Page last updated at 17:02 GMT, Friday, 6 June 2008 18:02 UK

NHS 1.7bn surplus spending row

Surgeons in the operating theatre
The NHS had been battling with large deficits

The government has come under fire after figures showed a 1.658bn surplus in the NHS last year.

Ministers say the surplus will be used to improve patient care but opposition parties warned NHS services were being "starved of cash".

A clampdown on spending was ordered after the NHS ran up a 547m deficit in the financial year 2005/06.

The gross NHS deficit is now 122m down from 917m in the previous financial year.

Over the past two years the NHS has faced massive financial pressure, with many trusts cutting jobs and finding other ways to make savings in order to break even.

Massive profits are being racked up in various trusts, yet many areas of patient care are being starved of cash
Norman Lamb, Lib Dem health secretary

Three years ago around a third of trusts were facing financial difficulties.

Officials have indicated that this is now down to 3% of trusts.

David Flory, the Department of Health's director general of NHS Finance, Performance and Operations said: "This healthy surplus is a further indication that the NHS is now on a stable financial footing.

"Organisations now have the headroom and confidence to invest in transforming patient services, whilst having the flexibility to respond to fluctuations in demand."


But shadow health secretary Andrew Lansley said the government's approach to the NHS had been one of "boom and bust".

"After several years of massive deficits the government's response has simply been to attempt to claw back large parts of the increased cash which parliament voted to provide to the health service.

"As community hospitals and maternity wards close across the country, patients who are suffering from these cuts will want to know why Labour is holding back 1.5bn of taxpayers' money."

Liberal Democrat health secretary Norman Lamb warned the surplus painted a "misleading picture".

"Massive profits are being racked up in various trusts, yet many areas of patient care are being starved of cash.

"Public health, alcohol treatment services and mental health are simply not getting the money they need.

"What the government won't admit is that a surplus on the balance sheet is often achieved by making cuts to patient care."

Nigel Edwards, director of policy at the NHS Confederation said at 2% of the overall budget the surplus was not unreasonable.

"The independent sector delivers planned surpluses where possible; there is no reason why the same principle should not apply to the NHS.

"It is prudent to create a surplus to aid long term planning, given that the rate of funding growth in the NHS is set to decrease."

NHS on course for large surplus
22 Nov 07 |  Health
Growth in health spending slows
09 Oct 07 |  Health

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