Department of Health has to borrow money to balance books

Topics covered: Ridouts professional advice

The Department of Health had to go cap in hand to the Treasury to request an additional £205m to balance its books for the 2015-16 financial year. It demonstrates a department under severe financial pressures that seems to operate outside of the rules that are set against other Governmental departments.

The Department’s annual budget was £116.3bn for the current financial year which was an additional £3.1bn from the previous year. The Department has commented that the additional £205m needed represented less than a day’s spending which helps to put into context quite how vast the remit of the Department is. The figure presented does mask the true amount the Department has overspent as against its annual budget. The true figure is almost £1bn as the Department had to transfer additional monies from its hospital building and repair budgets to meet its daily running costs.

There continue to be calls to reform the way that NHS finances are managed and the books both financial and in terms of patient population do not appear to balance. Sally Gainsbury, senior policy analyst at the Nuffield trust has said that emergency care is growing by 3.6% a year but emergency care is only receiving an increase in funding by 1% annually. Commenting on the request the shadow health secretary, Heidi Alexander, said:-

“This is just further proof that Jeremy Hunt has completely lost control of the NHS’s finances…Despite this emergency bailout, it is becoming increasingly clear that patients are going to bear the brunt of this government’s incompetence.”

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