'”

    Acute trust
  • “'I do wonder whether the government understand that the shortage of nurses compared to the number working for agencies may reflect the two years of no pay awarded to the NHS, followed by a very poor pay settlement the last two years?'”

    Community foundation trust

97 respondents (for whom the question was applicable).

NHS Trusts
Figure 12: Do you think the proposed new controls on agency staff will affect your ability to recruit the staff you need to provide safe care?
27 Yes
30 No
40 Don't know

Respondent comments

  • “'If push comes to shove we won't be unsafe in order to stay compliant with the new controls. But don't tell anyone at the agencies...'”

    Acute and community trust
  • “'If it works properly it should reduce the attractiveness to nurses of working for agencies, thus there will be more available for substantive recruitment.'”

    Community trust
  • “'We are not a foundation trust in breach of our licence for financial reasons, and so would not expect to fall under these controls.'”

    Mental health trust
  • “'The differential between living costs in London versus salaries compared to the rest of the country means that, if staff are required to take permanent roles, they are most likely to move away from London to do that.'”

    Acute trust

97 respondents (for whom the question was applicable).

Three-quarters of NHS trust finance directors plan to increase the number of permanent nursing staff in the next six months (Figure 13). At the same time, 33 per cent of NHS trust finance directors plan to reduce the number of directly employed staff posts this year (2015/16) (Figure 14). Out of the 33 trusts planning to reduce their workforce, 19 plan to increase the number of nurses in the next six months (58 per cent). Comments from trust finance directors suggest that non-clinical staff will be most affected by the cuts in posts.

NHS Trusts
Figure 13: Is your organisation planning to increase the number of permanent nursing staff in the next six months?
75 Yes
24 No

Respondent comments

  • “'We are cruising the world for nurses, with a big bag of cash for golden hellos. How did we sink so low?'”

    Acute and community trust
  • “'The trust would like to increase its permanent workforce, however is increasingly reliant on agency staff.'”

    Acute and community trust
  • “'We can't recruit to current establishments! If we could recruit to current establishments that would be a huge improvement.'”

    Acute trust
  • “'A constant battle at the moment to fill vacancies and some service expansions are ongoing.'”

    Teaching hospital (and community trust)

99 respondents (for whom the question was applicable).

NHS Trusts
Figure 14: Is your organisation planning/implementing an overall reduction in directly employed staff posts this year (2015/16)?
33 Yes
67 No

Respondent comments

  • “'Reductions can be anticipated from 2016/17. Numbers uncertain at this point.'”

    Community trust
  • “'Circa 50 reduction in established posts in community services - major component of cost improvement programme for 2015/16 is reconfiguration of community mental health teams across the trust.'”

    Mental health trust
  • “'Approximately 50 posts. You can’t take 4 per cent of expenditure out of the system without removing posts.'”

    Acute trust

7. Funding for mental health services

As part of the ambition to achieve parity of esteem between mental and physical health by 2020, CCGs are expected to increase spending on mental health services in 2015/16 in real terms, and grow by at least as much as each CCG’s allocation increase (NHS England 2014).

Just under a third of all NHS trust finance directors working in mental health trusts are fairly or very concerned that the planned increase in funding for mental health services this year will be not met (Figure 15).

At the same time, around 8 in 10 of all CCG finance leads are fairly or very confident about making the planned increases in funding available for mental services this year (Figure 16).

NHS Trusts
Figure 15: FOR MENTAL HEALTH TRUSTS ONLY: How confident are you that your commissioners will increase funding for mental health services in 2015/16 in real terms, in line with the NHS five year forward view?
6 Very confident
10 Fairly confident
8 Uncertain
2 Fairly concerned
9 Very concerned

Respondent comments

  • “'There is a mixed picture among our commissioners. Certainly we have not seen anywhere near the expected level of funding identified in the NHS five year forward view.'”

  • “'Most CCGs are providing an element of investment. Some are still looking to reduce their mental health investment.'”

  • “'Our income from CCG commissions will fall in absolute terms in 2015/16. We are unaware of any significant investments with alternative providers in our system.'”

  • “'To secure funding we have needed to go at risk upfront during 2014/15 to 'prove concept' for developments. CCGs want to invest but their funds are being massively stretched as a result of NHS England budget pressures (primary care, specialist commissioning), continuing health care cost growth, acute activity, enhanced tariff option impacts and inability to achieve recurrent QIPP. The system needs to generate investment to save funding.'”

35 respondents (for whom the question was applicable).

CCG Leads
Figure 16: How confident are you that you will be able to increase funding for mental health services in 2015/16 in real terms, increasing this at least in line with the CCG's overall growth as suggested by the NHS five year forward view?
25 Very confident
19 Fairly confident
4 Uncertain
4 Fairly concerned
1 Very concerned

Respondent comments

  • “'The investment resources required have been planned, however the important thing will be to ensure that they are invested wisely and drive good value for money.'”

  • “'The money is ring-fenced but not committed. If financial pressures occur then could come under pressure to slip investment.'”

