More indebted trusts overshadow NHS surplus

Tuesday, 20 February 2007 12:00 AM

The NHS is expected to end the financial year with a small surplus, despite a rise in the number of NHS organisations in deficit.

Due to the creation of a central reserve, as well as strict budgeting measures imposed on over-spending trusts, the NHS as a whole is forecasting a net surplus of £13 million.

However, without the reserve the total deficit would total £437 million. Moreover, the third quarter results, published today by the Department of Health (DoH), show that 35 per cent of primary care trusts and hospitals are forecasting a deficit, up from 32 per cent at the end of the last quarter.

The report concludes that the NHS remains on track to meet the financial targets agreed at the start of the year.

"At a national level, the creation of the contingency by the SHAs [strategic health authorities] has helped absorb the financial problems carried into the year and the system as a whole is operating in in-year balance," notes Richard Douglas, the NHS' director general of finance and investment.

"Where problems remain, these are being addressed by the SHAs and local management teams supported, where necessary, by turnaround experts. Although there remains no room for complacency, if the NHS continues with this improvement the system will be well-placed going into 2007-08."

However, the Liberal Democrats accused the government of 'Del boy accounting'.

Lib Dem health spokesman Norman Lamb said that the figures gave little cause for celebration, dismissing the projected surplus as a "drop in the ocean" compared to the NHS' total spending, adding that it masked the increasing number of trusts in heavy debt.

He concluded: "The government is employing all sorts of tricks by shifting debts from one organisation to another. These accounting rules would make Dellboy proud but won't make the problem disappear."

The Conservatives echoed these criticisms with shadow health secretary Andrew Lansley claiming that the NHS is in worse financial shape than ever before.

He dismissed Labour's claims of a surplus as a "sham", with more organisations reporting larger debts than this time last year.

Blaming the "inefficient" use of the private sector, an excess of uncosted initiatives and bad management from the DoH, Mr Lansley concluded: "Patricia Hewitt's skin is being saved only by savage cuts to centrally-held budgets, which will all need to be restored in the years to come."

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