Warnings despite upturn in NHS finances

Health bosses are warning the NHS in England is still in a precarious position despite an upturn in its financial performance in recent months.

Last year NHS trusts recorded their biggest ever overspend, but accounts for the first quarter of 2016-17 suggest they have started getting their finances back on track.

A deficit of £461m was accrued compared with over £900m this time last year.

But NHS leaders said this had only been achieved after a big cash injection.

Hospitals, where most of the problems are being seen, along with ambulances, mental health units and community services are being given access to a special one-off £1.8bn fund this year to help them get deficits back under control.

And this appears to have enabled them to get much closer to balancing the books.

The figures, from the regulator NHS Improvement, cover the period April to June and account for two-thirds of the health budget, as spending on GPs, training, drugs and public health are accounted for separately.

How has the NHS has tackled the deficits

Last year was the worst on record for the NHS in England in terms of finances. Three months into 2016-17, and the accounts look much rosier.

But the message from within the health service is don't be fooled. First, NHS trusts have an incentive to be optimistic at this early stage - it allows them to access the £1.8bn "bailout" pot set aside for them.

Secondly, in the coming years the budget rises for the NHS will be much smaller than the one seen this year. Unless something is done to stem the rise in demand being seen, a return to large overspends seems inevitable, many believe.

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But despite the improvement, hospital bosses warned the heath service was not yet out of the woods.

A survey by NHS Providers, which represents NHS trusts, found a number of finance directors were still struggling despite the cash injection.

Some 84 finance directors - a third of the total - took part with one in five saying they were in a worse position than expected.

And nearly four in 10 said they did not think they could meet the financial targets that had been set by regulators for this year, with another third unsure whether they could.

NHS Providers chief executive Chris Hopson said it was "positive news" that the runaway deficits had slowed after the record £2.45bn overspend posted at the end of 2015-16.

But he said the survey showed things could still deteriorate in the future.

"These findings show the strain NHS trusts are operating under. There is now a clear and widening gap between what the NHS is required to deliver and the funding available."

And he predicted the situation would "only get worse" in the coming years as the annual budget increases for the rest of the Parliament after 2016-17 were going to be much more modest than the £3.8bn extra put in this year, which had allowed ministers to set aside the £1.8bn pot specially for NHS trusts.

He said in the long term, the "sums simply don't add up" and called for a debate about funding and what the NHS could and should provide.

Richard Murray, of the King's Fund think tank, said while the financial figures had improved, performance on many other measures such as waiting times was worsening, with hospital bed occupancy "eye-wateringly high".

A Department of Health spokesperson said: "The NHS is making progress towards balancing the books, but there is no room for complacency.

"That's why it needs to stick to its strong financial plan, supported by our £10bn investment and series of measures to help hospitals become more efficient and reduce the use of expensive agency staff."