24 October 2008
By Tash Shifrin
The NHS will be allowed to spend this year's projected £1.75bn surplus 'in a planned way', its finance director has revealed.
The 2009/10 NHS Operating Framework is set to give the NHS permission to dip into the surplus to fund medium-term investments – marking a substantial change from last year's guidance, which required strategic health authorities and primary care trusts to carry any surplus forward.
NHS director of finance Bob Alexander told the CIPFA health finance conference on October 16 that NHS funding was likely to be maintained at current levels, in line with the pledge made earlier this month by Prime Minister Gordon Brown. 'I expect the growth for next year to be of the same order of magnitude as this year and I expect that in 2010/11,' he told delegates.
'I do think we will start to access the NHS surplus and draw it down in a planned way,' he added. It should be used 'to sustain the investments we think we need' to meet health minister Lord Darzi's Next Stage Review. Alexander also expected 'a concentrated focus on further drives for efficiency'.
But the NHS finance chief said the operating framework, due to be published at the end of the month, would be delayed until after the chancellor's Pre-Budget Report. 'If I were a betting man, I would like us to say all we're doing is moving things on a month,' he suggested.
A much-delayed revised funding formula, a new tariff and details of this year's allocations for PCTs will be issued with the operating framework. Alexander acknowledged the effects of the delay, saying: 'I recognise completely the difficulty this makes for planning,' but he set this in the context of the current economic instability.
'I think there's a balance between producing something only to find you haven't given the correct indications to the service when events we cannot control say to the public sector we're in another place,' he said.
Asked about the reasons for the NHS's turnaround from a deficit of £547m in 2005/06 to a surplus of £1.66bn in 2007/08, Alexander praised the efforts of finance managers.'In some places there was a lack of grip, and we got that re-established. In some places we were exposed by decisions that hadn't been taken politically and managerially,' he said.
'Some people worked extremely hard and put a lot of focus on it. It became a top of the office issue and there was total management rigour in dealing with it.'
PFoct2008
