NHS finances in 'perilous state', says damning Public Accounts Committee report

'Rescue packages are no substitute for a coherent, properly funded strategy,' says chair

NHS finances are in a “perilous state” and desperately need a long-term solution, a damning report by in influential group of MPs has found.

The Public Accounts Committee (PAC) accused the Department for Health and Social Care (DHSC) and NHS England of being “too focused on propping up the system” and neglecting to plan ahead.

“The National Health Service continues to scrape by on emergency handouts and funds that were intended for essential investment,” PAC chair Meg Hillier said.

“We have said it before and we will say it again: rescue packages and budget transfers are no substitute for a coherent, properly funded strategy that enables NHS trusts to plan, focus on patient care and lay the groundwork for long-term financial sustainability.”

The committee cited last winter’s NHS crisis as evidence of the Government’s short-term approach, since despite early warnings of a looming healthcare emergency, Chancellor Philip Hammond waited until November to announce additional funding.

“The Government’s last-minute response to what were entirely predictable winter pressures is just the latest vivid demonstration of why fresh thinking is so desperately needed,” Ms Hillier said.

The committee called for the DHSC to produce detailed plans on the future of the NHS by July, saying it was “disappointed” its previous warnings to the Government about its short-term approach had gone ignored.

Securing a funding settlement from the Treasury that properly reflected current and anticipated demand for the NHS was a key part of such a plan, it said.

NHS trusts forecast a deficit of over £900m in 2017/18, meaning the NHS “has a long way to go before it is financially sustainable”, the committee found.

The PAC's warning came amid growing calls from MPs to increase funding for healthcare, with some suggesting a ring-fenced “NHS tax”.

Appearing on ITV's Peston on Sunday, Health Secretary Jeremy Hunt admitted tax rises may be needed to boost NHS funding, criticising the “crazy” funding plan of the NHS that lurched from “feast to famine”.

Mr Hunt also said speculation in The Sunday Times about a £4bn-a-year funding injection to coincide with the NHS’s 70th birthday was premature.

The head of NHS England, Simon Stevens, refused to say whether the health service had been promised the extra money at a PAC meeting on Monday, but said: “The sort of figures you are talking about is consistent with funding growth.”

He said he would welcome a five- or 10-year funding plan to improve the efficiency of the service, adding it was “a case for debate” whether recently announced pay rises for NHS staff would continue beyond 2022.

In its report, the committee said it welcomed the decision to lift the 1 per cent pay cap for staff, but it “will be watching” to see if it led to more staff saying in the service. “We need to be clear this is not robbing Peter to pay Paul,” the committee added.