The Department of Health underspent its revenue budget by just £1.2m in 2014-15 – a fraction of its £110bn budget – the department’s accounts reveal.
- DH revenue budget underspent by only £1m, but expert points to “clear underlying deficit”
- Spending on private providers and other non-NHS bodies increased by 10 per cent in 2014-15
- Department’s performance propped up by £890m of transfers to revenue budget
This is despite the DH’s position against its expenditure limit being propped up by a £250m increase to the revenue budget from the Treasury, plus £640m being transferred from the capital budget.
These transfers, revealed by HSJ in February, were prompted by the huge revenue pressures on the NHS provider sector.
Anita Charlesworth, chief economist at the Health Foundation, said the report showed the whole health service is “clearly in underlying deficit”.
She added: “Despite a treasury bailout and capital budgets being used for day to day spending, the DH has only just managed to balance its resource limit.
“This is clearly unsustainable and the outlook is very bleak. The department will not be able to get through this financial year without a further transfer in capital resource.”
The accounts show the provider sector had an underlying deficit of £1.2bn in 2014-15, which was partly balanced by surpluses and underspends in other areas.
Balancing the books in the provider sector will be far more difficult this year as acute trusts alone have forecast an overall deficit of more than £2bn for 2015-16.
Spending on temporary staff at all NHS organisations was £3.8bn in 2014-15, an increase of 27 per cent on the previous year. Spending on management consultants rose by 5 per cent to £604m.
Total spending on non-NHS bodies was £11bn in 2014-15, up from £10bn in 2013-14 and £9.2bn in 2012-13. The £4bn capital budget was underspent by £63m.
On financial risk and sustainability, the report says: “The department is working closely with Monitor and the NHS Trust Development Authority to keep the position under regular review and to ensure progress is being made towards recovery.
“The NHS budget has increased in real terms in 2014-15, and has continued to do so, during every year of the current spending review period.
“Despite considerable cost pressure in the NHS, arising mainly through increasing demand for services, the department expects to spend within the control limits set by Parliament.”
Real terms spending grew by £1.3m last year, an increase of 1.1 per cent from 2013-14.