Yahoo Finance The NHS may not be financially sustainable, says spending watchdog
The NHS could be financially unsustainable in the long-term due to huge deficits, waiting times and growing waiting lists, according to an official government body.
In its annual report on the financial sustainability of the NHS, the National Audit Office (NAO) laid out concerns about the department’s ability to achieve the goals set by the government in return for the long-term funding settlement it was awarded in June 2018, which saw NHS England’s budget rise by an extra £20.5bn ($26.35bn).
According to the NAO, which audits public bodies as well as government departments, the recent NHS long-term plan set out a “prudent approach” to achieving these goals, but there are a number of risks to the delivery of it.
READ MORE: Nearly 40% of local NHS bodies mismanaging taxpayer money
While the NHS nearly achieved overall financial balance in 2017 to 2018, the NAO found offset surpluses and deficits that hid overall disparities in financial health and patient experience. NHS England had an underspend of £1.2m during the year, but clinical commission groups (CCGs) together reported an overspend of £213m and trusts reported a combined shortfall of £991m ($1.27bn).
Waiting lists are one of the biggest concerns for the NHS, the NAO found. There are now 4.1 million patients waiting for non-urgent treatment — up from 2.5 million in 2013, and the auditor estimates it would cost £700m to reduce these lists to the level last seen in March 2018.
Equally concerning are waiting times, which continued to slip last year. The NAO report shows in 2017 to 2018, only 88% of accident and emergency patients were seen with four hours — against a government target of 95%.
While the NHS’s funding settlement equates to a 3.4% average real terms (accounting for inflation) increase in funding from 2019/20 to 2023/24, this applies only to the budget for NHS England and not the entire department. Because of this, it does not cover some key areas of health spending such as education, public health and capital investment.
VIDEO: Matt Hancock announces £1bn funding for the NHS
In addition, without a long-term funding settlement for social care, local NHS bodies are concerned it will be very difficult to make the NHS sustainable, according to the report.
The NAO also highlighted previous studies it had done, which show past funding boosts have been spent on immediate, short-term pressures with less being put towards changes required for long-term sustainability. It said there is a risk extra funding will be not be used effectively due to staff shortages, as more money may be used to pay expensive agency staff.
It also said it has made a number of recommendations to the NHS to ensure additional funding is spent wisely. These recommendations include testing whether local plans to manage demand are realistic, ensuring key risks to delivery of the long-term plan are identified, and developing a sustainable long-term plan to support trusts in severe financial difficulty.
VIDEO: Making the NHS “fit for the future”
Amyas Morse, head of NAO, said: “The promise of longer-term sustained funding growth for NHS England, together with a long-term plan, is a positive and welcome development. This should enable a more strategic approach to spending and we can expect to see a less turbulent financial context than in the last few years, if the funding is spent wisely.
“The plan we have seen so far seems to be based on prudent assumptions, but we will really be able to assess whether the ambitions set forth are supported by funding when we can see the results of the Spending Review for the non-NHS England parts of the health service, and the funding for social care.”
