20/05/2016 02:45 BST | Updated 20/05/2017 06:12 BST

NHS Poised To Record Worst Financial Performance With £2bn-Plus Deficit

NHS trusts across England are expected to record their worst financial performance in a single year, with a deficit of more than £2 billion.

Figures published on Friday for 2015/16 are expected to show a slight improvement on the worst case scenario deficit, but it will still be the poorest on record.

In February, a report containing the first nine months' worth of figures said the NHS was on track for a £2.8bn deficit across the year. It said if savings could be made in the final three months of the financial year, the figure may fall to around £2.4bn.

Data published just before Christmas showed NHS trusts had racked up a deficit of £1.6bn in just the first six months and 156 out of 239 NHS trusts expected to end the year in deficit.

In the entire previous year, the NHS overspend stood at a comparatively small £820 million.

High spending on expensive agency staff has been blamed for having a serious detrimental effect on the financial position of NHS trusts.

The Government has capped agency spending, with new hourly price caps limiting the amount of money various types of agency staff working in the NHS can earn.

Controls on spending on expensive management consultants also came into force over the summer and were expected to have had an impact by the end of the financial year.

But some trusts have argued they are struggling to fill rota gaps and are finding it difficult to keep within the agency cap.

Over the last five months, NHS trusts have come under increased pressure to change the way they present their deficits in their accounts in a bid to balance the books.

The Department of Health is keen to keep the deficit as low as possible to keep within - or close to - spending limits set by the Treasury.

The Nuffield Trust said trusts had made "accountancy adjustments" to bring the deficits down, including reclassifying capital budgets as revenue, claiming for five quarters (15 months) worth of VAT rebates and reviewing accounting policies.

Its senior policy analyst, Sally Gainsbury, said of the expected data: "These figures are expected to show NHS trust performance improving from the start of the year, when they ran up a deficit of nearly £1 billion in just three months.

"However, this is the result of accountancy adjustments which have not changed the underlying £3.5bn gap between the costs of providing hospital and community health services and the funds those services receive."

She said the targets for efficiency savings demanded by the Government looked further away than ever.

She added: "NHS trusts have made cost efficiencies, but not as fast as their funds have been cut. In order to eliminate the underlying deficit by the end of next financial year, providers will need to make year on year cost cuts of 4%: twice the rate of at which Lord Carter's recent report on hospital efficiency found was possible, and higher than any year in the last decade."

The influential King's Fund think-tank has previously said many trusts would not be able to deliver the cuts needed to get the overall deficit down to £1.8bn by the end of March.

It said any shortfall will come out of the 2016/17 budget, eating into the extra funding provided in the Government's spending review.