EXCLUSIVE: The organisation is sitting in a £79.5m deficit – while its governing body still expects it to break even by the end of the financial year
Greater Manchester’s NHS is ‘about to run out of cash’ – and is delaying payments to manage a cash flow crisis, a board meeting has heard.
The NHS Greater Manchester Integrated Care System is responsible for paying for, planning and delivering Greater Manchester’s health and care needs, including most NHS services in the area. But the region is under high levels of scrutiny after two years of serious struggles with its finances, mental health services, and urgent and emergency care.
The organisation is sitting in a £79.5m deficit – while its governing body still expects it to break even by the end of the financial year in three months’ time – a board meeting of NHS Greater Manchester was told.
Referred to as ‘NHS Greater Manchester’, the system is facing both capital and revenue ‘challenges’ because of the £79.5m budget pressure. It is now having to delay payments to other organisations because of a lack of cash in that capital fund.
A board meeting held in public on Wednesday (February 19) heard from the interim chief finance officer, Kathy Roe: “[We’re] running out of cash because of the £80m spending issue.
“We’re looking at how to get cash coming in and how to manage cash going out definitely. There are delays to some of the payments.”
The finance chief said that it’s the first time she has worked for a commissioning body, which has the job of assessing needs, planning and prioritising, purchasing and monitoring health services, which is ‘about to run out of cash’.
“It’s a real sign of just how difficult it is in the NHS. Cash is king. In my 40-year career, this is the first time I’ve been in a commissioner that’s about to run out of cash.”
Now, there is ‘significant risk’ NHS Greater Manchester will not ‘deliver the balanced position’ as it has been instructed to by its governing body, NHS England, board papers read.
Ms Roe said: “NHS England is holding us to account with the breakeven position even though the year to date position indicates that would be enormously challenging.
“We’re looking at any opportunity to improve on this position. It looks like we’re going to run out of road.”
Last year, Greater Manchester’s NHS was thrust into enforcement undertakings as a result amid a £200m deficit. The move comes when NHS England ‘has reasonable grounds to suspect a potential failure’, or that the region’s NHS ‘could be at risk of failing to discharge its function’ – after a long period of failing to make fundamental improvements.
NHS England implemented tight spending controls as a result. And in December, the Manchester Evening News reported how some health and care services could be cut as the region’s NHS attempted to bring its spiralling finances into line.
But the Greater Manchester system continues to face financial turmoil. In recent years, and again this week, the region’s NHS said the reasons for its huge deficit include ‘the ongoing impact of industrial action’, the rising costs of prescription drugs, and costly ‘out-of-area’ beds for mental health patients. There is a shortage of mental health beds for people in Greater Manchester, meaning that patients can be sent hundreds of miles away to be admitted to a facility – which as well as being expensive to achieve, can compromise on the ‘quality’ of people’s care, heard the board.
NHS Greater Manchester also says in board papers that its finances have suffered because of delays in receiving money it should get, including resources to deal with the elective surgery backlog and to fund health care workers in the community. “There is a risk that NHS GM will not have the ability to draw down enough cash to manage all required payments before the end of the financial year,” read board papers. “This has been raised with regional and national teams, and mitigations are being put in place to manage cash flow.”
All the while, NHS Greater Manchester is still trying to pay the regular bills for medical care and drugs being delivered across the 10 boroughs.
NHS Greater Manchester, however, is not the only body of its kind to be struggling financially. Chair of the NHS Greater Manchester Integrated Care Board, Sir Richard Leese, pointed out that almost half of such organisations in the country are ‘in intervention on finance’. Although, ‘it doesn’t make it any better’, he added.
NHS Greater Manchester bosses say they are ‘still looking to mitigate [the deficit] by the end of the financial year’, and are ‘trying to understand NHS England requirements’ in the coming weeks. “We’ve been discussing what happens if we can’t get to breakeven despite all the recovery plans we’ve had in the system,” said Ms Roe.
At the current rate of overspend, NHS Greater Manchester is forecast to be in £110m of deficit by the end of this financial year. But Ms Roe said that efforts to stop the spiral could see the final figure ‘be something closer to the year to date position’ of almost £80m.
“We’re in significantly better shape than at the start of the financial year. But we haven’t had the ability to recoup the money we lost at the beginning of the year,” she added.
