Magazine article Public Finance

NHS Still Suffers from 'Legacy of Underspending'

Magazine article Public Finance

NHS Still Suffers from 'Legacy of Underspending'

Article excerpt

NHS organisations continue to face tough financial decisions because of chronic underspending in the 1980s and 1990s, the NHS Confederation said this week.

The claim comes in advance of the Labour Party conference in Brighton next week and follows the publication of English trusts' and primary care trusts' financial position on the Department of Health's website.

These unaudited figures showed that trusts overspent by £306m in 2004/05, while PCTs had an overall deficit of £266.5m, despite record funding. However, these deficits were partially balanced by underspends at the 28 strategic health authorities totalling £372.7m.

Therefore, in total, these three sectors, excluding the first three waves of foundation trusts, overspent by £200m. In June, the National Audit Office and the Audit Commission suggested the deficit would be around £140m.

The NHS Confederation said that during 2004/05, the NHS had used 73% of the extra £5.9bn it received to boost services that had been neglected in the past.

Confederation chief executive Gill Morgan said suggestions that the NHS had failed to invest additional investment wisely were wide of the mark. …

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