Health care surveys

This report details the results of an online survey of NHS trust finance directors carried out between 7 July and 1 August 2016. We invited 214 NHS trust finance directors to take part and 74 responded (35 per cent response rate). The sample included 35 acute trusts; 28 community and mental health trusts; 1 specialist trust; 3 ambulance trusts and 7 unknown.

In addition, we contacted 138 clinical commissioning group (CCG) finance leads and 40 responded (29 per cent response rate). Between them these finance leads covered 44 CCGs (21 per cent of all CCGs).

1. Estimated end-of-year financial situation: 2016/17

  • Our recent survey found nearly half (47 per cent) of trusts forecast ending the current year (2016/17) in deficit (Figure 3). Furthermore, 50 per cent of providers expecting to receive Sustainability and Transformation Fund monies still forecast a deficit by the end of the year.

  • Although around 57 per cent of CCGs forecast a surplus for 2016/17, just under a quarter (23 per cent) are expecting to overspend – the highest proportion since we began our surveys (Figure 4).

  • Around 92 per cent of trust finance directors reported that their forecast position for 2016/17 would depend on additional financial support (Figure 5).

  • The total net deficit forecast for the end of 2016/17 for the 74 provider organisations surveyed amounted to £263 million. For acute providers the net deficit is £256 million (ranging from £1.45 to £52 million).

  • We also asked trusts to provide details of their agreed control totals for 2016/17. Of the 67 trusts that had agreed control totals or were in the process of agreeing control totals, 13 per cent were already forecasting a worse end-of-year position against their control total. Forty per cent of trusts are either fairly or very concerned about meeting their agreed control totals in 2016/17 (Figure 6).

  • Across the 44 CCGs surveyed, there is a net surplus forecast for 2016/17 of around £99.5 million, although this includes some CCGs relying on the carry-forward of surpluses from previous years.

NHS Trusts
Figure 3: What is your organisation’s forecast end-of-year financial situation?

Respondent comments

  • “£15.5 million positive control total but underlying deficit of more than £40 million.”

    Large acute foundation trust
  • “Difficult start to the year, many operational challenges and huge risks re CQUIN [Commissioning for Quality and Innovation]. Break-even looks challenging.”

    Teaching hospital (with adult community services)
  • “The surplus is dependent on receiving STF [Sustainability and Transformation Fund] funding. Without it we are in deficit. We also have transitional support from commissioners that masks a significant underlying recurrent deficit.”

    Acute foundation trust
  • “Difficulties with the cost improvement plan identification without reducing quality of service.”

    Community NHS trust
  • “Following withdrawal of specialist top-up funding and repeated delays to introduction of HRG4+ tariffs until at earliest 1 April 2017.”

    Tertiary specialist

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

CCG Leads
Figure 4: What is your organisation's forecast end-of-year financial situation?

Respondent comments

  • “Already, with three months' financial reporting and only one month's hospital activity about to be 'frozen' there are emerging pressures on the budget, requiring additional savings schemes to be identified in order to maintain forecast break-even for the year.”

  • “The 1 per cent headroom planned by CCGs has not been released by NHS England. This is increasing the pressure on commissioner budgets.”

  • “Financial performance in the early months of 2016/17 has put the achievement of a surplus at significant risk.”

40 CCG finance leads answered this question for the 44 CCGs they cover collectively; CCGs only surveyed since their establishment in April 2013.

NHS Trusts
Figure 5: What is your forecast 2016/17 end-of-year outturn likely to depend on:
57 Financial support from the Sustainability and Transformation Fund
31 Use of trust reserves
27 Other financial support (eg, additional Public Dividend Capital support, financing facility loans, etc)
12 Delay or cancellation of capital spending
6 None of the above

Respondent comments

  • “Financial support from the STF [Sustainability and Transformation Fund], plus: sale of surplus assets, holding non-clinical vacancies, increasing car park charges.”

    Acute provider
  • “Use of trust reserves, plus: management of activity pressure to within funded envelope with risk of over-performance being unfunded.”

    Mental health NHS foundation trust
  • “The new rules on the STF [Sustainability and Transformation Fund] have only just emerged, and make it unlikely that we will hit the control total, even if we use every last pound of reserve that we have. Our NHS trading environment is as transactional and challenging as ever, with pressure on CCGs to elicit every last penny from providers.”

    Large acute foundation trust
  • “Financial support from the STF [Sustainability and Transformation Fund], other financial support.....and to a property sale and to the launch of domestic and overseas private patient activities, driven by the need to subsidise loss-making NHS services.”

    Tertiary specialist

Only foundation trusts are allowed to retain surpluses. Respondents were allowed to select more than one form of additional financial support.

