Intrigue over that £1.5bn shaved off the DH’s departmental expenditure limit for 2008-09 continues, with Nick Timmins writing in today’s FT that the Treasury is eyeing up unspent surpluses.

For those with better things to do than compare figures stuffed at the back of the pre-Budget report with figures stuffed at the back of the Budget report, I’ll recap:

Table B18 in the 2008 pre-Budget report set out the developmental expenditure limits (DEL) for each government department for the years 2007-08 to 2010-11.

The DH’s limit for 2008-09 was £94bn, of which, it said, the NHS’s slice was £92.5bn.

Fast forward to last week and the Budget report updates those DELs with table C11. There the DH’s limit for 2008-09 was down by £1.5bn to £92.5bn, with the NHS’s share reducing to £90.9 – down £1.6bn.

[It gets exciting again from here onwards, honest…]

That of course looks suspiciously like the greater chunk of the £1.8bn surplus the NHS has maintained over the last two years. And although David Nicholson does not like us saying it, we know that as £1bn of it won’t be spent before 2011, it has effectively been clawed back: not from the NHS organisations that generated it, and will - thus far - get to carry it forward, but from whatever pot the Treasury decides to give the DH as a whole that year, as they surely won’t forget £1bn is already “out there”, particularly not now. (Just think: they could fund the car scrapage scheme for three years with that!)

But that still leaves the £800m the DH has said the NHS will be spending over 2009-10 and 2010-11. The problem is it hasn’t been added to the DH’s DEL for either of those years.

If it’s not in the DEL, but the NHS still spends it, every £1m spent by PCTs and trusts will be another £1m the DH can’t spend without breaching its expenditure limit. Around the country, NHS finance directors’ hearts are bleeding; all those central admin budgets and McKinsey reports…

But this is also the pot which pays for training, R&D, other bits of one-off funding and things NHS managers really like, like regulation and inspection. The DH has been gradually devolving responsibility for bits of those spending areas to strategic health authorities, so watch that space for the classic “you can do this more efficiently (cheaper) than us” manoeuvre as the budget comes under pressure.

But according to the DH last week, the missing DEL is no cause for alarm. A spokesman told me the discrepancy was due to the pre-Budget report stating, quite normally, the planned spend, while the Budget report states the actual spend. As actual was less than planned (hence surplus) all is fine. But why hasn’t £400m been added to the DELs for 2009-10 and 2010-11? Where’s it gone?

Departmental surpluses get carried forward as something called End of Year Flexibility and I’m told they are paid for out of the departmental reserves. But for 2009-10 the total reserve – for all government departments – now stands at £700m, down from £2.8bn at the time of the pre-Budget report due to extra spending in Iraq and Afghanistan and the cost of the European elections.

So the question is: what of the £700m reserve for 2009-10 is the DH’s? Is the full £400m we’d expect sat there with a big fat “DH” label on it? If it is, that wouldn’t leave much change for the others, and schools alone have £250m left over from last year.

Alas, at this point in HSJ’s relentless questioning on your behalf, the Conservatives got their calculator out and noticed the DEL gap too, which meant that as much as the press officers at the DH desperately wanted to deal with our quite fascinating questions, their civil service code of conduct prevented them doing so. The Labour Party took the helm instead, with health minister Ben Bradshaw explaining all by saying the Opposition were “innumerate”.

(This is the same Mr Bradshaw who at last year’s Labour Party conference got the NHS’s income from prescription charges wrong to the tune of 100 per cent. Luckily HSJ columnist Michael White was on hand to correct him, advising the figure was £400m, not £800m. It wasn’t a moot point: this was the party conference during which Gordon Brown staged his comeback (remember that?) by announcing free prescription charges for cancer patients).

Luckily, ever the kingpins, the Treasury’s press office are much less concerned about upsetting political or even departmental sensitivities and provided us with the following answer:

 “The answer to your question about what the ‘Reserve’ line in the DEL table is made up of is more straightforward than I thought - nothing yet! This figure is the amount of the reserve which has not yet been drawn down and therefore it’s not possible to say what it will be used for.”

Well that’s ok then.

The End of Year Flexibility figures are published in what the Treasury affectionately calls the Peowp – the public expenditure outturn white paper . Last year’s one shows the DH carried forward £2.3bn from 2007-8 into 2008-9 (the £1.7bn surplus plus the £500m “contingency” the DH has given back in lieu of efficiency savings, I guess). The next one is due “in the summer”. We may have to wait for then to find out what is engineered.