Public Accounts Committee chair Margaret Hodge says radical change is needed if the National Health Service is to become financially sustainable.

Her comments come alongside a PAC report into NHS finances, which concludes that the savings required to secure stability will be “difficult to achieve” by continuing with the same approach used in recent years. 

Things are looking decidedly bleak for the NHS on the cash front. The percentage of trusts and foundation trusts in deficit jumped from 10% in 2012/13 to 26% in 2013/14, while Monitor has found that 80% of FT providing acute hospital services were reporting a deficit by the second quarter of 2014/15. 

Also, the overall net surplus achieved by NHS bodies fell to £722 million in 2013/14, and the Department of Health has poured an extra £1.8 billion into trusts in trouble between 2006/7 and 2013/14, the report points out.

"From all our work across all of government, the fragility of the NHS finances causes me greatest concern,” said Hodge.

Extra resources

Radical change is needed to the way services are provided and extra resources are required if the NHS is to become financially sustainable, including making better use of community and primary care services to ease some of the pressure on hospitals, she said.

“Making this change will require significant upfront investment, but the money available for this is reducing as the number of organisations in deficit increases”.

There is potential to garner some savings in the amount paid under private finance initiative schemes, which cost the NHS some £1.8 billion a year, Hodge noted, also pointing to opportunities to “release funds tied up in surplus capital assets that could be used for upfront investment in new models of care”. 

Read the full report here