Magazine article Public Finance

DoH Admits That Accounting Rules Enlarged Deficit

Magazine article Public Finance

DoH Admits That Accounting Rules Enlarged Deficit

Article excerpt

The Department of Health's finance director Richard Douglas has admitted to MPs that the apparent sudden deterioration in the NHS s finances is a product of changes in accountancy practice.

As Public Finance revealed last month, the combined impact of surpluses carried over under Resource Accounting and Budgeting rules and capital-to-revenue transfers between 2001/02 and 2004/05 was to disguise underlying allocation overspends of between £225m and £328m.

In 2005/06 the impact was the reverse, as Rab carry-over rules entailed a net deduction to the NHS s allocation, meaning the underlying allocation overspend was £395m rather than the reported £512m.

'The Public Finance figures are absolutely correct,' Douglas told the Commons health select committee last week. 'The position has not dramatically suddenly deteriorated - [it] has been a lot natter. …

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