Almost every day there’s a new report on the state of NHS finances. With so many negative headlines, it can be difficult to keep sight of what the extent of the problem is and what solutions might fix it.
Many NHS organisations are under severe financial pressure. The planned savings are still ambitious and, after speaking to finance directors, our research has found they lack confidence about whether they can deliver the annual 2–3% savings needed to close the £22bn funding gap.
Most finance directors see sustainability and transformation plans (STPs) as a cornerstone of reducing the deficit – but an overwhelming majority also voiced concerns about the way they are set up, with nearly three-quarters (72%) concerned about their governance. STPs were met with enthusiasm and positivity when they were first introduced, but there is increasing scepticism about whether they can actually work in practice.
Only 54% of finance directors believe that the risks associated with STPs have been recognised and just 5% believe adequate risk management arrangements are in place. Warnings of “heroic saving assumptions” and “a need for more financial realism” echo loudly.