NHS finances back to black

Thursday, 30 August 2007 12:00 AM

The NHS is expected to finish this financial year in the black, after the Department of Health (DoH) published its finances for the first quarter.

The figures show the health service is making progress on both financial management and performance after incurring a heavy deficit two years ago.

However, the Liberal Democrats warned the surplus had only been achieved by drastic cuts to services.

The NHS is forecast to finish the 2007-08 financial year with a surplus of £983 million, compared to £510 million last year and a deficit of £547 million in 2005-06.

Health secretary Alan Johnson said: "Today's financial forecasts show the NHS is now on a sustainable financial footing.

"The NHS is becoming more efficient freeing up resources to be spent on the major concerns of patients like tackling hospital bugs and improving access to local doctors.

"These figures show that any changes to NHS services are driven by the need to save lives, not money."

This surplus represents just 1.3 per cent of the NHS budget and Mr Johnson confirmed it would be reinvested in patient care.

Based on figures for the first quarter, only 22 trusts, or six per cent of the total, are expected to end the year with a deficit, continuing past trends of a minority of trusts incurring the bulk of the NHS' debt.

Commenting on the report David Nicholson, chief executive of the NHS, said: "Local NHS staff have successfully turned the position around from one of overall deficit to a forecast surplus, created through increased efficiency and productivity and through greater financial discipline and rigour in the system.

"As I set out in my annual report, an organisation the size of the NHS should always plan for a surplus.

"A surplus allows flexibility and headroom for organisations to plan for the long term, invest in new services before closing existing ones, and respond to unexpected in-year pressures such as new drugs."

The DoH maintained the surplus has been achieved while making progress with targets on waiting times, infections and health inequalities.

The Liberal Democrats argued, however, that the health service had been forced to cut key services.

Lib Dem health spokesman Norman Lamb said: "Gordon Brown constantly trumpets the end of the boom and bust of the Tory years but that is precisely what we have seen in the NHS.

"Last year saw dreadful cuts in key services used by very vulnerable people to achieve this year's surplus. Patients and those working in the NHS will be left asking what the hidden cost of achieving this surplus was."

Mr Lamb also pointed to research showing the UK underperforms on cancer and stroke care compared with the rest of Europe.

The Royal College of Nurses (RCN) also warned against cutting services to achieve financial stability.

Peter Carter, general secretary to the RCN, said: "In our view freezing and deleting health workers' posts, cutting services to patients and raiding training budgets is not the right way to balance the books.

"We now have a curious situation where the NHS is forecasting a surplus of nearly a billion pounds but is unable to find jobs for thousands of newly-qualified nurses desperate to put their new found skills and commitment to work."

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