Public Accounts Committee

Sustainability and financial performance of acute hospital trusts inquiry

Inquiry status open

Report published 15 March 2016. Awaiting Government response

Report published

There has been significant change in the NHS since the introduction of the Health and Social Care Act 2012, and the NHS will need to continue to adapt in response to increasing patient demand, new treatments, technologies and funding constraints. The NHS Five Year Forward View highlights an estimated £22 billion gap between resources and patient needs by 2020–21. The health service must be financially stable to deliver high-quality services for patients both now and in the future.

Health is an area of public spending that has been protected in recent years. However, finances have become increasingly tight. In recent years, hospital trusts have not kept their spending within budget. In February 2015, the Committee’s report, Financial sustainability of NHS bodies, concluded that the financial health of NHS bodies had worsened and that savings required across the NHS will be difficult to achieve solely by continuing with the same approach used in recent years.

NHS bodies in deficit

In this fourth report on financial sustainability in the NHS, the NAO show that the financial position of NHS bodies has significantly declined since the Committee’s last report on the subject. NHS bodies as a whole were in deficit for the first time in 2014–15. The deterioration in the financial performance of NHS trusts and NHS foundation trusts has been severe and worse than expected. The report takes a closer look at the two-thirds of NHS trusts and NHS foundation trusts that provide acute hospital services such as accident and emergency services, inpatient and outpatient services, and in some cases specialist or community care.

The report shows that 60% of acute hospital trusts had a deficit in 2014–15; a significant number are in serious financial distress; and many are struggling to make savings to improve their financial position. The report also examines the factors affecting the financial sustainability of trusts. It considers the approaches taken by the Department, NHS England, Monitor and the NHS Trusts Development Authority to support trusts to achieve financial sustainability.

Latest evidence

  • 18 Jan 2016 - Sustainability and Financial Performance of Acute Hospital Trusts - oral evidence | PDF version (PDF348 KB) HC 709 | Published 03 Feb 2016

    Evidence given by Paul Mears, Chief Executive, Paul von der Heyde, Chairman, and Tim Newman, Chief Financial and Commercial Officer, Yeovil Hospital, and Shahana Khan, President, Healthcare Financial Management Association; Dame Una O'Brien, Permanent Secretary, and David Williams, Director General Finance and NHS, Department of Health, Simon Stevens, Chief Executive, NHS England, and Jim Mackey, Chief Executive, NHS Improvement (at 4.30pm).

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