The Treasury appears to have removed £500m of capital spending allowances from the health budget since April.
At the time of the Budget in April the Treasury said the Department of Health would have £5.6bn to spend this year on capital such as new buildings and equipment. But in his pre-Budget report today chancellor Alistair Darling adjusted that down by £200m to £5.4bn.
Next year’s capital budget also looks to have been cut from £4.8bn to £4.7bn. And the budget for 2008-09 has also been adjusted down from £4.6bn to £4.4bn.
The chancellor’s report says that by 2013-14, £500m of savings will be found from reducing public spending on IT, “including by reducing the cost and scope of the NHS IT programme”.
The Treasury has not yet confirmed whether the £500m removed from the DH’s capital spending allowances relate to that IT saving or not. It says details on the NHS’s share of the IT savings will be available from the DH imminently.
Reductions in capital spending allowances come as primary care trusts face having to fund the transfer of millions of pounds of privately financed buildings on to their balance sheets due to changes in accountancy rules. The DH has said additional funds will be made available to fund that, but PCTs and strategic health authorities have expressed concerns the accountancy change may not be fully funded.
The Treasury has confirmed where £500m of NHS capital spending which appeared to disappear between the Budget and today’s report went.
At the time of the Budget in April the Treasury said the NHS would have £5.6bn to spend this year on capital such as new buildings, equipment and IT. But in his pre-Budget report today chancellor Alastair Darling adjusted that down by £200m to £5.4bn.
A Treasury spokesman has now explained that £200m for this current year has been transferred into the NHS’s revenue budget, following a request from the DH.
Next year’s capital budget has also been reduced from £4.8bn to £4.7bn and the spokesman said that £100m had been “reprioritised” from the NHS to the “warm front” programme to tackle fuel poverty. He said the funding had not been taken from the NHS but had rather been “offered up” by the DH as it was not likely to be spent.
He added a missing £200m from 2008-09 was a result of the difference between estimates of spending given in April and the final accounts which were now available. That £200m has now been added to the DH’s “end of year flexibilities” pot and it can ask to spend it if it desires.
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Pre-Budget report removes £500m in health capital spending