The chief executive of NHS England has warned that next year will be “incredibly tough” for the NHS, leaving areas which already have “deep problems” with little chance of recovering.
Simon Stevens’ prognosis for the state of the NHS finances was delivered to MPs on the parliamentary accounts committee on Wednesday, which also heard that most foundation trusts expected to end 2014-15 in the red.
Monitor chief executive David Bennett told the committee that 81 of the 147 foundation trusts in England expected to end the financial year in deficit, the vast majority of which were hospital trusts.
Mr Stevens told the committee that “next year is going to be incredibly tough” and that “those places with deep problems now will have them next year”.
Asked if hospital chief executives could expect “bungs” at the end of the year if they ended it in deficit, Mr Stevens was emphatic they would not.
He suggested there would be changes to the marginal rate of tariff which sees hospitals paid only 70 per cent of the tariff for non-elective admissions over 2008-09 levels.
Mr Stevens added that the payment system would be “rebalanced” to help smaller trusts.
The NHS Five Year Forward View, published last month, showed trusts with a turnover of less than £400m ran at a small loss of -0.4%, compared with 5% in larger trusts.
Department of Health director general of finance Richard Douglas – also presenting evidence to the committee – was quizzed by MPs on the feasibility of buying NHS trusts out of their private finance initiative deals.
He said the department looked at individual proposals for this but there was an affordability issue to buying trusts out.
He added that the service spent £1.8bn on PFI repayments a year.
Earlier this year Northumbria Healthcare Foundation Trust managed to buy itself out of its PFI using a loan from its local authority.
Asked about surplus land sales, Mr Douglas said NHS England had traditionally over-invested in hospital buildings, compared to IT and equipment and that this would need to be rebalanced.
Monitor is this week expected to release its projections for the year end based on the financial performance of FTs at the end of quarter two.