This quarter’s report 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 9 September 2014 and 23 September 2014. We contacted 248 NHS trust finance directors to take part and 90 responded (36 per cent response rate).

In addition, we contacted 202 clinical commissioning group (CCG) finance leads and 43 responded (21 per cent response rate). Between them these finance leads covered 52 CCGs (25 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 likely achievement of delivering the 18-week referral-to-treatment waiting time target by December 2014; and the likelihood of achieving the maximum 62-day wait from urgent GP referral to first definitive treatment for cancer waiting time standard for quarter two 2014/15.

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

More than one in three trusts forecast a deficit for 2014/15 – the highest proportion since we began surveying in 2011 (figure 1). Given the national context, our findings are unsurprising: as at 31 July 2014, 34 per cent of all NHS trusts were forecasting a deficit for 2014/15 (NHS Trust Development Authority 2014a). For foundation trusts, Monitor reports deficits at 86 foundation trusts (close to 60 per cent of the total) adding up to £227 million as at month 3 of 2014/15 (Dorsett 2014b).

CCGs’ forecast position is not as bad as providers’: around one in ten CCGs forecast ending 2014/15 in deficit (figure 2). Nationally, the picture is similar, with NHS England reporting a similar proportion of CCGs forecasting a deficit in 2014/15 (Wheeler 2014).

Projected end-of-year financial balance 2014/15 compared to outturn for 2013/14

In addition to asking respondents about the year ahead, we also asked how this compared to outturn compared to 2013/14. The results show a clear deterioration of finances from 2013/14. More than two-thirds of all trusts (71 per cent) reported that their forecast position for 2014/15 will be worse than their outturn for 2013/14 (figure 3). This could mean lower surpluses, or moving from surplus to deficit, or worse deficits.

On the commissioner side, just over half of all CCGs forecast a similar position compared to the outturn for last year. Thirty per cent reported that their forecast position would be worse than their outturn for 2013/14 (figure 4).

Cost improvement and QIPP programmes (2014/15 and 2015/16)

The average cost improvement programme (CIP) target for trusts in the 2014/15 and 2015/16 financial years is 4.6 per cent, ranging between 1.5 per cent and 8 per cent of turnover (figure 5).

The average quality, innovation, productivity and prevention (QIPP) target for CCGs for the 2014/15 financial year is 2.4 per cent, ranging from 0.5 per cent and 5 per cent of allocation. The average QIPP target for CCGs for the 2015/16 year increases to 3 per cent, ranging from 0.75 per cent to 8 per cent of allocation (figure 5).

Since the end of 2013/14 there has been a marked loss in confidence in achieving planned CIPs/QIPPs. Around 50 per cent of all NHS trust finance directors and CCG finance leads were fairly or very concerned about achieving their CIP/QIPP plans this year – this is the highest level of concern since we began the survey in 2011 (figures 6 and 7).

In terms of plans for 2015/16, two out of three trust finance directors state that they are fairly or very concerned about achieving their CIP, and just over half of all CCGs are similarly concerned about achieving their QIPP targets next year (figures 8 and 9).

The £20 billion productivity challenge

With the £20 billion ‘Nicholson Challenge’ in its final year, views on the risk of achieving this value of productivity improvements are highly pessimistic.

Three-quarters of trust finance directors felt there was a high or very high risk of failure to achieve the productivity challenge (figure 10). CCG finance leads felt fairly pessimistic too – with the majority of respondents assessing the risk of failure as fairly or very high (figure 11).

Around 38 per cent of NHS trust finance directors felt care in their local area had got worse over the past year – continuing a trend since the beginning of this financial year (figure 12).

Similarly, around 35 per cent of CCG finance leads felt patient care had worsened in the last year; less than a quarter thought it had got better (figure 13).

For trust finance directors, staff morale returns to the top of the list of concerns along with waiting time targets and delayed transfers of care (figure 14).

CCG finance leads continue to be most concerned about A&E and 18-week referral-to-treatment waiting time targets. Cancer treatment waiting time targets return to the top of their concerns – reflecting perhaps the deterioration in performance against this target (figure 15).

Given the Department of Health’s push to reduce the number of people still waiting more than 18 weeks, with additional funding to pay for increased activity, we asked finance directors how confident they were in their organisation’s ability to deliver on the three main stages of the 18-week referral-to-treatment target – for those still waiting (‘incomplete pathways’), outpatients (‘non-admitted patient’) and inpatients (‘admitted patient’).

Although this is an improvement on the current position nationally (where a little more than 50 per cent are not meeting the admitted care target), more than a quarter of finance directors surveyed are either fairly or very concerned that their organisation would not be able to deliver this operational standard by December 2014 (figure 16).

For non-admitted patients, national data shows that around 22 per cent are currently not meeting the target. Our survey indicates that 17 per cent were not confident of meeting the target for non-admitted patients (figure 17).

For those still waiting, the proportion of trusts currently not meeting the target (18 per cent) is similar to the proportion (19 per cent) reporting in our survey that they were very or fairly unconfident of meeting this target by December (figure 18).

A key cancer waiting time target – that 85 per cent of patients should wait no longer than 62 days from urgent GP referral to first definitive treatment – has been breached in the last quarter of 2013/14 and again in the first quarter of 2014/15; around a third of trust finance directors and CCG finance leads expect their organisation to breach this standard in quarter two this year (ie, July to September 2014) (figures 19 and 20).

When asked how they felt about the financial state over the next year of their wider local health and care economy, 90 per cent of trust finance directors were fairly or very pessimistic (figure 21). This is the least optimistic view recorded by the QMR survey since it started.

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

• Dorsett J (2014b). Quarterly report on the performance of the NHS foundation trust sector: 3 months ended 30 Jun 2014. London: Monitor. Available at: www.gov.uk (accessed on 21 October 2014).

• NHS Trust Development Authority (2014a). NHS trust service and financial performance report for the four month period ending 31 July 2014. Paper E for Board meeting 18 September 2014. Available at: www.ntda.nhs.uk (accessed on 21 October 2014).

• Wheeler K (2014). NHS performance report in the period to the end of August 2014. Paper NHSE191404 for Board meeting, 19 September 2014. Available at: www.england.nhs.uk (accessed on 21 October 2014).