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Welfare Reform on the Web (January 2006): National Health Service - funding

£5bn injection can’t lift NHS debt

N. Hawkes
Times, December 3rd 2005, p.6

A King’s Fund analysis of NHS funding increases over a four year period shows that 2.4% was spent on improving patient care, while 29% was eaten up by pensions rebasing and 27% by wage rises.

Balancing act turns into a financial tumble

Financial Times, December 12th 2005, p.2

The NHS has a statutory duty to balance its books, making neither a surplus nor a deficit.  There is no incentive to save money for i9nvestment.  Indeed, trusts which do make surpluses risk having to bail out overspenders.  NHS finance managers have also habitually used accounting tricks to balance their books at the end of the financial year, such as putting off paying bills,  The result has been that, while the books appear to balance, there are huge underlying deficits that do not show in the accounts.

European ruling widens scope for treatment abroad

F.N. Tait & N. Timmins
Financial Times, December 16th 2005, p.2

A European Court of Justice ruling has increased pressure on the government to pay for hospital treatment abroad for UK patients.

Flagship NHS policy finds itself on health authorities’ critical list

N. Timmins
Financial Times December 7th, 2005, p.2

Under the government’s new “payment by results” system, money in the NHS follows the patient.  Hospitals are paid only for the number of patients they treat.  At present, for all except foundation trusts, the system applies to waiting list operations only.  From April 2006, it is due to apply to 80% of a typical hospital’s activity.  However, its full implementation  is now in doubt as three strategic health authorities have partially suspended or modified the system for fear it will plunge financially challenged NHS trusts into crisis.

Flagship PFI hospital technically bankrupt

J. Carvel
Guardian, December 16th 2005, p.4

The new Queen Elizabeth Hospital at Woolwich was built using private finance initiative (PFI) funding. The annual deficit at the four year old hospital will reach £100m by 2008/9 unless crippling repayments to the private partner(s) are rescheduled according to the auditors.  They warn that the position is unsustainable and that, exacerbated by the NHS accounting system, the financial situation is not recoverable without assistance.

[See also Financial Times, December 17th 2005, p.4 on accounting rules]

Foundation trusts “performing well”

N. Timmins
Financial Times, December 17th 2005, p. 4

Monitor, the foundation trust regulator, reports that foundation hospitals are delivering better financial performance than the rest of the NHS.  The financial position of 31 out of the 32 is good, with only University College London Hospitals giving serious cause for concern.  Other foundation trusts have small deficits and some are beginning to generate surpluses.

[See also Guardian, December 17th, p.6]

Hewitt defends public health spending curbs

S. Boseley
Guardian, December 12th 2005, p.12

Health Secretary Patricia Hewitt has said that health improvement initiatives such as on smoking reduction will not be damaged by cuts despite a leaked memo warning against new spending commitments. The memo refers to the Department of Health, not the NHS according to Hewitt.

[See also Daily Telegraph, December 12th, p.8]

Hewitt tells hospitals with deficits to delay operations

J. Carvel
Guardian, December 7th 2005, p. 4

Health Secretary Patricia Hewitt has told NHS trusts to bring their deficits under control by delaying routine operations until the patient is about to hit the six month maximum waiting time target.  Penalties for poor financial performance have also been announced, and the King’s Fund has called on the government to introduce a regime to deal with hospital failure.

[See also Daily Telegraph, December 7th, 2005; p.2; Independent December 7th, 2005 p.11]

Hospitals feel pain of funding problems

N. Timmins
Financial Times, December 27th 2005, p.2

Large-scale PFI hospital projects are under threat due to financial problems. Doubts about the viability of the big schemes are growing as the nature of health care is shifting more work out of hospitals and closer to the patients.

NHS must mend its ways or plunge into £7bn black hole

N. Hawkes
Times, December 12th 2005, p.4

A report published by the Reform think tank suggests that the NHS could face a huge accumulated deficit of £7bn by 2010 unless there is a dramatic increase in productivity.  The report finds that:

  • PFI hospital building schemes are costing far more than planned
  • Britain is building more new hospitals than all other G7 nations put together, and many will come into operation just as funding increases slow in 2008.
  • The number of medical students is rising much faster than doctors are retiring
  • Treatment costs are rising fast
  • Unfunded spending initiatives have continued to flow apace from the Department of Health

NHS plans £200m overspend despite record funding

N. Timmins
Financial Times, December 2nd 2005, p.2

The NHS is planning to run a deficit this financial year, overspending by £200m in spite of being in the seventh year of record funding increases.  Clawing back last year’s £250m overspend has proved more difficult than expected.  The plan now is to repay the £200m in financial year 2006/07.

[See also Times, December 2nd  2005,  p.15]

NHS sends in hit squads to tackle £620m deficits

C. Brown
Independent, December 2nd 2005, p.23

Financial and management “turnaround” teams will be sent into struggling hospitals, strategic health authorities and primary care trusts to help them achieve savings and balance their books as the total NHS-wide deficit for 2005/06 is expected to reach £620m. Comments from political parties and the Health Select Committee are reported.

[See also Daily Telegraph, December 2nd  2005, p.1&2;]

Operations go-slow forced by NHS crisis

J. Carvel
Guardian, December 3rd 2005, p.1

Primary care trusts struggling with large financial deficits are instructing hospitals to delay elective surgery until next financial year.  The strategy is a response to the Health Secretary’s crackdown on overspending, but it threatens the drive to reduce waiting times.

[See also Times, December 3rd, p.1 &2 ]

Psychiatrists say NHS cuts put public at risk

J. Carvel
Guardian, December 8th 2005, p.6

A group of 27 consultant psychiatrists at Addenbroke’s Hospital in Cambridge have warned that a sudden 10% cut in their local budget is threatening satisfactory service delivery and the safety of patients, carers and the public. In order to balance their books, local primary care trusts have decided to cut spending on patients going for mental health treatment at the trust.

Short stay hospital patients face charge for painkillers

S. Boseley & J. Carvel
Guardian December 13th 2005, p.13

Day surgery patients face prescription charges for drugs that are free to inpatients on discharge.

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