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 10 September 2015 and 28 September 2015. We contacted 240 NHS trust finance directors to take part and 90 responded (37 per cent response rate). The sample included 41 acute trusts; 33 community and mental health trusts; 5 specialist trusts; 1 ambulance trust and 10 unknown. This sample broadly reflects the composition of NHS providers in England.

In addition, we contacted 186 clinical commissioning group (CCG) finance leads and 50 responded (27 per cent response rate). Between them these finance leads covered 56 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.

These figures confirm that NHS providers are heading towards an unprecedented end-of-year deficit. At the end of the first quarter 2015/16, NHS trusts and foundation trusts reported overspend of £930 million, which is more than the deficit for the whole of the previous year (Monitor 2015; NHS Trust Development Authority 2015). This reflects a very sharp deterioration in financial performance among all types of providers, with 96 per cent of acute trusts and more than 50 per cent of mental health trusts now reporting overspends.

Our second survey of 2015/6 shows a similar picture, with 64 per cent of all providers forecasting a deficit for the end of year (2015/16) and 88 per cent of acute trusts expecting to overspend (Figure 1). The situation seems to be worsening for CCGs: around 18 per cent of CCGs forecast an overspend by the end of 2015/16 (Figure 2). This is the worst forecast since we started surveying CCGs.

Just under 75 per cent 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). For acute trusts the situation is worse, with 88 per cent reporting the need to rely on additional in-year financial support. The number of trusts dependent on additional financial support has increased from our previous QMR, when just 59 per cent of trust finance directors reported the need for additional financial support.

The average cost improvement programme (CIP) target for trusts for 2015/16 is 4.5 per cent, ranging from 1 per cent to 15 per cent of turnover. The average quality, innovation, productivity and prevention (QIPP) target for CCGs for 2015/16 is 2.6 per cent, ranging from 1 per cent to 5.5 per cent of allocation (Figure 4).

Confidence in achieving planned CIPs/QIPPs has been reducing each year since 2011. Around 54 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 44 per cent of all CCG finance leads were fairly or very concerned about achieving their QIPP plans this year (Figure 6).

Thirty-seven per cent of all NHS trust finance directors feel that care in their local area had worsened over the past year (Figures 7 and 8). However, 58 per cent of all CCG finance leads think care has worsened – the highest proportion since we started surveying CCGs.

For trust finance directors, staff morale remains at the top of the list of concerns (for the fifth quarterly survey in a row), delayed transfers of care also continue to dominate the list of concerns for the third survey in a row. Engagement in performance issues by clinicians has moved up the list of concerns for trust finance directors (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).

In June 2015, the government announced controls for spending on agency staff. These plans 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 affect their ability to ensure safe staffing levels, 27 per cent of NHS trust finance directors think the proposed controls would affect their ability to ensure safe staffing levels, a further 23 per cent are not sure of the impact on safe staffing levels (Figure 11).

Previous surveys have revealed a high degree of scepticism about the achievability of the productivity challenge as set out by the NHS five year forward view (Forward View), and this survey shows that around 85 per cent of finance directors think there is a high or very high risk of failing to achieve the productivity gains suggested by the Forward View (Figure 12).

CCG finance leads also feel fairly pessimistic, with the majority – nearly 90 per cent – assessing the risk of failure as fairly or very high (Figure 13). The last time we asked this question in April 2015, around 66 per cent of CCGs assessed the risk of failure as high or very high.

66 per cent of CCGs are either fairly or very concerned about being able to deliver their planned Better Care Fund savings in 2015/16 (Figure 14). Slightly more than 80 per cent of NHS finance directors feel fairly or very concerned about achieving planned reductions in emergency activity agreed in Better Care Fund plans (Figure 15).

At the same time, just 68 per cent of CCG finance leads feel fairly or very concerned about reductions in emergency activity as agreed in Better Care Fund plans being achieved (Figure 16).

Around 91 per cent of NHS trust finance directors feel that the recent changes to elective times would not improve their organisation’s financial position, or would have little or no impact (Figure 17).

Just under 80 per cent NHS trust finance directors feel that the changes would not improve or would have little or no impact on patients’ care or experience (Figure 18).

The majority of NHS trust finance directors (88 per cent) and CCG finance leads (80 per cent) feel that funding pressures on local authorities have had a negative impact on the performance of health services in their local health economies (Figures 19 and 20).

As for views about the financial state of their wider local health and care economy over this financial year, 94 per cent of trust finance directors are fairly or very pessimistic (Figure 21). Similarly, 90 per cent of CCG finance leads feel fairly or very pessimistic (Figure 22). Both are the worst forecasts since we started surveying the two groups, and represent a sharp increase in pessimism among CCG finance leads.

With 64 per cent of trusts forecasting an end-of-year deficit for 2015/16, the situation looks even worse for 2016/17. Seventy-two per cent of NHS trust finance directors, and thirty-nine per cent of CCG leads are pessimistic about balancing their books in 2016/17 (Figures 23 and 24).

• Monitor (2015). Performance of the foundation trust sector: 3 months ended 30 June 2015. Available at: www.gov.uk (accessed on 14 October 2015)

• NHS Trust Development Authority (2015). Overarching position of NHS trusts for the first quarter of 2015/16. Available at: www.ntda.nhs.uk (accessed on 14 October 2015)