A survey of NHS trust leaders has highlighted a ratcheting up of pressure on trusts to make greater savings in the coming financial year.

The findings show they have been asked by NHS Improvement to deliver more demanding savings under the cost improvement programme (CIP) which reflects their costs as a percentage of annual revenue. Trusts which fail to agree or fall short of these “control totals” will be unable to access additional funds to support transformation.

This survey was circulated to the finance and commercial directors across NHS trusts and foundation trusts in England in February 2017. It received responses from 99 providers, equal to 42% of the provider sector. It asked questions concerning how financial plans are progressing for the next financial year, what the financial outlook is, and how providers have responded to the issues related to control totals.

The results were clear:

• This year the average cost improvement required of trusts was 4%
• For those trusts that have agreed control totals for next year (70%) the average CIP requirement was 4.2%
• For those trusts that have not agreed control totals for next year (30%) the average CIP requirement asked of them was 6.4%
• 5% of trusts in the survey were asked to make savings in excess of 9%

The savings required were typically higher for hospital trusts than for ambulance, mental health and community trusts.

Trusts that did not agree to savings targets described them variously as being impossible, unrealistic, undeliverable, unachievable and unaffordable.

The report also highlights trusts’ reliance in 2016/17 on one-off savings such as land sales and capital to revenue transfers to prop up a shortfall in recurrent savings. Two thirds of those who responded said they had been very or fairly reliant on those types of actions to achieve their financial plan for the year. This means their underlying position is worse than it initially appears. Although fewer trusts expect to be reliant on this approach next year, that could indicate that for some, this approach has been exhausted.

Responding to the survey, NHS Providers’ finances policy advisor, Edward Cornick, said:

“We can see that the scale of the task facing providers next year equals not a gradual change, but a dramatic one. 

We are entering a year when providers are being asked to make savings that are simply of a different magnitude than at any other time in the NHS's 70 year history.

“The fact that NHS Improvement concluded that 30% of providers need to make a 6.4% cost improvement clearly demonstrates that the service is in for a very bumpy year indeed financially. Under such circumstances it is hardly surprising, from a governance perspective, that these providers felt unable to agree to control totals.

“Some will say tough savings are now up to the NHS to deliver. But they must understand exactly what that means. We are entering a year when providers are being asked to make savings that are simply of a different magnitude than at any other time in the NHS's 70 year history."