Every week the news seems to feature at least one more item covering the current financial state of the NHS, and it is never good news. Budget cuts, large debts, overworked staff and services, many believe that it is stuck within an ongoing crisis. Change is evidently required to create a sustainable model and to help secure its future, and while it would be useful to see what another audit of the NHS would bring up, would it really change anything?

Previous Audit Findings

The National Audit Office reported on the financial state of the NHS at the end of 2016 and uncovered some worrying findings. Financial problems of the NHS were described as endemic, having worsened so much from 2015 that the situation would no longer be sustainable. Chief among the audit’s findings were:

  • Two-thirds of health trusts in England are in deficit
  • Their total debt trebled in the 2015-2016 period to £2.45 billion
  • The NHS entered the 2016-17 financial year in a worse than expected financial position, with indications that the financial strain is having an effect on access to services and quality of care
  • £950m was transferred from a budget for capital projects to revenue budgets for covering staff wages
  • Department of Health (DoH), NHS England and NHS Improvement estimates for cutting the deficit had not been properly tested

Through a range of measures such as capping public sector pay and renegotiating contracts, the DoH, NHS England and Improvement claimed that £6.7 billion of efficiency savings could be made.

What’s Causing the Financial Problems?

There are a number of reasons behind the financial pressures which the NHS is now under. These range from there being an increasing demand from patients, with people living longer and the population growing, while at the same time having to deal with significant financial cuts on services, staff, equipment and more. Essentially, there’s not enough money to cover everything the NHS needs to properly do its job.

Understandable factors like the financial crisis, current and previous governments, to more scape goats such as old people and immigrants, are constantly blamed by the media. Yet it basically comes down to needing to balance the NHS’ financial books without leading to a fall in quality or quantity of services. So far there seem to be few solutions, and whether further auditing from a non-governmental body such as RSM would pick out anything to help remains to be seen.

The Budget Increase

Planned spending for the DoH rose to £126 billion for the NHS in England for 2018-19, which represented a £1.6 billion boost compared to the planned budget of £124.4bn. While this may sound like positive news, it was still less than half of the £4bn which the health service’s boss claimed was required to cover all costs for the year.

This would appear to be a step in the right direction for the NHS, by getting more money flowing in to cover its services. However, as it is still less than required to cover everything, with cuts ongoing, the financial future of the health service remains somewhat unstable.

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