  • “'For my CCG this would amount to nearly £5 million. Even if we could afford it, which we can't, there aren't the staff out there to recruit. It’s a crude target – we were a relatively high spender on mental health to begin with.'”

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

As for views about the financial state of their wider local health and care economy over this financial year, around 90 per cent of trust finance directors were fairly or very pessimistic (Figure 17). Similarly, 80 per cent of CCG finance leads feel fairly or very pessimistic (Figure 18). Both are slightly worse compared to our survey in June 2014.

NHS Trusts
Figure 17: 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

  • “'The acute sector is now experiencing deficits which will impact on the overall ability of the health and social care economy to function, significantly exacerbated by the continuing pressure on social care. This in turn puts pressure on mental health services.'”

    Mental health trust
  • “'The impact of the allocations to the local CCG and the Better Care Fund mean that commissioners and local authorities will make surpluses. That will mean that there is a chance of equilibrium for the system. The problems are that these authorities have a habit of spending the money they have badly, often on hare-brained "transformation" projects which fail to deliver, and that the funds never reach the frontline when the financial pressures are intense.'”

    Acute trust
  • “'For the first time, every organisation within the local economy will be in deficit.'”

    Acute trust
  • “'We are in a bizarrely named "success regime", comprising five acute providers with a combined planned deficit of more than £100 million in 2015/16. Our local CCG has a deficit of £10 million. Success indeed! We are trying to run up a down escalator that is getting faster.'”

    Acute trust

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

CCG Leads
Figure 18: 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

  • “'Instead of trying to keep the strategic and operational "ask" simple in order to ensure success, we seem to be loading more complex and often contradictory requirements onto the service.'”

  • “'A number of NHS organisations are planning deficits. We need to get on with the transformation agenda, not talk about it anymore!'”

  • “'CCG, providers and local authorities are all struggling financially.'”

CCGs only surveyed since their establishment in April 2013.

9. Looking ahead to 2016/17

With two-thirds of trusts forecasting an end-of-year deficit for 2015/16, the situation looks even worse for 2016/17. Just under three-quarters (73 per cent) of NHS trust finance directors are pessimistic about balancing their books next year (Figure 19).

Around 30 per cent of CCG finance leads felt fairly or very concerned about achieving financial balance in 2016/17, reflecting the greatest degree of pessimism for CCG finance leads since we started surveying (Figure 20).

NHS Trusts
Figure 19: Looking ahead, how confident are you that your organisation will achieve financial balance in 2016/17?
0 Very confident
13 Fairly confident
14 Uncertain
20 Fairly concerned
53 Very concerned

Respondent comments

  • “'It is frankly impossible.'”

    Acute trust
  • “'We will struggle to achieve our "planned" deficit.'”

    Community and mental health trust
  • “'Under the current regime of tariff not reflecting costs, unreflective rural market forces factors, burgeoning fines and unrealistic year on year savings targets it will only get significantly worse each year.'”

    Acute trust
  • “'Having lost £16 million in CQUIN payments this year, and presumably facing a similar tariff next year, we are very concerned.'”

    Acute teaching hospital
  • “'Potential local authority cost reductions could have a significant impact on individuals' access to social care and delayed discharges.'”

    Mental health trust
  • “'Trust unsustainable under current planning assumptions.'”

    Acute teaching hospital
CCG Leads
Figure 20: Looking ahead, how confident are you that your organisation will achieve financial balance in 2016/17?
3 Very confident
18 Fairly confident
18 Uncertain
12 Fairly concerned
7 Very concerned

Respondent comments

  • “'We are edging towards deficit over next few years unless we restrict the level of funding we are able to give to individual packages of care. Cost should not be unlimited, even if based on need.'”

  • “'CCG close to target allocations, so no growth expected to offset significant provider pressure.'”

  • “'Increased QIPP target as a result of NHS England instruction to increase contracted activity.'”

References

  • Department of Health (2015). ‘Clampdown on staffing agencies charging NHS extortionate rates’. Press release, 2 June. Available at: www.gov.uk (accessed on 6 July 2015).

  • Monitor (2015). Quarterly report on the performance of the NHS foundation trust sector: year ended 31 March 2015. Board meeting, 28 May. Available at: www.gov.uk (accessed on 10 July 2015).

  • NHS England (2015). Consolidated 2014/15 financial report (month 10). Paper PB.150326/13A for Board meeting, 26 March. Available at: www.england.nhs.uk (accessed on 10 July 2015).

  • NHS England (2014). The ‘forward view’ into action: planning for 2015/16. Available at: www.england.nhs.uk (accessed on 10 July 2015)

  • NHS Trust Development Authority (2015). Paper D: NHS Trust Service and Financial Performance Report for the period ending 31 March 2015. Board meeting, 21 May. Available at: www.ntda.nhs.uk (accessed on 10 July 2015)

  • Wintour P, Campbell D (2015). ‘Ed Miliband warns that NHS faces financial bombshell’. News story, 5 May. Available at: www.theguardian.com (accessed on 6 July 2015).