Quarterly performance of the NHS provider sector: quarter 2 2016/17

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NHS providers have continued their financial recovery with a significantly reduced number of providers reporting a deficit for the second consecutive quarter.

Quarter 2 2016/17 performance report PDF, 2.2 MB

Read the full performance report.

Financial performance

The number of trusts reporting a year-to-date deficit at the end of the second quarter of 2016/17 was 142. This is 11 fewer than in the first quarter of the year and 40 fewer than this time last year. Providers made £1.2 billion of savings through cost improvement programmes, reducing total year-to-date expenditure by 2.9%.

Measures to curb excessive agency spend are also having a real impact. Two thirds of NHS providers are saying that our agency controls - that are well used by many trusts - have enabled them to save money. NHS providers estimate that they are on course to reduce their agency costs by around £900 million this year.

However, there is still a lot of work to do in this area, with some trusts and some specialities, such as radiography, failing to pull their weight. We'll will soon be launching further initiatives to support trusts and specialities achieve a consistent rate of saving and eliminate unnecessary spending on temporary staff – which is bad for patients, unfair for existing NHS staff, and unaffordable.

Financial performance information from providers shows them on track to record a year-to-date deficit of £648 million in the first half of the year – just £22 million worse than planned – on an operating revenue of around £39 billion.

We estimate the deficit can be brought down to £580 million, if providers met their savings targets in full over the remaining half of the year.

Operational performance

This second successive quarter of positive financial performance comes despite continued unprecedented growth in demand for NHS services. Major accident and emergency departments alone saw a 4.1% rise in admissions, while bed availability continued to be an issue, with a 34.8% increase in bed days lost because of delayed transfers of care, compared with this time last year.

This increase in demand – at the same time as difficulty transferring patients into more appropriate forms of care – is severely hampering performance within the NHS. Despite this, 89.74% of the 5.44 million patients that attended an A&E department in Q2 were treated, admitted or discharged within four hours – an improvement on the performance in the first quarter of 2016/17.

Ambulance services have been suffering from similar increases in demand. There has been a 9.9% rise in the number of Red 1 (time-critical) calls received in the second quarter of 2016/17, and a 14.1% rise in the number of calls rated Red 2 (life threatening). This has been a significant factor in the ambulance services failing to meet any of the key response times during this quarter.

Sustained demand for emergency inpatient care has, when coupled with junior doctors strikes, led to the waiting list reaching its highest recorded level of 3.51 million. We're working with trusts to help shorten the amount of time patients are waiting for elective care is already having a very positive impact.

No-one should underestimate the challenge of turning around a very difficult financial position for the NHS. But, thanks to a phenomenal effort by staff across the NHS, we're one nil up at half time.

We can't allow ourselves to be complacent. We know that we’ve got a lot of hard work still to do, and we'll need each and every person within the NHS to play their part. We owe it to the people who use and fund our services to provide the best quality care possible within budget.

Jim Mackey, Chief Executive of NHS Improvement

Our findings at a glance

This infographic summaries some of our report's key findings:

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