Jeremy Hunt in 'something for something' deal with NHS trusts wanting extra cash

Struggling NHS trusts face tighter controls and closer scrutiny if they are to gain access to a Government pot of cash, Health Secretary Jeremy Hunt has said.

The Government has already announced a £1.8 billion transformation fund to help trusts out of their financial black hole.

But in a new "something for something" deal, trusts will have to demonstrate they can retain financial control for the rest of the year and are making good progress towards finding savings.

In November, trusts across England announced a £1.6 billion deficit in the first six months of the financial year - the worst on record.

Based on current performance, trusts are predicting they will end the financial year £2.2 billion in debt, with 156 out of 239 of them recording deficits.

They have also been tasked with finding billions in "efficiency savings" as part of a wider review.

Under the new deal, Mr Hunt says hospitals must meet existing financial targets for the remainder of this financial year and must balance their books in 2016/17 in order to access cash from the transformation fund.

Furthermore, the cap on spending on expensive agency staff will be lowered even further, with a ban on agencies that refuse to supply workers at the shift rate cap. At the moment this only applies to nurses.

Hospitals will also be told there is "no choice" between delivering high quality care and having a good grip of finances.

Poorly performing hospitals will face closer scrutiny and intervention from regulators.

Mr Hunt said: "We believe in the values of the NHS and are committed to its future - which is why we are investing £10 billion to fund the NHS's own plan.

"But patients and taxpayers rightly expect a return on this investment, so hospitals must improve their financial performance and balance their books in order to unlock this funding.

"Our best hospitals are simultaneously showing tight financial grip, reducing waste and living within their means. We need trusts to raise their sights - failure to do this is not an option."

On agency staffing, Mr Hunt said the new controls would "help hospitals clamp down further on rip off staffing agencies and make our hospitals safer".

He said "reliance on constantly changing agency staff who are unfamiliar with wards and their patients is unsafe".

As part of the plan, trusts must deliver efficiency savings as set out by Lord Patrick Carter, who has been advising Mr Hunt on how hospital budgets can be better spent.

In June he said up to £5 billion a year could be saved every year by 2020.

From April, NHS trusts will be forced to publish their receipts on a monthly basis for the top 100 items they buy such as bandages, needles and rubber gloves.

This will allow hospitals to compare costs and volumes with other trusts and drive down variation.

The Government says this could save hospitals £1 billion a year by 2020/21.