05 Jun 2016
NHS Sees Record Overspend Of More Than £2bn

NHS Sees Record Overspend Of More Than £2bn

Trusts have come under pressure to make financial "adjustments" to their books as they are set to record the worst deficits ever.

NHS trusts in England have reported a record overspend with figures revealing they are £2.45bn in the red.

Published data for 2015/16 showed a slight improvement on the worst deficit forecast, but it will still be the poorest financial performance in a single year.

Of the 240 trusts, 157 or 65% recorded a deficit.

Earlier this year, a report containing the first nine months' worth of figures said the NHS was heading for a £2.8bn deficit across the year.

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If savings could be made in the final three months of the financial year, it was predicted this could be curbed to around £2.4bn.

For the whole of the previous year, the NHS overspend stood at £820m.

The high costs of employing agency staff has been blamed for damaging the financial position of NHS trusts.

Other cash pressures included further increases in the demand for care and continued issues over bed-blocking.

A cap on agency spending has been imposed by the Government, while spending curbs on expensive management consultants also came into force over the summer and were expected to have had an impact by the end of the financial year.

However, some trusts have said they are having difficulty covering rota gaps and keeping within the agency spending limit.

Despite the measures, some £3.64bn was spent on agency over the year - £1.4bn more than planned.

NHS trusts have also come under pressure to change the way they record their deficits in their accounts in a move to balance the books.

The Department of Health wants to keep the deficit down to within or near Treasury spending limits.

According to the Nuffield Trust, trusts had made "accountancy adjustments" to bring the deficits down.

The measures included reclassifying capital budgets as revenue, claiming for five quarters (15 months) worth of VAT rebates and reviewing accounting policies.

Jim Mackey, chief executive of NHS Improvement, said steps taken to curb spending were "starting to make real progress".

He added: "When we consider where we were six months ago, NHS providers have done a great job in reducing the planned deficit."