6. Over the last three years, the sustainability of finances in the Department of Health and Social Care has been an ongoing concern. The 2017-18 Annual Report and Accounts showed that the NHS achieved a balanced position overall. However, this masks deficits at a local level: in 2017-18, 101 of the 234 NHS Providers (NHS Trust and Foundation Trusts) were in deficit at the end of the financial year and NHS Providers reported a total deficit of £991 million.12 It is unacceptable to simply offset surplus and deficits across the entire organisation in the presentation of overall budget results.
7. Financial sustainability influences patient care. Funding is not reaching the right parts of the system. We have seen the reality of financial pressures at Trust and local level: as we found in April this year, waiting times for cancer and elective care are increasing with significant variation between regions.13
8. To achieve overall financial balance, NHS England relies on short-term fixes to tackle long-term problems. Emergency measures do not generate sustainable strategies. For example, since 2014-15, the Department has used money originally intended for capital projects (to buy or improve an asset) to cover a shortfall in the revenue budget. This cost-shunting peaked at £1.2bn in 2016-17 and is expected to cease from 2020-21.14 While cost-shunting may meet immediate service needs it is achieved at the sacrifice of long- term investment.
9. I welcome the overall ambition of the NHS long term plan. Having called for long-term funding for a number of years, I believe this is fundamental to the financial sustainability of the NHS. However, while welcoming the ambition of more than halving the number of Trusts reporting a deficit by 2019-20 and for no Trust to be reporting a deficit by 2023-4, it remains far from clear how organisations furthest away from breaking-even will be supported to achieve financial balance. Again, there appears to be an inherent lack of understanding about the financial picture at local level. In the face of rising demand, the level of improvement Trusts and Clinical Commissioning Groups (CCGs) need to make within such a short timeframe cannot be underestimated.
10. Staffing shortages is one of the biggest challenges facing the NHS in delivery of its long-term plan. The current number of vacancies is unsustainable: there are more than 100,000 vacancies (1 in 11 posts) across the NHS, with around 40,000 vacancies for nurses.15 Again, there is striking variation across geographical areas and specialisms, with shortages of consultants, acute physicians and emergency physicians.
11. The UK's exit from the EU has also created uncertainty over staffing: there is the risk that existing workforce shortages may be exacerbated. The Department has given us some assurances: the number of people from the EU working in the NHS has increased since the referendum, it is committed to expanding the British workforce and it is working with the Home Office on future immigration policy reflecting the need to recruit more permanent staff for the NHS. These are, however, at the moment, just ambitions. The Department does not appear to have a clear plan for recruiting staff after UK leaves the EU. We are concerned that it still has not published its interim workforce plan, despite committing to do so by the end of April 2019.
12. Long term financial and staffing pressures are encapsulated in the issues facing mental health services for children and young people, which we investigated at the end of last year. Services are over-stretched: in 2017-18, only three in ten young people with a mental health condition received NHS-funded treatment and many more encountered unacceptably long waits.16 NHS England said that recruitment and retention of the workforce was the single biggest risk to achieving its ambitions for mental health services for children and young people. We need to see clear action to tackle these problems.
___________________________________________
12 Committee of Public Accounts, Department of Health and Social Care accounts 2017-18, Seventy-First Report of Session 2017-19, HC 1515, 19 December 2018, Summary, p 3
13 National Audit Office, NHS waiting times for elective and cancer treatment, 22 March 2019
14 Committee of Public Accounts, NHS financial sustainability: progress review, Ninety-first report of Session 2017-19, HC 1743, 3 April 2019
15 Committee of Public Accounts, NHS financial sustainability: progress review, Ninety-first report of Session 2017-19, HC 1743, 3 April 2019
16 Committee of Public Accounts, Mental health services for children and young people, Seventy-second report of Session 2017-19, HC 1593, 11 January 2019