Health care surveys

This report details the results of an online survey of NHS trust finance directors carried out between 7 January and 25 January 2016. We contacted 236 NHS trust finance directors to take part and 83 responded (35 per cent response rate). The sample included 38 acute trusts; 28 community and mental health trusts; 4 specialist trusts; 2 ambulance trusts and 11 unknown. This sample broadly reflects the composition of NHS providers in England.

In addition, we contacted 171 clinical commissioning group (CCG) finance leads and 50 responded (29 per cent response rate). Between them these finance leads covered 61 CCGs (29 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.

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

  • These figures confirm that NHS providers are heading towards an unprecedented end-of-year deficit.

  • Halfway through 2015/16, NHS trusts and foundation trusts reported a net overspend of £1.6 billion. Monitor and the NHS Trust Development Authority suggested that this could imply an end-of-year deficit in the region of £2.2 billion (Monitor 2015; NHS Trust Development Authority 2015).

  • Our third survey for this financial year confirms this extremely difficult financial situation: 67 per cent of all providers forecast a deficit for the end of year and 89 per cent of acute trusts are expecting to overspend (Figure 6).

  • The total net deficit forecast for the end of 2015/16 for the 83 provider organisations surveyed amounted to £721 million. For acute providers the net deficit is £708 million (ranging from £3.7 to £62 million). Scaled up for each type of provider organisation, these figures suggest a net overall provider deficit across the NHS by the end of this financial year of around £2.3 billion.

  • The financial situation for CCGs has been and remains less precarious than for providers. However, the latest survey confirms our September finding with the proportion of CCGs forecasting an overspend by the end of the year almost double that in the previous two quarters (Figure 7).

NHS Trusts
Figure 6: What is your organisation’s forecast end-of-year financial situation?

Respondent comments

  • “Only in surplus due to significant profit on land sales. Without these, deficit would be around £3.6 million, or 3 per cent of turnover.”

    Mental health trust
  • “(In deficit) Driven by agency premium costs in difficult to recruit cardiac critical care.”

    Specialist trust
  • “(In deficit) The first time in the 15 years of the organisation.”

    Teaching hospital (acute and community)

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

CCG Leads
Figure 7: What is your organisation's forecast end-of-year financial situation?

Respondent comments

  • “Target surplus as set by NHS England only, and significant risk to delivery still exists.”

  • “The CCG is planning to deliver the NHS England business rules in 2015/16, this includes a 1 per cent surplus.”

  • “In-year deficit, utilising previous surplus.”

  • “Surplus is from carry forward. Real position is in-year deficit.”

50 CCG finance leads answered this question for the 61 CCGs they cover collectively.
CCGs only surveyed since their establishment in April 2013.

2. In-year financial support

  • Around 64 per cent of finance directors reported that their forecast position this year would include additional financial support, either via loans, additions to their public dividend capital (PDC) from the Department of Health, or drawing on their own reserves (Figure 8).
NHS Trusts
Figure 8: What is your forecast end-of-year outturn likely to depend on?
20 Additional financial support (eg, additional Public Dividend Capital support, financing facility loans, etc)
39 Use of trust reserves
32 Neither

Respondent comments

  • “Funding assumed from local commissioners linked to winter pressures and additional cost of patients whose discharge has been delayed.”

    Acute teaching (additional financial support)
  • “We are using non-recurrent support and borrowing cash from the ITFF (independent trust financing facility).”

    Acute foundation trust (additional financial support and trust reserves)
  • “Property sales and capping agency costs.”

    Community and mental health foundation trust (neither)
  • “We need a £37 million cash loan in February to be able to pay staff and suppliers in the last two months. CCGs paid us in 10 months, instead of 12.”

    Medium-sized acute district general hospital (additional financial support)
  • “Cupboard will soon be bare.”

    Acute, multi-site district general hospitals (trust reserves)

Only foundation trusts are allowed to retain surpluses. Respondents were 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 1.8 per cent to 8.5 per cent of turnover.

  • The average quality, innovation, productivity and prevention (QIPP) target for CCGs for 2015/16 is 2.5 per cent, ranging from 0.8 per cent to 4.8 per cent of allocation (Figure 9).

  • While CIP/QIPP targets have remained at similar levels for a number of years, confidence in the ability to achieve plans has been reducing each year since 2011. Around 53 per cent of all NHS trust finance directors now feel fairly or very concerned about achieving their savings plans this year (Figure 10); this is the most pessimistic finance directors have been at this time of year since our survey began.

  • CCG finance leads were more optimistic than their counterparts. However, just under a third (29 per cent) of all CCG finance leads were fairly or very concerned about achieving their QIPP plans this year (Figure 11).