NHS Trusts
Figure 6: How confident are you that your organisation can meet its control total for 2016/17?
2 Very confident
21 Fairly confident
19 Uncertain
8 Fairly concerned
19 Very concerned

Respondent comments

  • “We are not expecting to be able to reach our control total after a small number of significant issues have arisen in quarter one.”

    Mental health and disability trust (very concerned)
  • “Main risks are around performance relating to sustainability and transformation funding.”

    Acute trust (uncertain)
  • “We have some risks, and I’m concerned that STF [Sustainability and Transformation Fund] metrics do not include mental health, therefore heavily weighted on financial performance, with the potential of a 'double whammy'.”

    Mental health foundation trust (fairly confident)
  • “Already I fear we might miss our [20]16/17 plan by up to £3 million to £4 million (downside). The bottom line number, of course, depends on the extent to which the DH/NHSI [Department of Health/NHS Improvement] encourage another round of technical adjustments including capital to revenue etc...”

    Acute trust (fairly concerned)
  • “Contract income risks even against a prudent plan, sustainability and transformation dependent on performance, ambitious CIP, hopeless local demand controls and meltdown in workforce and labour relations. And Brexit-driven inflation. Am I worried? Yes, of course I'm worried; if you aren't worried you aren't paying attention.”

    Acute and community trust (very concerned)

69 respondents (for whom this question was applicable)

2. Cost improvement and quality, innovation, productivity and prevention programmes (2016/17)

  • The average cost improvement programme (CIP) target for trusts for 2016/17 is 4.2 per cent, ranging from 0.75 per cent to 9.5 per cent of turnover (Figure 7)

  • The average quality, innovation, productivity and prevention (QIPP) target for CCGs for 2016/17 is 3.3 per cent, ranging from 0.6 per cent to 6 per cent of allocation (Figure 7).

  • Around 40 per cent of all NHS trust finance directors continue to be concerned about achieving their savings plans this year (Figure 8).

  • For only the second time since we began surveying, CCG finance leads were more pessimistic than their trust counterparts about their savings programmes. Just under two-thirds (61 per cent) of all CCG finance leads were fairly or very concerned about achieving their plans this year (Figure 9).

NHS TrustsCCG Leads
Figure 7: Trusts and CCGs CIP/QIPP targets for 2016/17
NHS Trusts
Figure 8: How confident are you of achieving your CIP target?

Respondent comments

  • “It’s getting harder to take costs out with more and more patients coming through the doors.”

    Acute provider (fairly concerned)
  • “If demand had held steady, we may have come a little closer. However, the hospital is busier than ever (A&E up 20 per cent since 2008), and we lack the short-term funding to do the necessary transformational change that will allow us to get back onto a sustainable footing.”

    Large acute foundation trust (very concerned)
  • “It's always a challenge, it just gets harder each year to manage recurrently.”

    Mental health foundation trust (fairly concerned)
  • “Risks to our position remain pressure on acute and psychiatric intensive care beds, and ability to reduce our reliance on agency staff. I have done nothing so far about putting detailed figures on the likely impact of Brexit or a prolonged junior doctors' dispute.”

    Mental health foundation trust (fairly confident)
  • “Urgent care demand is hitting unprecedented levels impacting the ability to drive down agency spend and drive up productivity.”

    Acute multi-site provider (very concerned)

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

Respondent comments

  • “Although a lot will be achieved, there are real issues in timescale to deliver QIPP with going through consultation and current open-ended PbR [Payment by Results] contracts make it very difficult unless real demand management can be achieved.”

  • “QIPP reporting at month 3, based on activity/milestones reporting for two months of the year, shows QIPP delivery at 59 per cent of plan (in 2015/16 QIPP delivery was c85 per cent of plan).”

  • “Areas of expenditure highlighted for QIPP schemes are significantly over plan year-to-date, therefore, delivering actual savings in-year will be very difficult.”

  • “I think we will do well to achieve half of our QIPP target. Most QIPP schemes depend entirely on changing clinical behaviours and we do not have direct control or sufficient financial leverage over primary care to deliver that...”

40 CCG finance leads answered this question for the 44 CCGs they cover collectively; CCGs only surveyed since their establishment in April 2013.

3. The state of patient care

  • Although figures have slightly improved since our last survey in April, just under two-thirds of trust finance directors (58 per cent) felt that patient care had worsened in their local area in the past year (Figure 10).

  • For CCGs, the worsening trend since our last survey continues, as 54 per cent of CCG finance leads felt that patient care had worsened in their local area in the past year (Figure 11).

NHS Trusts
Figure 10: 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

  • “All organisations now struggling, LA [local authority] position dire, acute trusts planning and returning deficits, we're planning and forecasting a surplus but year-to-date deficit. CCGs similarly challenged, one in formal recovery the other two having unidentified QIPP.”

    Community and mental health foundation trust (worse)
  • “To the extent that waiting time is a measure of the quality of patient care it has manifestly deteriorated.”

