The Department of Health will not have to request extra cash from parliament to cover overspending in 2015-16, but is expected to face concerns over its annual accounts from the National Audit Office, HSJ understands.

Ahead of publication of the DH annual report and accounts on Thursday, several well-placed sources have told HSJ that the NAO - parliament’s official audit watchdog - will publish a report alongside the accounts.

One source said the NAO report contains “critical language” in relation to the accounts, while another said it will explain why the department will not have to request more money through an “excess vote” in parliament.

Sources said the DH was expected to have overspent its revenue departmental expenditure limit for the year, but that other factors meant it did not need to request a further vote on spending from parliament for 2015-16. 

A department having to return to parliament to vote further resources is considered a highly serious step.

There has been speculation for months over whether the DH would breach its spending limit, largely due to an NHS provider sector deficit which swelled to £2.45bn in the year to April 2016. 

In 2014-15, when the provider sector reported a deficit of around £844m, the department posted an underspend of just £1.2m. This represented 0.001 per cent of the total revenue budget.

Departmental overspending is taken extremely seriously by the treasury and parliament, and publication of tomorrow’s accounts will coincide with a high-profile “financial reset” by NHS England and NHS Improvement.

This is expected to outline consequences for organisations that do not improve their finances.

The DH was already given a £205m bailout from the Treasury in 2015-16, while £950m of capital funds were also used to prop up the revenue budgets.

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