NHS TrustsCCG Leads
Figure 9: Trusts and CCGs CIP/QIPP targets for 2015/16
NHS Trusts
Figure 10: How confident are you of achieving your CIP target?

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 11: How confident are you of achieving your QIPP target?

Respondent comments

  • “Although we are confident of achieving QIPP, much of this is being met non-recurrently in 2015/16.”

  • “Some savings involved reducing activity levels, but demand this year has outstripped our ability to prove that the required activity-based savings have been made.”

  • “Slippage on schemes but covered by reserves other mitigations, managed in overall position.”

50 CCG finance leads answered this question for the 61 CCGs they cover collectively.
CCGs only surveyed since their establishment in April 2013.

4. The state of patient care

  • For the first time, a majority (53 per cent) of trust finance directors felt that care had worsened in their local area in the past year (Figure 12), and a total of 46 per cent of all CCG finance leads thought that care in their local area had worsened over the past year (Figure 13).
NHS Trusts
Figure 12: 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 hospitals all deteriorating.”

    Community foundation trust (worse)
  • “Delays to discharge are certainly worse. Some other issues including access to diagnostic services has improved.”

    Acute teaching (the same)
  • “This time last year my view would have been that the financial pressures were not making the quality of care worse. This has, however, changed. The deepening deficits in the hospitals and the severe cuts to adult social care are now worsening the care that the system can provide.”

    Acute hospital NHS trust (worse)
  • “Seems to be some genuine joint working among commissioners that is feeding through to providers so that we can contribute to genuine joint win/win solutions.”

    Mental health foundation trust (better)
  • “Medical outliers impacting surgical capacity = safari ward rounds = extended length of stay. Cancelling electives.”

    Acute, multi-site district general hospital (worse)

Question not asked before QMR6.

CCG Leads
Figure 13: 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

  • “Local trust has failed to be able to provide elective services, due to emergency care pressures, so patients have had to use other providers.”

    (Worse)
  • “A&E waiting time four-hour performance worse than previous year.”

    (Worse)
  • “Much work has been done to streamline patient pathways and remove slow and wasteful approaches to treating patients. This work has identified the scope but as yet has been slow to deliver real change.”

    (The same)
  • “More use of agency staff. Constitutional targets slipping further. Provider finances beyond challenging.”

    Worse
  • “Longer waits, more difficult access, over-worked practices.”

    (Worse)
  • “Improvements in primary care have begun; however, there have been pressures in secondary care.”

    (The same)
  • “The impact of a sizeable deficit in the local acute trust means that patient care is not immune from the consequent actions.”

    (Worse)
  • “Quality and safety of care has improved, but a number of access -based performance metrics (eg, A&E four-hour target) have got worse.”

    (The same)

CCGs only surveyed since their establishment in April 2013.

5. Organisational challenges

  • For trust finance directors, the four-hour waiting time target in A&E is the biggest concern for the first time since our 12th report in June 2014. The 18-week referral-to-treatment time target also moves up the list of concerns. Staff morale drops down the list – although continues to be one of the top three concerns (Figure 14).

  • CCG finance leads continue to be most concerned about the four-hour waiting time target in A&E, delayed transfers of care and the cancer treatment waiting times targets (Figure 15).

NHS Trusts
Figure 14: Which aspects of your organisation's performance are giving you most cause for concern at the moment?

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 15: Which aspects of your organisation's performance are giving you most cause for concern at the moment?

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 for spending on agency staff. These included setting a maximum hourly rate for agency doctors and nurses and placing a cap on total agency staff spending for each NHS trust.

  • More than half of all providers in our survey (55 per cent) were fairly or very concerned about their organisation staying within the total agency spend cap for 2015/16.

  • When asked whether the proposed controls would affect their ability to ensure safe staffing levels, 22 per cent NHS trust finance directors said they would. A further 35 per cent were not sure of the impact on safe staffing levels, indicating an increasing uncertainty about the effect of the controls (Figure 17).

NHS Trusts
Figure 16: How confident are you that your organisation will stay within its total agency spend cap by the end of 2015/16?
12 Very confident
18 Fairly confident
7 Uncertain
14 Fairly concerned
30 Very concerned

Respondent comments

  • “We have made significant reductions in our reliance on locums and agency staff this year by redesigning services.”

    Community NHS trust (very confident)
  • “We haven't managed to stay within our 6 per cent target. Quite why they introduced this at the onset of winter is beyond me. Post-Francis, Keogh, Berwick et al, targets like this are meaningless. It doesn't drive behaviour.”

