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£3bn returned to Treasury from DH

1st November 2012

About £3bn has been returned to the Treasury by the Department of Health in the last two years, it has been revealed.

Pound Coins

At a time the NHS is facing tight financial settlements, figures show the department had handed back around £1bn of the funding it was allocated for health spending in 2011/12 with just £316m of the £1.4bn that it had left unspent in the last financial year having been carried over for it to use in 2012/13.

The Treasury also confirmed that the Department of Health had a £1.9bn underspend in 2010/11 but made no use in that year of the “budget exchange” scheme which allows government departments to carry over some unspent funds for use in future years.

The think tank the Nuffield Trust said the findings suggest the department should rethink its approach to financial risk management.

Chief economist Anita Charlesworth said: “The department’s system for managing risk essentially requires organisations through the system to plan for surpluses, leading to aggregate underspends.

“They don’t have the mechanisms in place to then reinvest that money, because they have limited access to the budget exchange scheme.”

The Nuffield Trust suggested that some of the cash could have gone to primary and social care services, which are suffering financial constraints under the current economic climate.

The Department of Health defended its position and said that the amount spent on frontline services in 2011/12 increased by £3.4bn at a time that £1.5bn had been saved on bureaucracy and IT.

 

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Article Information

Title: £3bn returned to Treasury from DH
Author: Mark Nicholls
Article Id: 23083
Date Added: 1st Nov 2012

Sources

Health Service Journal

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