09.07.12
Treasury claws back £1.4bn NHS underspend
Although the NHS underspent by £1.7bn in the last year, £1.4bn of this has been taken back by the Treasury to be reinvested in different departments.
Labour criticised the move, labeling the Prime Minister a “conman” for going back on promises to reinvest savings in the NHS.
Official Treasury figures show this was the largest underspend in Government, representing 1.6% of the NHS’s budget for 2011/12. In total, government departments cut spending by £6.7bn more than they had planned to in the year to March.
The planned reduction in spending was £4.4bn, but spending was actually down by £11bn compared to 2010-11. According to analysis by the Institute for Fiscal Studies (IFS), only £900m of this will be carried forwards to the next year, with the rest reallocated by the Treasury.
The £1.4bn NHS underspend will now be allocated to areas of public spending unrelated to health, such as council tax and major infrastructure projects.
Shadow health secretary Andy Burnham said: “The Government promised that all efficiency savings would be reinvested in the NHS, but Friday’s figures confirm George Osborne’s £1bn raid on its budget to pay for tax cuts for millionaires.
“People will today see David Cameron for the NHS conman he is: repeatedly cutting the budget on the quiet while 4,000 nursing posts are axed and patients pay the price.”
Prof John Appleby, chief economist at the King’s Fund health think tank, said: “This money shouldn’t have been given back by Andrew Lansley. It could have been spent on health or social care, where we know we need to spend more money because needs are rising.
“This is over a billion pounds that was agreed by parliament to be spent on healthcare, which now won’t be, so it’s very surprising that ministers have agreed to do this given we know that there are extra demands on the NHS, and this money could have been used to improve people’s health.”
But health minister Simon Burns said: “This Government has met its promise to provide a real terms increase in the health budget.
“The amount spent on frontline services in 2011 to 2012 increased by £3.4bn in cash terms or 3.5% compared to the previous year. While spending has increased on patients, we have reduced inefficient spending, saving over £1.5bn on bureaucracy and IT.
“This money has not been lost but is being carried forward for next year. Our increases in frontline spending are already showing results – waiting times have been kept low, there are more doctors, the NHS has performed more diagnostic tests and planned operations, and infections have been reduced even further.”
Local NHS organisations have also built up individual surpluses that together total around £1.6bn – but this will carry over to next year.
Tell us what you think – have your say below, or email us directly at [email protected]