    Medium-size acute district general hospital (very concerned)
  • “Specialist medical and particularly nursing staff in London are hard to come by on a permanent basis. It remains to be seen how effective are the new proposals to curb agency spend without compromising patient safety while meeting more demanding overall staffing levels.”

    Specialist tertiary trust (fairly concerned)
  • “It's the rates and market management that matter, not the spend cap.”

    Acute and community foundation trust (uncertain)

81 respondents (for whom the question was applicable).

NHS Trusts
Figure 17: Do you think the proposed new controls on agency staff will affect your ability to recruit the staff you need to provide safe care?
18 Yes
36 No
28 Don't know

Respondent comments

  • “Positively - it will encourage agency staff back to substantive employment.”

    Unknown (yes)
  • “Potentially - it depends if all local providers stick to the rules then agency staff will be forced to accept lower rates.”

    Community NHS trust (don’t know)
  • “Use of agency staff in part reflects short-term decision-taking by commissioners ('pilots' and non-recurring solutions). Furthermore it is our experience that Framework suppliers do not necessarily have the range of specialist skills that we are currently requiring.”

    Mental health provider (yes)
  • “The organisation will prioritise patient safety and so far has been able to achieve some reduction in agency costs without affecting patient care; however, the further reduction in rate caps in February may have an adverse impact.”

    Acute hospital NHS trust (don’t know)
  • “We will recruit the staff if necessary for patient care. May impact on IT developments.”

    Teaching hospital (acute and community) (no)

82 respondents (for whom the question was applicable).

7. NHS five year forward view - one year on

  • Previous surveys have revealed a high degree of scepticism about the achievability of the productivity challenge as set out by the Forward View.

  • This survey shows that around 68 per cent of finance directors and CCG finance leads think there is a high or very high risk of failing to achieve the productivity gains suggested by the Forward View (Figures 18 and 19).

NHS Trusts
Figure 18: The NHS five year forward view sets out a challenge to the NHS to achieve an average of 2 to 3 per cent of productivity gains per year from 2015/16 to 2020/21. What is your estimate of the risk involved in achieving these productivity gains?

Respondent comments

  • “At 2-2.5 per cent, this should be achievable looking at data on services and manufacturing, 2000-07. The danger is that an ever more prescriptive centre secures achievement of Carter's £5 billion but crowds out and fails to secure the patient and mission focused change that drives the remaining £17 billion of needed savings.”

    Unknown
  • “Large parts of the NHS will deliver little leaving providers to try to deliver further significant savings. No evidence that reducing demand growth will work or that alternative models will save money or be effective. Pressures probably greater than assumed centrally.”

    Teaching hospital (acute and community)
  • “The impact of social care budget cuts on the hospital is significant and likely to increase. The hospital is subject to extreme and increasing pressure in the emergency and urgent care pathways and lacks capacity to exploit opportunities to increase efficiency in elective care.”

    Acute hospital NHS trust

Question not asked in QMR16.

CCG Leads
Figure 19: The NHS five year forward view sets out a challenge to the NHS to achieve an average of 2 to 3 per cent productivity gains per year from 2015/16 to 2020/21. What is your estimate of the risk involved in achieving these productivity gains?

Respondent comments

  • “Unless managed through real integration, joint working and transparency then there is a high risk that organisational plans will be out of sync.”

  • “I think it is going to be hard to shift the NHS from a reactive care organisation to a proactive care organisation.”

  • “We are starting from a baseline of a major deficit that even the suggested funding in 2016/17 would potentially only partially address”

Question not asked in QMR16.

8. Looking ahead

  • When asked for their views about the financial state of their wider local health and care economy over the next 12 months, 89 per cent of trust finance directors were fairly or very pessimistic (Figure 20). The proportion stating they were very pessimistic has dropped since the previous survey in September last year and may reflect the outcome of the Spending Review in November – an important aspect of which was the frontloading next year of this parliament’s NHS settlement. Nevertheless, the proportion reporting they were optimistic remains very low.

  • Around two-thirds of CCG finance leads felt fairly or very pessimistic (Figure 21). A similar fall in those reporting to be very pessimistic may also reflect the outcome of the Spending Review.

NHS Trusts
Figure 20: Overall, what do you feel about the financial state of the wider health (and care) economy in your area over the next 12 months?

Respondent comments

  • “The recent funding announcement of £3.8 billion assumes 2 per cent savings, no funding for cost pressures, ignores £1 billion cost of pension/NI changes, etc. It assumes provider deficits will be £1.8 billion when they will be £2.5-3 billion and this will break the vote, and be clawed off the £1.8 billion set aside to deal with provider deficits. The whole thing does not add up by about £1.5 billion and this ignores enhanced seven-day services and the demographic growth impact.”

