How many NHS trusts are in the red?

Published: 25th Oct 2013

This article now includes details of the specific phrasing of the Parliamentary Question.

At a time when the health service is being asked to make £30 billion of efficiency savings, the government is keeping a close eye on the financial health of NHS trusts. This week in the House of Commons Labour asked the Coalition how many NHS trusts are forecasting a deficit for 2013/14.

Conservative MP Dan Poulter replied that over 80% of all NHS trusts (70% of trusts and 89% of Foundation Trusts) are predicted to either break even or end the year in surplus. However, Labour's Liz Kendall had a different set of numbers: "Earlier this month," she said, "we learned that half of all NHS hospital trusts are now predicting deficits - up from one in 12 last year."

Although Dan Poulter accused his counterpart of "being economical with the figures", the same set of statistics actually supports both claims. While Labour have looked exclusively at NHS hospital trusts, the Conservative minister is referring to all NHS trusts (hospital or 'acute' trusts, ambulance trusts and mental health trusts). 

According to the latest report from Monitor, which regulates Foundation Trusts, 131 FTs (89%) are forecasting a surplus in their budget or to break even in 2013/14. Meanwhile, the most recent figures released by the NHS Trust Development Authority (which oversees NHS trusts) show that of 101 NHS trusts, 75 are planning for the same. (At 74%, this is slightly higher than Dan Poulter's figure of 70%. The discrepancy might be explained by the fact that the number of NHS trusts is continually decreasing, as more trusts 'graduate' to Foundation Trust status.)

The government wants all NHS trusts to become Foundation Trusts by March 2014. FTs are more autonomous and financially independent of government. Unlike a standard NHS trust, a Foundation Trust is not required to break even every year - it's allowed to run a short-term deficit. 

Hospitals are more likely to be in poor financial health

While there's not much difference between the financial position of trusts and FTs, there's considerable variation between types of trust. Liz Kendall is correct when she says that half of NHS hospital trusts are facing a shortfall in ther budget: 48% of 'acute' trusts (hospitals that provide A&E services and specialised treatment) are predicting a deficit in 2013/14. This contrasts sharply with the situation at other trusts - not a single ambulance trust or community and mental health trust has forecast a deficit for this year.

Of a total of 62 acute trusts, only five were in this position in 2012/13, which - as Ms Kendall observes - equates to one in 12 trusts. According to the NHS Trust Development Authority, the strain on budgets is mainly a result of "operational pressures in urgent and emergency care". This analysis echoes widespread concerns of a "crisis" in A&E, with many arguing that hospitals are once again at risk of missing their targets over the busy winter period.

Labour's original question referred only to NHS trusts (not Foundation Trusts) and Liz Kendall's figures do not take into account the situation at FTs. Monitor notes that while large acute trusts account for 71% of FT income and are likely to be in surplus, small and medium-sized acute trusts tend to face the greatest financial challenge of all.

On this occasion, both Liz Kendall and Dan Poulter are quoting accurate statistics. While the figure for all NHS trusts obscures the fact that hospital trusts in particular are struggling, focusing only on one type of trust suggests the situation is worse than it actually is across the board.


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