    Acute foundation trust (worse)
  • “Trust deficits increasing, target performance deteriorating, CCGs in deficit, dysfunctional relationships and STP [sustainability and transformation plan] hubris. Plus the dead hand of regulators regularly slapping you in the face, saying ‘not good enough, try harder or face the consequences’. Zombie boards powerless in the face of the regulator stranglehold.”

    Acute trust (worse)
  • “Particularly out-of-hospital care, where block contracts and workforce crises are taking their toll.”

    Acute and community (worse)
  • “Financial pressures and funding constraints are having a detrimental impact on patient care.”

    Acute (worse)

Question not asked before QMR6.

CCG Leads
Figure 11: 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

  • “Primary care has significant capacity issues which have not been helped by the disinvestment that has taken place, eg, training.”

    Worse
  • “Considerable issues in A&E, and delayed transfers of care.”

    Worse
  • “In some ways it's got better as we've invested, eg, in more primary care access and out-of-hospital services, but the staffing crisis means other services have got worse.”

    The same
  • “This comment relates to access – A&E targets missed, waiting lists lengthening, ambulance targets mythical.”

    Worse
  • “How far this can last is debatable – CCG may have to try and introduce some form of rationing.”

    The same

CCGs only surveyed since their establishment in April 2013.

4. Organisational challenges

  • For trust finance directors, delayed transfers of care is now their main concern, followed by the A&E four-hour waiting time target. Staff morale also continues to be one of the top three issues (Figure 12).

  • CCG finance leads continue to be most concerned about the A&E four-hour waiting time target, delayed transfers of care and the cancer treatment waiting times targets (Figure 13).

NHS Trusts
Figure 12: 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 13: 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.

5. Workforce

  • As providers continue to operate within an extremely challenging environment, they have a number of options available to them to help to achieve a break-even (or close to break-even) position. One way providers can significantly reduce expenditure is to reduce the number of clinical staff. Reducing overall agency spend is one condition attached to the receipt of Sustainability and Transformation Fund funding. But what impact (if any) is this having on clinical staff?

  • 71 per cent of trusts plan to reduce clinical agency staff in 2016/17, and 22 per cent plan to reduce headcount of permanent staff (Figure 14).

  • 15 trusts plan to reduce both the number of clinical agency staff and reduce clinical workforce headcount.

NHS Trusts
Figure 14: Does your organisation have plans for reducing clinical staff in 2016/17 through:
52 Reducing agency staff
16 Reducing headcount
20 No plans to reduce clinical staff in 2016/17

Respondent comments

  • “CQC are looking for us to increase clinical staffing not decrease it.”

    Acute trust (no plans to reduce clinical staff)
  • “Still seeing increased demand and increased acuity so therefore keeping clinical headcount flat would be productivity enough.”

    Anon (no plans to reduce clinical staff)
  • “We are trying to reduce agency staff by filling substantive vacancies to reduce cost per whole-time equivalent but not headcount.”

    Acute trust (reducing agency staff)
  • “Big efficiency drive across community teams to reduce agency usage and potentially headcount.”

    Mental health trust (reduce agency staff and headcount)
  • “All options being explored.”

    Community NHS trust (reduce agency staff and headcount)

73 respondents (for whom this question was applicable)

6. NHS five year forward view

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

  • This survey shows that around 77 per cent of trust finance directors and 70 per cent of 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 15 and 16). Only one trust finance director and no CCG finance leads think the chances of achieving this is better than 50/50.

NHS Trusts
Figure 15: 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

  • “This is woefully understated – none of the 5YFV assumptions take account of current pressures or the MASSIVE social care and public health grant budget reductions; these double the estimates!”

    Community and mental health foundation trust (50/50)
  • “As commissioners push their savings down to providers, the providers will still have to achieve levels higher than 2 per cent. Savings are getting harder and harder to find.”

    Acute trust (high risk of failure)
  • “Failure to achieve this target is not only risky, it is inevitable.”

    Acute trust (very high risk of failure)
  • “It was doable with stronger strategic planning, properly structured. We got STPs [sustainability and transformation plans]. Now there's no chance – we'll see it crash and burn, then relaunched properly in [20]19/20, if we're lucky.”

    Acute and community trust (very high risk of failure)

Question not asked in QMR16.

CCG Leads
Figure 16: 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

  • “Always room for improvement but this target has been around for ever and it is hard to see how it can/will be achieved year after year. Even if it is it will be swamped by the constant increases in patient demand/acuity/expectations while at the same time trained staff are not available.”

    High risk of failure
  • “The productivity gains expected are more than has been previously delivered by the NHS, and the more significant changes required to deliver efficiency will take 5–10 years to implement.”

    Very high risk of failure
  • “Trusts have done more or less all they can to control costs – but too much effort remains on them maximising income which is unaffordable for CCGs.”

