NHS facing £140 million deficit

The NHS is likely to be in deficit by about £140 million, according to the latest government figures.

Unaudited figures collected by the Department of Health also showed that NHS Foundation Trusts carried around £30 million of the deficit.

Health Secretary Patricia Hewitt stressed that the deficit represented about 0.2% of the budget, which was a “tiny fraction”.

However, a joint report by the National Audit Office and the Audit Commission found that the number of individual NHS bodies failing to achieve financial balance increased from 12% to 18%, with 106 bodies failing to balance their books in 2003-04, compared to 71 in the previous year.

More trusts were also incurring “significant deficits”, the report warned.

12 NHS trusts reported a deficit of over £5 million, compared to seven the previous year. The number of Primary Care Trusts with overspends of over £5 million also increased slightly, rising to four, from three the previous years.

However, the report also found that the aggregate underspend for all NHS bodies was £72 million, compared with an underspend of £96 million the previous year.

James Strachan, Chairman of the Audit Commission, said: “Financial management is now a matter of major concern for the NHS.”

Shadow Health Secretary Andrew Lansley blamed the government for wasting additional resources on bureaucracy.

However, Ms Hewitt said: “Today’s report shows that the vast majority of NHS bodies are managing the extra resource well, but it also very clearly indicates that in a minority of organisations, leadership and financial discipline are weak. These need to be tackled head-on and with a sense of urgency.

“I know that some NHS bodies are experiencing financial pressures this year, despite record increases in their budgets. But I believe that the reforms we are putting in place such as new staff contracts, new financial flows and new IT are the solution, not the problem. The reforms themselves are designed to stimulate contestability and consequently encourage good financial discipline.”

(KMcA/SP)