The National Audit Office (NAO) report found that repeated DH bailouts for hospitals in deficit had totalled £1bn over the past five years. It said ‘urgent action’ is needed by many providers to avoid financial collapse and create a sustainable NHS.
Margaret Hyde, chairwoman of the House of Commons public accounts committee, described the finding that there had been a three-fold increase in bailouts as ‘shocking’.
‘It is shocking that over the past year alone the amount the DH has had to spend on bailing out trusts in financial difficulty rose by 333%; up from £76m in 2010/11 to £253m in 2011/12.’
Half of PCTs say they are worried about the financial sustainability of their healthcare providers and the NAO report said it was unclear whether clinical commissioning groups would provide financial support in the way that SHAs and PCTs have done.
The report reveals that despite the financial distress of some trusts there is a surplus of £2.1bn across the NHS as a whole. However, surplus funding held by foundation trusts cannot be reclaimed by the DH to transfer to other providers.
Commenting on this, the NAO said that if trusts are allowed to go bust, ‘it would be unacceptable for people in poorer communities to suffer from poorer health services as a result, exacerbating the postcode lottery that already exists’.
In the past year, 10 NHS trusts, 21 NHS foundation trusts and three PCTs reported a combined deficit of £356m and a PCT census shows that a further 15 NHS trusts and seven PCTs may have reported deficits had they not received direct financial support.
Support and bailouts
South London Healthcare NHS Trust has received significant support with bailouts reaching £79m while Barking and Havering and Redbridge University Hospitals NHS Trust received £55m.
The DH anticipates that NHS trusts and NHS foundation trusts are likely to need up to £300m more by the end of 2012/13.Amyas Morse, head of the NAO, said that although the NHS is maintaining strong finances in a period of austerity it ‘is clear, however, that parts of the service are under strain’.
Mr Morse added: 'For value for money to be delivered in future, two things are required: firstly, careful management of the risks created by transition to a new commissioning model; and, secondly a coherent and transparent financial support mechanism which outlines when trusts should be supported, or allowed to fail.'