Money set aside to stabilise NHS England was spent on dealing with day-to-day pressures, National Audit Office finds

This article is more than 2 years old

This article is more than 2 years old

A cash injection of £1.8bn that was supposed to be spent stabilising the health service’s finances in England has instead been used to cope with day-to-day pressures, a report by official auditors has found.

The NHS received the money from the sustainability and transformation fund in 2016-17. It was meant to set up structures in order to survive on less money from 2017-18 onwards, the National Audit Office said.

The cash was instead spent by NHS England to keep the service afloat, auditors said, prompting questions about the government’s preparedness for future financial crises.

Q&A Why is the NHS winter crisis so bad in 2017-18? Show Hide A combination of factors are at play. Hospitals have fewer beds than last year, so they are less able to deal with the recent, ongoing surge in illness. Last week, for example, the bed occupancy rate at 17 of England’s 153 acute hospital trusts was 98% or more, with the fullest – Walsall healthcare trust – 99.9% occupied. NHS England admits that the service “has been under sustained pressure [recently because of] high levels of respiratory illness, bed occupancy levels giving limited capacity to deal with demand surges, early indications of increasing flu prevalence and some reports suggesting a rise in the severity of illness among patients arriving at A&Es”. Many NHS bosses and senior doctors say that the pressure the NHS is under now is the heaviest it has ever been. “We are seeing conditions that people have not experienced in their working lives,” says Dr Taj Hassan, the president of the Royal College of Emergency Medicine. The unprecedented nature of the measures that NHS bosses have told hospitals to take – including cancelling tens of thousands of operations and outpatient appointments until at least the end of January – underlines the seriousness of the situation facing NHS services, including ambulance crews and GP surgeries. Read a full Q&A on the NHS winter crisis

Meg Hillier MP, the chair of the Commons public accounts committee, said the findings were shocking for those people affected this winter by overcrowded hospitals and cancelled operations.

“The committee has called for a long-term plan for the NHS – the recent winter crisis hammers home why this is so vital,” she said. “The Department of Health’s recent cash injections have been spent on patching up the problems, not preparing it for the future.”

Since the NHS was formed in 1948, health spending in real terms has increased by 3.7% a year on average.

This rate of increase has slowed since 2010, the report said, and the NHS England budget will increase by an average of 1.9% a year between 2014-15 and 2020-21.

The NHS was given the additional £1.8bn in preparation for the service having to survive on significantly less, the report said. It was also intended to give it stability to improve performance and transform services, in order to achieve a sustainable health system.

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The money helped the NHS improve its financial position, auditors said. The combined trust deficit reduced from £2.4bn in 2015-16 to £791m in 2016-17, they said.

Despite its overall financial position improving, the report said the health service was struggling to manage increased activity and demand within its budget and had failed to meet NHS access targets.

Programmes meant to rebalance its finances have restricted money available for longer-term transformation, the NAO said, which is essential for the NHS to meet demand, drive efficiencies and improve the service.

One example given in the report said the Department of Health had transferred £1.2bn of its £5.8bn budget for capital projects towards funding the day-to-day activities of NHS bodies.

Some trusts are receiving in-year cash injections, most of which are loans from the department, which have worsened rather than improved their financial performance, the report found. Extra cash support increased from £2.4bn in 2015-16 to £3.1bn in 2016-17.

Auditors warned that “repeated short-term funding boosts could turn into the new normal”, even though funding with a long-term plan would be more effective.