NHS Trusts ran up £791m deficit last year despite making savings

NHS hospital and ambulance trusts ran up a combined deficit of £791m in the last financial year, more than £200m above the original budget target.

The figure was confirmed by the NHS three weeks after Sky News revealed that the final figure would be at least £700m for 2016-17.

The year-end financial position was due to be confirmed at the end of May, but publication was delayed until after the election by the Department of Health, citing concerns that the information was politically sensitive.

The deficit is an improvement on the £2.4bn recorded in 2015-16, but came despite NHS Trusts receiving £1.8bn in emergency funding to try and fill the gap.

Jim Mackey, chief executive of NHS Improvement, confirmed the figure at the NHS Confederation conference in Liverpool.

He praised Trusts for making £3.1bn of savings, including £700m cut from agency staff costs, but warned them that they will come under pressure to deliver similar cuts in the current financial year.

He revealed the financial target for 2017-18 is for Trusts to record a combined deficit of £496m, and make a further £3.6bn of savings.

The good news is you have delivered the impossible," he said. "The bad news is you are going to have to do it all again."

Mr Mackey told Sky News the biggest challenge for Trusts this year would be managing the demands on staff already working close to capacity.

His concern over staffing wears echoed by former Conservative health secretary Stephen Dorrell, now chairman of the NHS Confederation, who called on the Government to "fairly reward" NHS staff.

Mr Dorrell appeared to suggest the controversial one percent pay cap that has applied to NHS staff for seven years should be lifted.

"We need to ensure that our staff are fairly rewarded for the commitment they make," he said.

"We all know that financial resources are stretched. But we cannot expect to benefit from the continued commitment of staff if they feel public sector pay policy offers them no reasonable prospect of meeting their private needs and aspirations."

His comments come as the Government faces increasing pressure to re-visit public sector pay in the wake of an election that saw Theresa May lose her majority.

Michael Gove, restored to the Cabinet, said earlier this week that austerity plans may have to be "eased".

The Royal College of Nursing has threatened strike action if the pay cap, which it says has amounted to a 14% cut over seven years, is not lifted.

(c) Sky News 2017: NHS Trusts ran up £791m deficit last year despite making savings