NHS on course for year-end surplus

24 March 2022 Steve Brown

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A paper presented to the NHS England and NHS Improvement board said that in total at month 10, the forecast provider and commissioner position was for a surplus of £640m or 0.4% of the total £150bn spend. However, this is expected to grow further.Julian.Kelly.l

‘I anticipate that, by the time we actually get to the end of the year, that will be slightly higher at about £1bn,’ NHS England chief financial officer Julian Kelly (pictured) told the board.  He added that this was less than a 1% difference against the total spend.

It is widely recognised that the NHS faces a difficult financial challenge in 2022/23. Covid funding is reducing, efficiency demands are increasing and the NHS is expected to make major in-roads into care backlogs.

Mr Kelly said that one of the reasons for the underspend was that providers were having to control spend in preparation for the new financial year. ‘They are having to manage that glide path,’ he said.

‘Omicron has also meant that we have done less elective work than we would have hoped,’ he said. ‘It has disrupted the NHS through the winter and taken out capacity that would otherwise have been used for elective care and that has also reduced the marginal operating costs.’

Additional contributions have come from slippages in some transformational programmes. For example, the recruitment to additional roles in primary care has been slightly slower than expected, although it was still on track to reach its goal. This was due to GPs being so busy with high demand from patients and the vaccination programme.

Within the overall financial position, clinical commissioning groups’ and direct commissioners’ month 10 forecasts were for small year-end underspends of £106m and £36m against plan, contributing to an overall commissioner underspend of £89.5m after technical and ringfenced adjustments. Providers were forecasting a surplus of £308m before adjustments.

Providers had spent £3.6bn on capital schemes up to month 10 – 54% of the 2021/22 budget and in line with previous years’ year-to-date spend at that point in the year. However, the forecast is for just a small underspend on the £6.8bn overall provider capital budget. ‘We will basically land on the money,’ said Mr Kelly. ‘We’ll be within £20m to £30m on about £6bn spend by the time we end the year, which is an incredible job when you think of everything that trusts have had to manage this year – keeping going with the programme of investment and change to try and safeguard the estate and transform services,’ he said.