NHS Providers look at the performance of the provider sector

policy digest

25 / 07 / 2017

The state of the NHS provider sector
NHS Providers, July 2017

This is the second report from NHS Providers looking at the performance of the NHS provider sector over the past six months. It includes findings from a survey of provider chairs and chief executives, with 158 senior leaders from 125 trusts responding. This report focuses particularly on providers of mental health services, stating that “core mental health services on the ground are under increasing pressure and at risk of deteriorating”. 

When looking at the overall state of the NHS provider sector, the report pulls out four key issues:

Access and quality

  • Trusts are experiencing record demand, even higher than predicted in the Five Year Forward View.

  • All four key targets (ambulance, A&E, elective surgery and cancer) were missed by the NHS for the first time last year.


  • Progress was made in reducing the provider deficit in 2016/17, with £3.1bn of cost improvement gains made, including reducing spend on agency staff by £770 million.
  • The report highlights serious concerns that in 2016/17 around £1bn worth of savings were made through non-recurrent means that cannot be repeated in 2017/18 or beyond.


  • Workforce is now the biggest concern for trusts, with 57 per cent “worried” or “very worried” about their ability to maintain the right numbers of staff. There is extra concern around the recruitment of nurses, some medical specialists and paramedics.

  • Brexit, tougher language tests for foreign staff and increased costs around recruiting from abroad also make the workforce problems potentially more serious.


  • The report found that 62 per cent of chairs and chief executives are worried that required transformation is not happening quickly enough.

Looking specifically at providers of mental health services, the report found:

  • Rapidly rising demand

  • They highlight the growth in children attending A&E for psychiatric reasons and a 44 percent rise in referrals to CAMHS in three years

  • They also state that inpatient units often see over 100 percent occupancy rates. Worryingly, 90 percent of respondents expect to see a rise in demand for mental health crisis care in 2017/18

Extra funding not reaching trust’s frontlines

  • The report suggests that block contracts do not allow for rising demand for services and trusts are also having to make significant cost improvement programmes (often of around four to six per cent per annum).  

  • They also point towards a lack of transparency on how funding is allocated from CCGs to mental health trusts. Eight out of 10 mental health trusts who responded were “worried” or “very worried” that the national commitment to increase investment in mental health would not be sufficient to meet the rising demand.

The lack of transparency means we cannot be sure why the money is not reaching the frontline and the report suggests this could be due to a number of reasons; funding not reaching the CCG; funding reaching the CCG but not being spent on mental health; funding being spent on mental health but not in the NHS mental health provider sector; funding being spent on the NHS mental health provider sector but on new as opposed to core services; and funding being spent on core services, but spend not keeping up with demand increases.

Major workforce shortages

  • Less than one third of senior leaders were “confident” or “very confident” that the current workforce strategies will deliver the staff they need in the future. 

  • They state that it is too early to know the effect of the removal of nurses’ bursaries, however the mental health workforce tend to be older on average, and it is older students who are more likely to be put off by the new loan system.

  • Health Education England has stated that an additional 19,000 staff are needed by 2020/21 to deliver the Five Year Forward View for Mental Health.

Mental health not prominent enough in STPs 

  • Only 11 percent of chairs and chief executives felt that STPs will improve access and quality of mental health services

  • The report also points to fractured commissioning in mental health that can lead to uncoordinated care, with mental health services being commissioned by NHS England, CCGs and local authorities.

NHS Providers highlight what they feel mental health providers need in order to meet the rising demand on their services:

  • realism about rising demand and what’s needed to meet it, recognising that increased focus on mental health and current societal pressures will generate more demand

  • better ways to guarantee that mental health funding reaches frontline services provided by trusts

  • a robust workforce strategy combined with support at local level to ensure the strategy actually gets delivered

  • STPs to give enhanced mental health service delivery greater priority in their plans

  • commissioning to be overhauled to deliver more coherent pathways of care and to maintain the level of financial investment in mental health services.

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