£1bn underspend in 2021/22

The year-end position, based on draft accounts, shows actual outturn expenditure of £149.6bn against a planned spend of £150.8bn. Planned spending includes the additional funding of £6.2bn, largely relating to the elective recovery fund and Covid budgets.

NHS England and NHS Improvement chief financial officer Julian Kelly said that around half of the underspend (£604m) related to ring-fenced Covid budgets, with the other half (£602m) reflecting the year-end financial position in the commissioning sector. An underspend in the Covid vaccination programme accounted for the largest element of the former.

A report to the national bodies’ board meeting in common on 19 May said clinical commissioning groups ended the financial year with a £109m underspend against planned expenditure of £115bn, while direct commissioning returned an underspend of almost £300m.

Mr Kelly said £430m of the overall underspend is ‘presentational’, and driven by technical adjustments in CCG and provider accounts. He explained the adjustments relate to accounting issues such as donated assets and the different accounting rules around departmental expenditure limits and annually managed expenditure. The adjustment amounts are larger than normal due to Covid-19.

Providers had capital spending of more than £6.8bn in 2021/22, an underspend against plan of just £44m – an achievement Mr Kelly described as ‘landing on a pinhead’.