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More than 1 in 5 (22 per cent) of hospitals are set to be in deficit by the end of this financial year, according to a survey of NHS trust finance directors conducted for The King’s Fund’s latest quarterly monitoring report.

The finding – an increase on previous surveys – highlights the growing pressures on hospitals as the NHS continues to manage the biggest financial squeeze in its history. The survey suggests the NHS will struggle to meet its target of delivering £20 billion in efficiency savings by 2015, with less than half (47 per cent) of finance directors expecting to meet their productivity targets for the current financial year. Worryingly, the survey also found that staff morale now tops the list of concerns identified by hospital finance directors.

NHS commissioners are more optimistic, with 61 per cent of finance leads from clinical commissioning groups (CCGs) confident of meeting their productivity targets. Nevertheless, 1 in 8 (13 per cent) expect their CCG to be in deficit at the end of the year. Severe cuts to local authority budgets mean the financial squeeze is biting even harder in social care, with more than a third (36 per cent) of directors of adult social services forecasting deficits.

While the survey findings suggest that financial pressures are increasing, analysis of key performance data shows that NHS performance is holding up well. Over the quarter ending in December 2013, the proportion of patients waiting more than four hours in A&E was within the government’s target range of 5 per cent. Although this masks considerable variation in performance – 1 in 4 hospitals (26 per cent) breached the target over the period – it suggests that most hospitals have managed to cope with winter pressures so far.

Waiting times for hospital treatment are also within target range, although the proportion of outpatients waiting more than 18 weeks for treatment has reached its highest level since 2008 – another indication that pressures on hospitals are increasing. The main findings from the analysis of performance data include:

Professor John Appleby, Chief Economist at The King’s Fund, said: 'Despite warnings about a potential crisis in A&E, most hospitals are coping with winter pressures so far – a tribute to the hard work of staff in A&E departments. However, the growing number of hospitals set to overspend their budgets shows that for some, it is no longer possible both to maintain the quality of services and balance their books. The emerging concerns about staff morale in hospitals are very worrying as there is a proven relationship between staff satisfaction and the quality of care provided to patients.'

See the full findings: How is the health and social care system performing? January 2014

Notes to editors: 

How is the health and social care system performing? is the latest of The King’s Fund’s regular quarterly monitoring reports. For further information or to request an interview with John Appleby, please contact the Press and Public Affairs team on 020 7307 2585 (07584 146035 if calling out of hours).

The survey was carried out online between 22 November 2013 and 6 December 2013. Of 235 NHS trust finance directors contacted, 79 responded. We contacted 195 CCG finance leads, of whom 58 responded. We also contacted 152 directors of adult social services, of whom 47 responded.

The King's Fund is an independent charity working to improve health and health care in England. We help to shape policy and practice through research and analysis; develop individuals, teams and organisations; promote understanding of the health and social care system; and bring people together to learn, share knowledge and debate. Our vision is that the best possible care is available to all.