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Welfare Reform on the Web (August 2009): National Health Service - funding

Financial management in the NHS: report on the NHS summarised accounts 2007-08

Public Accounts Committee

London: TSO, 2009 (House of Commons papers, session 2008/09; HC 225)

The Department of Health (the Department) and the NHS achieved a surplus of 1,674 million in 2007-08, representing almost 2% of total available resources and the equivalent of about one week's funding for the whole NHS. The surplus was significantly higher than the original forecast of 916 million and more than three times that recorded in 2006-07 (515 million). During a period of economic uncertainty when resources are severely stretched it is more important than ever that the NHS can demonstrate value for money and continuous improvements in productivity. The Department intends that the NHS should generate 15 billion in efficiency savings over the next three years. It will be important that these are achieved and are sufficiently robust to withstand external scrutiny, while at the same time not having any detrimental effect on patient care. Going forward the Department and NHS face a number of challenges, including changes to the financial reporting framework and timetable, and further system reforms under which a quality element will be introduced into how NHS organisations are funded. The surplus generated and better financial management should, if maintained, help deal with the financial implications of meeting these challenges. This report examines the Department of Health and Monitor, the independent regulator of NHS Foundation Trusts, on the financial performance of the NHS and NHS Foundation Trusts, on how the surplus was achieved and on its impact, as well as the financial challenges facing the NHS in the future.

Leaders want pay deal renegotiated as fears of mass redundancies grow

C. Santry and S. Gainsbury

Health Service Journal, July 9th 2009, p. 4-5

NHS leaders are calling for the third year of the current pay settlement covering 2010/11 to be renegotiated to avoid mass redundancies. Staff reductions are anticipated among senior and junior managers and administrators. These, plus support staff and clinicians other than doctors and nurses are also the most likely targets for recruitment freezes. The safest posts are clinical.

NHS hospital faces partial sell-off

N. Timmins

Financial Times, July 22nd 2009, p. 4

The private sector is to be invited to tender for the running of a large hospital for the first time in England. Hinchingbrooke Hospital in Huntingdonshire is to be offered to private sector healthcare providers or other NHS foundation trusts as a franchise. It has run up a deficit of 40m on a 90m turnover.

'Tax or axe' warning on future NHS funding

L. Elliott

The Guardian, July 20th 2009, p. 2

A report by two of Britain's leading think tanks, the King's Fund and the Institute for Fiscal Studies (IFS) has warned that the NHS faces the biggest squeeze on its funding since it was founded in 1948, despite pledges by Labour and the Conservatives to spare health from spending cuts in the next parliament. Spending on the NHS has risen much faster than inflation in the three-year spending rounds since Labour came to power with annual real increases of 7% a year between 2000 and 2006. The IFS/King's Fund report states that the next spending review period, covering the years to 2014, could see an across-the-board 2.3% per year cut in spending by all departments including health.

(See also Financial Times, July 20th 2009, p. 2)

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