£1.3bn surplus forecast for 2021/22

At yesterday’s NHS England and NHS Improvement board meeting in common, the organisations’ deputy chief financial officer for operational finance, Peter Ridley (pictured), said the NHS was on course to finish the financial year within budget.

The surplus, equivalent to 0.9% of the in-year allocation of £153.7bn, comprises forecast underspends of just over £1bn in NHS commissioners and around £295m in providers.

The operational performance and finance paper tabled at the meeting said that, in the year to date, commissioners had an aggregate underspend of £300m and providers, £219m.

Clinical commissioning groups had a small underspend against plan of £45m at month eight, and a forecast year-end surplus of £240m. The report said: ‘CCGs and direct commissioners are expected to deliver underspends against plan, principally as cost control measures and efficiency plans begin to bite.’

‘We are seeing the impact of operational pressures and Omicron, meaning that we haven’t been able to deliver all the investment we would have like to, and some programmes are late, partly driving the surplus we have there,’ Mr Ridley told the meeting.

In the commissioning sector, a forecast underspend against plan in central costs (£280m) reflected vacancies and the deferral of some programmes due to operating pressures, offset to some extent by additional Covid costs. And a forecast underspend against planned transformation and reserves expenditure was due to the impact of Omicron and other frontline pressures.

Provider costs are 'marginally below plan in aggregate relative to income', the paper said, leading to a forecast surplus of £31m before technical adjustments. There are variances against plan in both income and pay due to the pay awards, which were recognised at month six but not included in the plan (an announcement on pay was made in year). The report added that provider technical adjustments were mostly due to the expected impact of donated assets.

Provider capital spending of £2.7bn was in line with month eight spending in previous years. The 2021/22 capital budget is more than £6.8bn and trusts are forecasting an underspend of £504m.