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Hospitals ordered to take tough new measures to cut deficits

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NHS providers have been told to take a raft of emergency measures to try to reduce the huge deficit predicted by the sector this year.

  • NHS providers told by Monitor and teh TDA to adopt tough measures to bring down deficits
  • Monitor chief executive calls current forecasts “simply unaffordable”
  • Letter outlines where trusts makes cost cuts
  • CCGs will be ordered to suspend RTT fines for providers


In a letter sent on Monday afternoon, Monitor chief executive David Bennett has restated that the current financial forecasts for 2015-16 are “simply unaffordable”, and asked each foundation trust to revisit their plans.

David Bennett

David Bennett has asked all providers ‘to look at what more can be done’ to reduce the sector’s deficit

The letter, seen by LGC’s sister title Health Service Journal, tells trusts to “ensure vacancies are filled only where essential”, and ensure that existing safe staffing guidance has been adopted in a “proportionate and appropriate way”.

It also advises that financial impact should be considered while managing waiting lists, as well as patient experience.

Foundation trusts with large deficits have been given specific new end of year outturn figures which Monitor believes they can achieve if they make the cost cuts outlined.

Clinical commissioning groups will also be ordered by NHS England to take a number of steps to ease the pressure on providers, the letter says.

These include a suspension of all fines and penalties relating to referral to treatment times, backdated to the start of the current financial year, and transparency over any uncommitted reserves.

A similar letter has been sent to non-FTs by the NHS Trust Development Authority, HSJ has been told.

As previously reported, the provider sector has forecast a total deficit of more than £2bn for 2015-16.

The letter also asks FTs to take the following steps:

  • implement fully the Agenda for Change 2013 agreement on pay progression;
  • where there is insufficient capacity and where possible, to transfer activity to another provider that has already funded but underused capacity;
  • ensure that contracts with commissioners provide for adequate levels of activity, and are agreed as soon as possible.

Mr Bennett writes: “As you know, the NHS is facing an almost unprecedented financial challenge this year. Current plans are quite simply unaffordable.

“As I have said before, if we are to do the best we can for patients we must leave no stone unturned in our collective efforts to make the money we have go as far as possible.

“We are already reviewing and challenging the plans of the 46 foundation trusts with the biggest deficits.

“However, it is clear that this process will not close the funding gap and so we need all providers - even those planning for a surplus this year - to look again at their plans to see what more can be done.”

The letter also said: “Ministers have been sighted on these options and are ready to support all providers to reduce their deficits in a managed way although, of course, all actions should be consistent with your responsibilities for safety and the delivery of constitutional standards.”

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