The NHS is entering “seriously dangerous” financial territory which will have ramifications for patients and all levels of NHS management, according to the King’s Fund’s latest Quarterly Monitoring Report.

The report’s survey of finance directors showed that 64 percent expect to overspend by the end of this year – including 88 percent of acute trusts. The authors added that overspending on this scale is “a symptom of more systemic problems – not least a service struggling to meet patient demands with inadequate funding to do so”.

“Continuing demand pressures are evident from increasing trends in hospital activity – from referrals to outpatient and A&E attendances as well as elective and, to a lesser extent, emergency admissions. While more work can mean more income for providers, year-on-year real reductions in the tariff have attenuated income growth.”

Moreover, the proportion of trusts forecasting a deficit at the end of this year is the worst since the QMR started. Rising staffing costs are noted as one of the main drives behind increases in deficits.

The findings come in the wake of a NHS Trust Development Authority and Monitor report that found that the NHS’ net overspending in the first quarter of 2015 was £930 billion. The King’s Fund says that this could mean that the total overspend for the year could easily top £2 billion.

The Fund also notes that the government’s pledge of a spending increase of £8 billion by 2020/21 still “leaves little room for manoeuvre”.

The report found that while the state of finances is “deeply concerning” to most finance directors, staff morale, delayed transfers of care, and engagement in performance issues by clinicians are also areas of serious concern.