The Department of Health has asked regulators to quantify the amount of NHS provider capital expenditure that could be delayed until 2016-17, as central bodies struggle to bring down the huge deficit expected in the provider sector this year.

  • DH wants to know how much capital investment is expected this year and what can be deferred
  • Regulators contacted providers this week for information
  • DH has raided the national capital budget in last two years

Monitor and the NHS Trust Development Authority have been speaking to providers in recent days to find out how much capital investment they now expect to commit in 2015-16, and how much of that spending could be safely deferred.

Richmond House

The DH help has raided the capital budget previously to cope with pressure on its revenue budget

Capital budgets in health are used for everything from replacing aging medical devices to investing in information technology or new buildings.

However, over the past two years the DH has repeatedly raided the national capital budget to help cope with the escalating pressure on its revenue budget, which covers ongoing costs of running services, such as wages.

The latest move by regulators is intended to ascertain whether there is any planned capital spending that could be put back to allow a further transfer to the revenue budget in 2015-16.

The newly departed Monitor chief executive David Bennett this week warned that providers would “really struggle” to bring in a deficit of less than £2bn this financial year.

In an email seen by HSJ, Monitor wrote to foundation trust chief executives this week, saying: “The DH have asked us to ascertain the likely [2015-16] outturn capital expenditure for FTs, and the scope for further deferral of capital expenditure.”

It added that as a result Monitor would need to know:

  • what each FT now expected its outturn capital expenditure to be;
  • whether and by how much this number could be reduced by the “safe deferral” of any uncommitted spending; and
  • to what extent FTs’ planned capital spending depended on the further drawdown of loans from the DH.

A Monitor spokesman said: “The NHS faces an unprecedented financial challenge and we have asked foundation trusts to leave no stone unturned in their efforts to become more efficient.

“As part of those efforts we need to understand what capital investments foundation trusts are planning and whether there is scope for deferral of this spending to help reduce the financial pressure the service is under.”

A DH spokesman added: “The NHS must show tight financial grip, so both Monitor and the TDA ask FTs and trusts to report their expected capital plans at regular intervals. Trusts need to live within their means by implementing some of the cost control measures we have introduced, like clamping down on rip-off staffing agencies and expensive management consultants.”

Topics