The Department of Health will use part of its own internal underspend to release itself from Treasury-imposed cut backs in administrative spending.
As part of the comprehensive spending review the Treasury imposed a two per cent (£5m) reduction each year to the DH’s central budget of£225m. But in its business plan for 2008-09 the department revealed that it planned to use£6m of its accumulated£14m central surplus to “cushion” itself against the Treasury cuts and make up the difference.
The DH said this move “reflected the pressures that we can expect to manage as we respond to Lord Darzi’s Next Stage Review.”
But chief executive for the NHS managers union Managers in Partnership Jon Restell accused the department of hypocrisy. “The stated aim of Commissioning a Patient Led NHS was to strip out 15 per cent of management costs. Yet surely what’s good for the goose is good for the gander. Arguably the NHS will face more pressure than the DH in implementing Darzi.”
Mr Restell said he was concerned that there was little evidence discussions around Darzi were giving any consideration to the administrative capacity needed to implement his reforms.
But NHS Confederation director of policy Nigel Edwards said the DH was within its rights to choose to use its surpluses to off set cuts to administrative budgets. He added that he hoped the DH would be happy to see NHS organisations do likewise if they also felt the need.
The DH’s planned spend over its allocation is subject to Treasury approval and will bring its budget for 2008-09 just slightly above its 2007-08. The department’s business plan noted that the use of its surplus was a one-off event as it was important that the DH brought its administrative costs down.