This QMR issue is based on an online survey of the following groups:

This report details the results of an online survey of NHS trust finance directors carried out between 22 November 2013 and 6 December 2013. We contacted 230 trust finance directors to take part and 79 responded 34 per cent response rate).

In addition, 195 clinical commissioning group (CCG) finance leads were contacted and 58 responded (30 per cent response rate). Between them these finance leads covered 72 CCGs.

The online survey of directors of adult social services was carried out over the same period. Of the 152 directors contacted, 47 responded (31 per cent response rate).

The panel 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 likely impact of the Better Care Fund (formerly the Integration Transformation Fund) on performance of key areas (such as the four-hour A&E standard and delayed transfers of care); and their assessment of the key current concerns for their organisation.

Given the level of interest and importance of winter pressures, we took the opportunity to ask trust finance directors about the likely impact of the additional winter funding and about changes required to reduce pressures on A&E departments.

Projected end-of-year financial balance (2013/14)

The NHS is more than two-and-a-half years through the most significant period of financial constraint in its history, with the prospects beyond 2015 looking even more challenging.

At the aggregate level, the NHS seems to be managing reasonably well, in large part due to continued pay restraint and reductions in the tariff. However, this masks growing pressures within the system, with 22 per cent of trusts now predicting a deficit in 2013/14. This is the highest since we began reporting on the financial state of the NHS in 2011.

Cost improvement programmes

2012/13 was the second full year of the four-year £20 billion productivity challenge. Now, part way into the third year of the productivity challenge, how are NHS organisations faring?

The average cost improvement programme (CIP) target for trusts this financial year is again 4.8 per cent, representing between 3 per cent and 7.5 per cent of turnover.

Since the beginning of this financial year there has been a reduction in uncertainty regarding the achievement of planned CIPs expressed by trust finance directors and now around 45 per cent are very or fairly confident of achieving their plans.

However, a similar proportion (45 per cent) are either fairly or very concerned about the achievement of their organisation’s CIP plans – the largest proportion since the summer of 2011 (figure 7 and figure 9).

CCG finance leads are slightly more optimistic about achieving their Quality, Innovation, Productivity and Prevention (QIPP) plans, with more than 61 per cent fairly or very confident (figure 8).

The £20 billion productivity challenge

Our previous reports show that NHS organisations appear to have made good progress in meeting productivity targets during the first two years of the Nicholson Challenge (Appleby et al 2013, 2012).

However, as we approach 2014/15, just under two-thirds of trust finance directors rated the risk of failure to meet the challenge as high or very high (figure 10).

CCG finance leads were again slightly more optimistic, but still six out of ten thought there was a high or very high risk of failure (figure 11).

The driving ambition underlying the challenge to deliver greater productivity and a stable financial position is not only to maintain the quality of services to patients, but to improve it. This emphasis on improving quality of care was underlined in three high-profile reports in 2013 (Francis 2013, Berwick 2013, Keogh 2013).

When asked about the state of patient care in the past 12 months, the majority of respondents felt that patient care had stayed the same (figures 13,14 and 15).

Nevertheless, around one in five trust finance directors and CCG finance leads felt care in their local area had got worse over the past year – an improvement on previous survey results, but of concern nonetheless (figure 16).

The scale of the current system reform, overlaid on an unprecedentedly tough financial settlement and the associated and equally unprecedented productivity target, continue to present a challenging environment for NHS organisations. This is exacerbated by a tough financial settlement for local government and evidence that local authority spending on adult social care continues to fall.

To understand how this was affecting them, trust finance directors and CCG finance leads were asked to state the three aspects of their organisation’s (or organisations they contract with) performance that were giving them most concern at the moment.

CCG finance leads continue to be concerned about A&E four-hour wait targets, while the level of staff morale is the top concern for trust finance directors. This is the first time since we began asking this question that levels of staff morale has been listed as a top concern (figures 17 and 18).

Analysis of data for the final quarter of 2012/13 showed that nearly 6 per cent of patients waited four hours or longer in A&E departments, the highest level since 2004.

Since then, there has been sustained pressure on the system to prepare and plan for winter 2013/14. Part of the planning was the distribution of £250 million to help A&E departments prepare for winter 2013/14, announced in June 2013 (Prime Minister’s Office 2013), and a further £150 million announced in November 2013 (NHS England 2013b).

Only 13 per cent of respondents felt this additional funding would have a significant impact on the pressures their organisations were likely to face over the winter months (figure 19).

As for the top three actions that would help with pressures on A&E departments, finance directors noted improvements in care outside hospital to reduce preventable admissions to A&E, reductions in delayed transfers of care elsewhere in the hospital to help with patient flow out of emergency departments and front-door triaging by senior doctors to direct patients to the most appropriate care for their condition (figure 20).

Preventing unnecessary use of A&E services and ensuring delays in discharge from hospital are minimised will, of course, be two priorities for the Better Care Fund, which will be established mainly from top-sliced NHS funding in 2015/16 and administered jointly by the NHS and local authorities.

When asked if the Better Care Fund is likely help or hinder work to maintain performance in key priority areas such as delayed transfers of care, slightly more than half of directors of adult social services thought it would, but more than a third did not know (figure 23), perhaps reflecting that discussions about the fund were at an early stage.

CCGs’ views about the Better Care Fund were more mixed – 38 per cent thought it would help (figure 22), and trust finance directors were the least optimistic with only 12 per cent saying it would help (figure 21).

When asked how they felt about the financial state of their local health and care economy – not just their own organisations – over the next 12 months, nearly 9 out of 10 trust finance directors were fairly or very pessimistic. These are the most pessimistic views of the future since we began our surveys (figures 24 and 27).

Around two-thirds of CCG finance leads and directors of adult social services were also very or fairly pessimistic about the future financial state of their local health economies (figures 25 and 26).

• Appleby J, Thompson J, Humphries R, Jabbal J, Galea A (2013). Quarterly monitoring report, September 2013. London: The King’s Fund. Available at: www.kingsfund.org.uk (accessed on 13 January 2014).

• Appleby J, Thompson J, Humphries R, Jabbal J, Galea A (2012). Quarterly monitoring report, September 2012. London: The King’s Fund. Available at: www.kingsfund.org.uk (accessed on 13 January 2014).

• Prime Minister’s Office (2013). ‘Prime Minister announces £500 million to relieve pressures on A&E’. London: 10 Downing Street/Department of Health. Available at: www.gov.uk (accessed on 13 January 2014).

• NHS England (2013b). 'Extra £150 million to ease winter pressures'. News article. NHS England website. Available at: www.england.nhs.uk (accessed on 13 January 2014).

• 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 14 January 2014).

• Francis R (2013). Report of the Mid Staffordshire NHS Foundation Trust Public Inquiry. Chaired by Robert Francis QC. London: The Stationery Office. Available at: www.midstaffspublicinquiry.com (accessed 14 January 2014).

• 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 14 January 2014).