An increasing number of NHS organisations are struggling with their finances, a report suggests, after it found the number of trusts and foundation trusts running a deficit more than doubled in just one year.
While NHS finances are healthy overall, the number of trusts which are running a deficit rose from 13 in 2010-11 to 31 in 2011-12, according to the Audit Commission report.
Thirty-nine NHS trusts reported a poorer financial position in 2011-12 than in the previous year and 18 NHS trusts and foundation trusts received financial support from the Department of Health, the report states.
In 2011-12, the NHS as a whole made £1.6bn in efficiency savings and a large number of trusts reported an improved financial position.
Andy McKeon, managing director of health at the Audit Commission, said: “While nationally the NHS appears to be managing well financially, and preparing itself for the changes and challenges ahead, a number of PCTs (primary care trusts) and trusts are facing severe financial problems.
“The Department of Health and other relevant national authorities need to focus their attention on the minority of organisations whose financial position is deteriorating, and on their geographical distribution and service standards.”
The NHS organisation with the highest deficit is South London Health Care Trust - which was put under the care of a special administrator earlier this year for being on the brink of bankruptcy.
The trust, which provides care for patients living in the London boroughs of Bexley, Bromley and Greenwich, was the first trust to be put on an “unsustainable providers regime” because it was losing £1 million a week.
No decisions have yet been made about how the trust will be run in the future but recently Matthew Kershaw, the special administrator appointed to put the trust back on a viable footing, invited providers of NHS care, including private companies and NHS organisations, to express whether they would be interested in running services at the trust.
Peter Carter, chief executive and general secretary of the Royal College of Nursing, said: “The NHS is tasked with saving £20bn in England alone, and NHS hospitals and organisations are dealing with this reality on a daily basis.
“Patients will question why as many as 61,000 posts are at risk in the NHS when there is an overall surplus of £1.6bn. To date, we have not seen evidence that this surplus is being reinvested into patient care, and a rigorous analysis of NHS finances is now needed.
He added: “We are also concerned that for those trusts who are running up huge deficits, often due to badly negotiated PFI deals, it can appear tempting to reduce expenditure by thoughtless reductions in staff and services. Instead, they need to focus on keeping patients healthy.
“Nurses, like patients, will be anxious to avoid a situation where trusts run up enormous deficits which then lead to a crisis in patient care.”
NHS Confederation chief executive Mike Farrar said: “This is the time for the NHS Commissioning Board to help providers, not with bailouts, but by releasing money to new clinical commissioning groups so they can work with providers to help put them on a sustainable footing by changing the type and range of services they provide.
“Now is the time for big investment in community and primary care. We need to do this to ensure hospitals can sustain local services in the long run.
“Fundamental changes to the way we provide care are necessary if the NHS is to maintain financial balance and become more responsive to patients’ needs.
“Doing this will require some difficult decisions and in some cases will require changing or closing down some services, but this can only happen if we build up the capacity in the community and in primary care to enable people to be treated at home.”
A Department of Health spokesman said: “We know the NHS is facing even greater pressures, not least from rising demand and costs.
“That’s why we are investing an extra £12.5bn in the NHS, modernising it and improving efficiency while at the same time improving choice for patients to drive up the quality of patient care.”