North East hospitals face cash shortfall, MPs warn

Hospitals across the country are running into deficit and staff salaries must increase, say the Commons Health Committee

Chappells Paul A Hospital Accident and Emergency department
A Hospital Accident and Emergency department

NHS hospitals across the country are facing a funding shortfall and a morale crisis among staff, MPs have warned.

Foundation hospital watchdog Monitor reports that 38 of its trusts are running up deficits, while 31 other hospital trusts are set to end the year over budget.

The Commons Health Committee, which includes Easington MP Grahame Morris, has highlighted the financial concerns following an inquiry into funding for health and social care.

The committee, which is chaired by former Conservative Health Secretary Stephen Dorrell, warned: “It is widely acknowledged that many trusts are finding their financial position increasingly difficult.”

The inquiry also urged the Government to end a long-standing public sector pay freeze, which means pay rises are capped at 1% until 2015-16, warning it was damaging staff morale. And it warned that the attempts to integrate health services and social care services, which were traditionally provided by local authorities, had been too slow to get off the ground.

The MPs said that it was unfair and unhelpful to allow pay in the NHS to fall compared to salaries in other parts of the economy.

They welcomed the Government’s decision to introduce a 1% rise – which replaced the previous policy of simply freezing pay – but warned that paying staff a fair salary was essential if the health service was to change.

MPs said: “The Committee welcomes the Government’s recognition that the future of the health and care system cannot be built on an open-ended pay freeze. If the health and care system is to be a good employer (which it needs to be if it is to deliver high quality care) it needs to undertake transformative change in order to ensure that its committed staff are better able to meet the needs of users of its services.”

The fact that so many trusts were going over budget was evidence that reforms were not currently being managed successfully, the MPs said.

They said 48% of trusts were forecasting a deficit in the current financial year, warning: “We have drawn attention to the urgency of transformative change of the care model if the needs of patients are to be met.

“The fact that the number of NHS trusts and NHS foundation trusts reporting underlying deficits continues to grow represents evidence that the pace of change has not been sufficient to meet the challenge.”

But the inquiry warned that some of the changes the NHS needed would involve reducing hospital services and focusing more on preventing illness and providing care at home – changes which the medical profession believed would lead to a better quality of healthcare but which tended to be unpopular with the public. Sir David Nicholson, the chief executive of the NHS, has warned that health and social care services need to work more efficiently in order to meet rising demand for care while their funding barely grows in real terms.

But Mr Dorrell said: “What we have heard during our inquiry indicates that while many of the straightforward savings have been made, we have not seen the transformation of care on the scale which is needed to meet demand and improve care quality.”

Funding for the NHS was static while the budget for social care had fallen.

And the new Health and Wellbeing Boards set up by the Government to replace health authorities, which were designed to give medical professionals more direct control over the NHS, were struggling, he said.


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