Statement on 2012-13 update on indicators of fin

Despite an overall surplus of £2.1 billion in 2012-13, a significant number of NHS trusts face severe financial difficulties. 25 trusts failed to break even, and that figure would probably have been much higher – 44 – if other trusts had not been bailed out. NHS trusts in difficulty needed to rely on extra cash handouts and taxpayer support, together totalling £466 million, from the Department of Health, strategic health authorities or primary care trusts. When that one-off support is removed from the equation, NHS trusts had an average deficit of £1 million. 12 PCTs also needed additional financing of £157 million.

Some NHS trusts, including my own, Barking, Havering and Redbridge, remained in deficit even with financial support. This situation is clearly not sustainable and needs to be urgently addressed if trusts are to deliver the necessary efficiency savings without compromising patient care.

19 foundation trusts were in breach of the minimum finance and governance standards set by Monitor. Of these foundation trusts, four have been in breach for over three years. I am concerned that 40 NHS foundation trusts, or 28%, would not meet Monitor’s requirements if they were to apply for their foundation status now.

Worsening finances and governance in the health system are a real concern for taxpayers and patients alike. To protect services, the Department of Health, Health England, the NHS Trust Development Authority and Monitor must all make a concerted effort to reverse this trend.