Short-term fixes have made some parts of the NHS seriously financially unstable, the National Audit Office (NAO) has warned.
It said the health service is treating more patients, but has not yet achieved the fundamental transformation in services and finance regime needed to meet rising demand.
For the financial year ending 31 March 2019, NHS provider trusts reported a combined deficit of £827m and clinical commissioning groups (CCGs) failed to balance their books again, reporting a £150m deficit.
The NAO argued that trusts are becoming increasingly reliant on short-term measures, including one-off savings, to meet yearly financial targets.
“The Department of Health and Social Care continues toGareth Davies, head of the National Audit Office
provide some trusts with short-term loans
just to meet their day-to-day costs with
little hope they will be repaid.
This is not a sustainable way to run public bodies.”
These deficits were offset by a centrally managed NHS England underspend.
The NAO said the extra money brought in by government to stabilise the finances of individual NHS bodies has not been fully effective.
Although the NHS treated more people in 2018-19, it has struggled to transform services. Patient waiting times continue to get worse and the number of people waiting for treatment continues to increase.
In the past five years, the government has transferred £4.3bn from capital to revenue budgets to cope with day-to-day pressures facing the NHS.
The NAO warned that rising demand for capital spending and the growing maintenance backlog means there is an increasing risk of harm to patients.
Over the last three years, NHS providers have requested on average £1.1bn more for buildings and equipment than their spending limits allow.
Some 14% of NHS buildings are older than when the NHS was formed in 1948, and the backlog of maintenance work to get all buildings up to standard currently stands at about £6.5bn.
Gareth Davies, head of the NAO, said: “The short-term fixes that were introduced to manage the NHS’ finances are not sustainable. The Department of Health and Social Care continues to provide some trusts with short-term loans just to meet their day-to-day costs with little hope they will be repaid. This is not a sustainable way to run public bodies.”
He argued that to bring about lasting stability, the Department and NHS England and NHS Improvement need to move away from short-term financial fixes and provide longer-term solutions.