More effective collaboration between local health services is needed to achieve better value for money.
The Committee of Public Accounts (PAC) has expressed concern at the “fragility of NHS finances”.
Different payment mechanisms and financial incentives for local health bodies are not encouraging integration required for the new models of care proposed by NHS England (NHSE) chief executive, Simon Stevens.
NHSE, Monitor and the NHS Trust Development Authority (TDA) have been advised to submit strategic and operational plans outlining how they will implement new care models by the PAC.
The financial health of NHS bodies has worsened since 2012/13 with the number of NHS and foundation trusts in deficit rising to more than 25%.
Due to financial agreements for community care services there is no incentive for such providers to take on extra work and acute services will not turn away patients, said the report on the financial stability of NHS bodies.
It is claimed national bodies such as NHSE and Monitor “have not done enough” to improve local decision making, which has resulted in a gap between planned expenditure of clinical commissioning groups and income expected by NHS trusts.
Chair of PAC, the Rt Hon Margaret Hodge, said: “NHSE, Monitor and the NHS TDA recognise radical change is needed to the way services are provided and extra resources are required if the NHS is to become financially sustainable. This includes making better use of community and primary care services to reduce pressure on hospitals.
“Significant” investment would be required to provide such radical change and the money available to use is decreasing as the number of NHS organisations in deficit rise, Hodge said.
Labour Health Secretary, Andy Burnham, said: “The NHS is now struggling with a growing financial crisis. Many trusts are in trouble on all fronts and trapped in a downward spiral, without enough staff and lacking the funds they need to stop the slide. This is a mess of the government’s making and spells disaster for the NHS unless there is an urgent change of course.
“The government should agree to Labour’s plans to recruit more doctors and nurses so that the NHS gets the millstone of the agency bill off its back.”