    Very high risk of failure

Question not asked in QMR16.

7. Looking ahead...

  • When asked for their views about the financial state of their wider local health and care economy over the next 12 months, 88 per cent of trust finance directors and CCG finance leads are fairly or very pessimistic (Figures 17 and 18) (a slight improvement on the last survey for trusts).

  • With just under half of all trusts (47 per cent) forecasting a deficit for 2016/17, the situation looks worse for 2017/18: 63 per cent of NHS trust finance directors are very or fairly pessimistic about balancing their books in 2017/18 (Figure 19).

  • More than half (55 per cent) of CCG finance leads are very or fairly pessimistic about achieving financial balance in 2017/18 (Figure 20).

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 12 months?

Respondent comments

  • “There is a high degree of realism within the local health economy – offset by wholly unrealistic demands from the centre.”

    Mental health provider (very pessimistic)
  • “I have chosen ‘fairly pessimistic’ because I need to leave some room for the inevitable deterioration in the subsequent 12 months!”

    Acute foundation trust
  • “We had a plan – but then in came STPs [sustainability and transformation plans] and we started the whole planning cycle again, with the same management consultants, only with less grip and more bureaucracy. Shame.”

    Acute and community (very pessimistic)
  • “Neither the control totals or the STP [sustainability and transformation plan] are based on a realistic foundation. The pressure from above to come up with 'the right answer', ie, that the financial gaps can all be bridged, provides a powerful and unhealthy incentive not to plan on a realistic basis.”

    Acute (very pessimistic)
  • “Potentially irreconcilable dependencies in commissioners' financial sustainability plans, versus likely demand/delivery realities and dependence of trust plan on continuing margins from incremental growth.”

    Large university teaching trust (fairly pessimistic)

Question not asked before QMR3; QMR 1-4 based on a panel of 50 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 12 months?

Respondent comments

  • “Commissioners and providers facing significant pressures. Worst I’ve seen this century.”

    Fairly pessimistic
  • “Significant round of care cuts being factored in/main provider trust in financial difficulty.”

    Very pessimistic
  • “Along with providers, CCGs are now under serious financial pressure. The 1 per cent [the reserve]… has caused a major challenge to delivering balance in year. All messages are suggesting that this is unavailable to CCGs and therefore it's difficult to see how the end-of-year target is deliverable without relying on at least some of this resource. Provider positions are underpinned by non-recurrent STF [Sustainability and Transformation Fund] resources and therefore the underlying position continues next year.”

    Fairly pessimistic
  • “CCGs locally have survived up to now. This year I am already hearing stories of CCG deficits where previously there were none.”

    Very pessimistic

CCGs only surveyed since their establishment in April 2013.

NHS Trusts
Figure 19: Looking ahead, how confident are you that your organisation will achieve financial balance in 2017/18?
1 Very confident
11 Fairly confident
15 Uncertain
20 Fairly concerned
27 Very concerned

Respondent comments

  • “What's happening with tariff, shared control totals, commissioner affordability, STF [Sustainability and Transformation Fund], etc?”

    Acute (uncertain)
  • “It feels as though the point where you cannot continue to do ‘more for less’ or ‘the same for less’ is upon us!”

    Social enterprise (fairly concerned)
  • “No chance.”

    Large acute foundation trust (very concerned)
  • “It will depend on STF [Sustainability and Transformation Fund] funds or the tariff properly reflecting costs as was originally intended.”

    Acute district general hopsital and specialist (fairly concerned)
  • “It cannot happen at current tariff and MFF [market forces factor]”

    Acute trust (very concerned)
  • “You'd get shorter odds on Silvio Berlusconi marrying Theresa May than any trust in my county returning to break-even before 2020!”

    Acute trust (very concerned)
CCG Leads
Figure 20: Looking ahead, how confident are you that your organisation will achieve financial balance in 2017/18?
0 Very confident
7 Fairly confident
11 Uncertain
8 Fairly concerned
14 Very concerned

Respondent comments

  • “CCG allocation growth in the three years from 2017/18 is the lowest in the five-year period, alongside increasing tariffs and the implementation of a new HRG4+, achieving financial balance will be extremely challenging.”

    Uncertain
  • “Historically have been in relatively good financial health. 1 per cent … reserve is causing significant problems so it will depend upon how this is treated in [20]17/18.”

    Uncertain
  • “Growth in [20]17/18 is even lower than this year – and much of this year's growth has had to be set aside for the 1 per cent reserve. Word on the street is that this funding doesn't actually exist. It is the element of CCG allocations that is unaffordable nationally and therefore we are not allowed to spend it.”

    Very concerned
  • “Medium-term planning across STP [sustainability and transformation plan] footprint is intended to secure sustainable clinical and financial solutions by 2021 but early years are likely to show net system deficits.”

    Fairly concerned