Bail outs have papered over health funding crisis: NIAO

That’s the verdict of Mr Kieran Donnelly, the Auditor General, who has warned that things are going to get worse rather than better if action isn’t taken in light of the fact that Londonderry is getting bigger and older by the year.

In the new General Report on the Health and Social Care Sector 2012/13 and 2013/14, Mr Donnelly says the financial health of the local health service is “weak and declining.”

The report notes that in 2012/13, four health and social care trusts, WHSCT, NHSCT, SHSCT and SEHSCT, failed to achieve break-even.

“Accounting deficits in 2013/14 totalled almost £14m and as in other years, the Trusts, relied on additional funding, including allocations from in-year monitoring rounds and managed slippage/deferral of expenditure, in order to try and make up the deficit position.

“This led to Trusts carrying forward an underlying ‘real’ deficit of £115m into 2014/15,” the new report states.

This is unsustainable and amounts to a health service funding crisis, according to Mr Donnelly.

“While additional funding allocations have helped Trusts to achieve financial balance over recent years, this has masked rather than addressed, underlying funding pressures,” said the chief auditor.

He warned that “going forward it is clear that HSC Trusts can no longer anticipate that they will receive additional in-year funding to cover their deficits.”

His report says financial constraints are set to tighten in future whilst the city gets older and more frail and demand for health services increases.

“Increasingly they have found it harder to balance their budgets in the face of rising inflationary cost pressures, demographic pressures from an increasing and ageing population and the pressures associated with new treatments and patient expectations while at the same time delivering a challenging programme of efficiency,” it states.

“In 2013/14, four of the five non-regional Trusts had financial deficits.

“At the start of the 2014/15 financial year, the Department estimated that £160m would be needed to enable the sector to break even.

“The Department told us that the pressures have been largely addressed through receipt of an additional £80m through the June and Ocotber monitoring rounds; the success of a range of measures to control expenditure; and the application of HSC Trust contingency plans.

“The HSC Board and HSC Trusts are continuing to review costs across all areas of HSC activity in order to achieve breakeven.”

It warns pressures will outpace funding in years to come.

“The growing sense of realism about the funding gap demonstrated in the actioons of the Department is an improvement on previous years when Trusts produced ‘balanced budgets’ that masked underlying financial problems,” it states.