The systematic and deliberate cash starvation of the NHS by Tory-led governments since 2010 has opened up an increasingly visible crisis, now leading to panic among management.
NHS providers in England could end the year a record £2.3 billion in deficit, according to the latest estimates from the King’s Fund, published last week.
The report – based on a survey of 83 NHS trusts - also found two thirds of them relying on extra cash handouts from the Department of Health, or digging into reserves to stay afloat.
Almost all NHS trusts in deficit
It’s one of several surveys of NHS finances in England lately that has come to almost identical conclusions on the scale of the problem.
And there is a real threat of more damaging cuts in the availability and quality of services.
Monitor, the NHS regulator, has revealed that current deficits are already £2.3 million and estimated the year-end figure at a massive £3 billion.
My own survey of the Board papers of all 156 acute hospital trusts for Keep our NHS Public shows that the actual deficits of acute hospital trusts alone came to £2.3 billion by the end of December – with most set to rise further by April.
More than nine out of ten acute trusts are in the red – to an average of over £15 million.
25 trusts each face deficits of more than £30 million – and three have shortfalls in excess of £70 million. The largest NHS trust in England, Barts Health, is in debt at a monster £134 million. London’s acute trusts have a deficit of over half a billion pounds between them.
A number of those with big deficits have major PFI schemes – notably Barts, Calderdale & Huddersfield, Mid Essex, Mid Yorkshire, Sherwood Forest and Worcestershire.
But some PFI trust figures have been distorted by extensive bail-out funding. And many of the biggest problems are, surprisingly, in trusts without these inflated overheads, including Lincolnshire, Hertfordshire, Devon and several in Essex.
Risking a repeat of mid Staffordshire?
78 – half of all acute trusts – are showing deficits above £10 million. That’s the figure that triggered the crisis at mid Staffordshire hospitals in the mid-2000s, where management, desperate to clear deficits, slashed numbers of nursing and medical staff – reducing services to disastrously poor levels resulting in a national scandal.
But this has not deterred Jeremy Hunt from demanding NHS trust managers clear deficits before they receive any of the £1.8 billion "transformation fund" in 2016-17. His letter to foundation and NHS trusts now risks a further widespread repetition of similar cuts in staffing and reduced quality healthcare.
Of course Hunt has covered his back by demanding that to stand any hope of accessing the limited new money allocated in George Osborne's Comprehensive Spending Review trust bosses balance the books ‘without compromising patient care’.
Cuts and the risks to patient care
But many trusts were already struggling to comply with the nationally-imposed cap on agency staff spending. More than one in five trusts have told the King’s Fund that this cap could impact on quality of care.
Hunt threatens that boards which fail to clear deficits will be removed and replaced – although it's far from clear how the many dozens of trusts now deep in the red could all be subjected to this treatment.
But it gets worse: a letter from Monitor and the Trust Development Agency leaked to the Guardian has urged trusts in deficit to agree actions including "headcount reduction" – in other words large-scale job losses. This could cause chaos in local services all over the country.
As the deficit-stricken Mid-Staffs trust bosses discovered, the quickest way to save larger sums is to reduce numbers of higher paid nurses and doctors (rather than cut back on lower paid staff). But as they also found, the damage done to the quality of care can be equally severe and swift.
According to King’s Fund figures it’s necessary to cut 25 nurses to save £1m. So by that measure the average trust would need to axe 375 nurses to balance the books that way!
Want Osborne’s ‘new’ cash? Only if you promise the impossible
Now new pressure is also being brought to bear on trust management by a link-up of chief executives of the CQC, Health Education England, NICE, NHS Improvement, Public Health England and NHS England – a reminder in itself of how fragmented and disjointed the NHS has become after 15 years of moves to create a competitive market in place of a coherent public service.
According to National Health Executive (NHE) magazine, these august bodies have now joined forces to lay down a rigorous checklist of hurdles that trusts and Clinical Commissioning Groups have to surmount in order to lay hands on a share of the £1.8 billion “extra money” announced by Osborne.
Each body needs to draw up a “Sustainability and Transformation Plan” (STP), and comply with a series of “strict and non-negotiable” conditions. They must appoint a “senior and credible leader” to drive the implementation of the STP, and address gaps in local health care, health and wellbeing, care and quality, finance and efficiency.
On February 29 NHS England will apparently publish yet more detailed requirements which STPs have to address – including prevention of illness (despite Osborne’s £200 million cut in public health spending), earlier diagnosis, more effective treatment, and quality improvement – such as moving to seven day services.
The bottom line is that all trusts will be required to deliver “the key must-dos” from the “list of nine must-dos” developed by NHS England.
This sounds like – and is – a load of bureaucratic hocus-pocus, to divert attention from the bottom line: the impossible demands on trust bosses to get a quart of treatment from a pint pot of funding.
These panicked moves follow on five years of frozen funding under David Cameron's governments, which have already reduced the NHS to a cash-strapped shadow of the service the Tories inherited when they took office in 2010.
Missed targets hitting patients
Hospital trusts are not just missing financial targets, but also missing targets for treatment of A&E patients, treatment of cancer patients, treatment of waiting list patients (one in twelve now waiting more than 18 weeks for operations) – and massively failing mental health patients.
They are also struggling to discharge patients from hospital beds, not least as a result of the brutal and continuing cutbacks and privatisation in social care implemented year after year as a result of local government spending cuts.
For five years NHS funding has been frozen in real terms while the population has grown, costs have risen, and staff have become more difficult to recruit and retain as pay levels have fallen steadily further behind since 2010, resulting in soaring spending on agency staff.
The financial squeeze has even hit the private health sector, resulting in under-funded contracts. The private hospital sector is now complaining loudly that less than 1% of the capacity it has offered to the NHS to deal with elective cases over the winter is being used, as trusts and CCGs try to minimise spending.
But the Tories could pay a heavy political price for their decision to crash the NHS in order to convince the public that it’s “unsustainable” and that options for private funding are the only way forward.
The latest call for trusts to balance the books by cutting staff is a sure-fire recipe for even longer growing waiting lists, waiting times, trolley waits – and all the misery some of us remember from the grim Thatcher years in the late 1980s.
But remember most of the patients waiting in corridors for beds are elderly – and so are most Tory voters: for most of them, and for anyone needing emergency care, private care is not even a theoretical option.
The Tory electoral “victory” with less than a third of the votes has left Cameron with a majority of just 12, which could be eroded rapidly if local hospitals and services are allowed to collapse in key Tory seats.
There has never been a greater threat to the NHS, or a greater need for a united campaign that will challenge every local cutback and half-baked privatised contract, and pile the blame for every failure and gap in care back onto central government.
And the case is even clearer for the complete reversal of Andrew Lansley’s Health & Social Care Act, which has wasted billions as well as fragmenting and disorganising the NHS.
The NHS Bill, drafted by Peter Roderick and Prof Allyson Pollock, which is being proposed in parliament on March 11, takes this question head on and aims to restore an NHS that is publicly owned, publicly delivered and publicly accountable.
There will be events outside Parliament and across the country on March 11 to show support for this: now is the time to make sure Labour and other MPs are called upon to be there that day and back the Bill.
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