    DGH plus specialist
  • “The planning guidance for next year does not provide a realistic approach to financial recovery. The gap between the rhetoric of the planning guidance and the reality appears to be significantly wider than in any previous year.”

    Acute hospital NHS trust
  • “Despite the transformation fund the impact of social care cuts and the efficiency requirements mean that we will continue to struggle.”

    Acute foundation trust

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

CCG Leads
Figure 21: Overall, what do you feel about the financial state of the wider health (and care) economy in your area over the next 12 months?

Respondent comments

  • “New monies will help significantly but if they do not deliver the cultural changes and transformation needed then the NHS will be in a worse position in 2017/18.”

  • “The cuts to local authorities will bring significant pressures to the whole system. This is probably our biggest challenge to work through over the next few years.”

  • “At least a proportion (c30 per cent) of the financial challenge in the local acute is structural and therefore is unlikely to be effectively addressed in the short term.”

  • “While trust bottom lines are being supported, cost pressures are being transferred to the commissioning sector, and a challenging year is facing us.”

CCGs only surveyed since their establishment in April 2013.

  • With 67 per cent of trusts forecasting an end-of-year deficit for 2015/16, the situation looks worse for 2016/17: 71 per cent of NHS trust finance directors are very or fairly pessimistic about balancing their books in 2016/17 (Figure 22). It should be noted that the timing of our survey means that while the outcome of the Spending Review was known, not all respondents will have known about some of the detail of the sustainability and other deficit measures for next year when answering the survey.

  • Overall, CCG leads are more optimistic; however, 30 per cent are very or fairly pessimistic about achieving financial balance in 2016/17 (Figure 23).

NHS Trusts
Figure 22 Looking ahead, how confident are you that your organisation will achieve financial balance in 2016/17?
1 Very confident
14 Fairly confident
9 Uncertain
14 Fairly concerned
45 Very concerned

Respondent comments

  • “Frankly, it would be easier to pass a camel through the eye of a needle than my trust to active break-even in FIVE years! Everyone talks about savings, but that can only come about by spending less money on people, premises and procurement. What regulators and politicians forget is that demand is rising.”

    Medium-size acute district general hospital (very concerned)
  • “Likely the trust will be in deficit in 16/17 of around £3 million with the aim of getting back to at least break even in 2017/18. This position may change once details of how the 2016/17 £1.8 billion sustainability and transformation fund is to be allocated.”

    Specialist/acute paediatrics (very concerned)
  • “Our specialist funding of around £12 million to reflect additional case complexity not recognised under HRG4 tariffs was withdrawn from 2015/16 which resulted in our planned deficit. We were told many times that HRG4+ tariffs (reflecting case complexity) and specialist top-ups for cardiac and respiratory services - our two specialties - would both be introduced from 1 April 2016. It was announced last month that both these changes will be postponed until 2017/18 to avoid 'volatility'.”

    Specialist tertiary trust (very concerned)
  • “No chance - deficits are ‘built in’ to new planning guidance - maybe the centre likes it that way?”

    Acute and community foundation trust (very concerned)
  • “With the delay in tariff information and guidance for 2016/17 it is uncertain at this time the true financial impact of next year's position.”

    Specialist (uncertain)
  • “To achieve a balanced position would require CIPs of around 5 per cent - this is clearly unrealistic without service reductions.”

    Mental health foundation trust (very concerned)
CCG Leads
Figure 23: Looking ahead, how confident are you that your organisation will achieve financial balance in 2016/17?
3 Very confident
19 Fairly confident
13 Uncertain
10 Fairly concerned
5 Very concerned

Respondent comments

  • “We have a further QIPP challenge of £25 million for 2016/17 and are running out of ideas for reform. Services may have to be stopped.”

    Uncertain
  • “Based on recent allocation, however, our main trust has significant financial concerns and it will depend upon how the £1.8 billion is allocated by Monitor and TDA and what requirements are put on this.”

    Fairly confident

References

  • Monitor (2015). ‘Quarterly report on the performance of the NHS foundation trust sector: 6 months ended 30 September 2015’ [online]. GOV.UK website. Available at: www.gov.uk (accessed on 15 February 2016)

  • NHS Trust Development Authority (2015). ‘Quarterly report on the performance of the NHS foundation trusts and NHS trusts: 6 months ended 30 September 2015’. Available at: www.ntda.nhs.uk (accessed on 15 February 2016).