NHS in financial meltdown

In a significant retreat, Health Secretary Jeremy Hunt has agreed to talks with the junior doctors on their proposed new contract. Since they started their strike action, the doctors have received widespread public support. They have refused to back down in the face of government intransigence and lies, and instead have linked their struggle to the need to take action against the government’s deliberate running down of the NHS and the associated privatisation of its services.

Starting with the 2010 ConDem coalition government, the NHS has faced an unprecedented squeeze on its finances. This will continue until 2020/21, by which time NHS spending as a proportion of GDP will have fallen from 8.8% (2009) to 6.6%. GDP is forecast to grow in real terms by around 15.2% between 2014/15 and 2020/21, but NHS spending will grow by only 5.2%. The annual real-term increase in NHS spending between 2009/2010 and 2020/21 will be a mere 0.9%; it needs to be 4.5% to keep pace with rising need and the costs of advances in medical technology. This represents the difference between government lies that it is protecting NHS funding and a reality of insufficient staffing at every level and collapsing services.

The scale of the gap was revealed with the news that NHS hospital trusts in England ended the 2015/16 financial year with a deficit of £2.45bn, £461m worse than predicted, and 20 times the deficit at the end of 2013/14. The figure does not take into account emergency funding of £760m or money diverted from hospital building and maintenance schemes and equipment purchase to help with day-to-day running costs.

Two thirds (65%) of 240 NHS trusts reported a deficit, most of them acute hospitals. £751m was paid out in service fines and readmission penalties to commissioners. A total of £3.64bn was spent on agency and contract staff, £1.4bn more than planned.

The crisis is particularly severe in London, where 18 of the 37 hospital trusts are due to record a collective deficit of £582.3m. Barts Health, the largest trust in England, which runs four east London hospitals, employs over 15,000 people and serves a population of 2.5 million people, also had the largest deficit, £134.9m. This is almost a tenth of its £1.5bn annual turnover. In 2014/15 it overspent by £79.6m. It spends huge sums on agency staff – £7m of a monthly wage bill of £68m – as it cannot recruit permanent staff. 40% of the cost of agency staff is the premiums agencies charge the trust – £30m a year. Its finances are also undermined by a huge PFI debt associated with rebuilding the Royal London Hospital. On top of this are fines Barts has had to pay for failing to treat A&E patients within four hours and those waiting for planned care within 18 weeks, a total of £56m during the year. Barts is not alone: London North West Healthcare NHS Trust, also operating four hospitals, ended 2015/16 £88.3m in deficit, the second biggest in NHS history and £63.4m worse than 2014/15. It recently disclosed that it was having trouble paying suppliers.

The effect on services has been enormous:

  • 75,000 patients had their operations postponed during 2015/16, the highest number since 2001/02,
  • 8.5% of all patients have been on waiting lists beyond the mandatory 18 weeks – again, the highest number since 2001/02.
  • The number of patients in March who had been on a waiting list for more than 18 weeks was 298,747, up from 206,032 in March 2015.
  • March 2016 also saw the worst performance for A&E on record, with just 80.9% being seen within the target four hours, down from 88.9% for March 2015, and 95.3% for March 2011. Only four hospitals met the 95% target.

Cuts in social services have left hundreds of thousands of people without the support they need to live at home. Access to GP services has been pared back with appointments needing to be made days in advance, so many end up going to A&E. The results are inevitable: patients waiting on trolleys in A&E, with ambulances queuing outside because there is no room for those they are bringing in.

It is the tenacity of the junior doctors that has forced the government back into negotiations. The millionaire press is now whipping up opposition to them with lurid headlines about the aims of the strikers based on selective interpretation of leaked WhatsApp messages between BMA officials leading the strike. What they show is a resolve by some of those involved to formulate the best strategy to defeat the government – a determination that has been completely absent from the mass of the trade union movement. The talks that are taking place will lead to a revised contract being put forward for agreement in June. The press are now trying to soften up the junior doctors to accept any new offer: the example they have set to date is too dangerous to be allowed to continue. The momentum the doctors have established must be maintained: they have shown that industrial action is possible to defend the NHS. We have to build on their example.

Hannah Caller and Robert Clough

Fight Racism! Fight Imperialism! 251 June/July 2016


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