More than 1 in 5 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 which is 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 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 (confident of meeting their productivity targets. Nevertheless, 1 in 8 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 of directors of adult social services forecasting deficits.