15/12/2015 19:00 GMT

NHS £2.2billion Funding Black Hole 'Can Be Seen From Space', Claims Labour

Gareth Fuller/PA Wire
Shadow health secretary Heidi Alexander

The NHS funding crisis is so big you “can probably see it from space”, Labour has warned.

A report from the National Audit Office (NAO) published today shows health trusts are facing a funding gap of £2.2billion by the end of March.

The report claims the financial position of the NHS trusts is “severe and worse than expected”, with three out of four reporting deficits in the first six months of 2015-16.

The funding gap is forecast to be as high as £22billion by 2020-21.

The dire state of the NHS finances comes as The Huffington Post UK revealed some hospitals are so cash-strapped they are having to take out emergency loans to pay doctors, nurses and other staff salaries every month.

Labour’s Shadow Health Secretary Heidi Alexander said the extra money earmarked for the NHS by Chancellor George Osborne last month will simply be “sucked into the black hole”.

She said: “This report shows just how bad the NHS’s financial performance has become. Hospital deficits are spiralling out of control and the financial crisis facing the NHS is so big astronaut Tim Peake can probably see it from space.

Ms Alexander added: “The uncomfortable truth for Ministers is that this is a crisis of their own making.

"The NHS is under pressure as a direct result of decisions they have made. Cuts to nurse training places have forced hospitals to drain resources hiring expensive agency staff, while cuts to social care services has led to rising demand on hospitals.”

The NAO report reveals the finances of the NHS has been in freefall since 2012/13, with a £592million surplus for trusts becoming a £843million deficit.

The number of trusts reporting a deficit rose by 57 per cent in just six months from March to September 2015.

Barts Health Trust in East London is forecast to run the highest deficit this year - £134.9million.

The largest deficit by share of income is set to be at Peterborough and Stamford Hospitals NHS Foundation Trust, which is predicted to be in the red to the tune of £38.8million - 15.5 per cent of its total funding.

The report says one of the reasons for the increase in spending is the growing use of “non permanent” staff, such as agency workers – up by 24 per cent in just two years.

The report reads: “A rise in spending on agency staff has been exacerbated by the difficulties of recruiting staff into permanent posts and by new requirements for safe staffing levels.”

National Audit Office head Amyas Morse said: “We said in November 2014 that the trend of NHS trusts’ and NHS foundation trusts’ declining financial performance was not sustainable. We repeat this view today.

“Running a deficit seems to be becoming normal practice for acute trusts. There is a risk that poor financial performance is seen as the least worst option compared with poor healthcare provision.

“The Department, NHS England, Monitor and the NHS TDA must take a rounded view of how to improve trusts’ finances.

“The government’s commitment to give the NHS more funding, with almost half of this coming upfront, could be a significant step towards financial sustainability, if this funding can be devoted to improving the financial position of trusts rather than dealing with new costs."

TUC General Secretary Frances O’Grady labelled the “crisis” as one “of the government’s own making.”

She said: “With further cuts to social care, training budgets and public health, we can expect to see our NHS stretched to limit, while dedicated health workers struggle with mounting debts and stagnating pay.”