True scale of NHS deficits masked, says The King's Fund

Commenting on the figures published today in the Chief Executive's report to the NHS, which reveal the net NHS deficit has more than doubled to £512 million, The King's Fund chief executive Niall Dickson said:

'These figures mask the true scale of financial problems in the health service. The gross deficit has increased throughout the NHS to £1.27 billion and has been reduced to a net of £512 million only by using increased surpluses from other parts of the service. In fact, more NHS organisations are in deficit than predicted, while the net deficits for primary care trusts and hospitals are worse than last year.

'It is especially worrying that trusts have known for months that they have been running an overspend – yet even though they have been under enormous pressure they haven't managed to tackle this. Some will certainly need more time but the requirement to manage a budget that already assumes efficiency savings as well as rising cost pressures such as pay deals, new drugs and other technological costs will also add to the challenge.'

Niall Dickson added: 'The health service faces significant challenges over the next year and the issues are for both local management and the government to sort out. At a national level we have already had too many changes pushed through too quickly – the priority now must be to sort out the financial muddle and concentrate on a small number of key areas such as improving productivity and efficiency. Short-term fixes will not help the service in the long-term and are likely to only lead to further rounds of job losses and service cuts.

'But it is important to keep all this in perspective. There are serious questions about how some of the extra money going into the health service has been used up – not least in large pay awards – but it has also led to real achievements in reduced waiting times, better cancer services and treatment of coronary heart disease.'

Notes to editors: 

  1. For further information or interviews, please contact the King’s Fund media and public relations office on 020 7307 2585, 020 7307 2632 or 020 7307 2581. An ISDN line is available for interviews on 020 7637 0185.
  2. The King’s Fund is an independent charitable foundation working for better health, especially in London. We carry out research, policy analysis and development activities, working on our own, in partnerships, and through funding. We are a major resource to people working in health and social care, offering leadership development programmes; seminars and workshops; publications; information and library services; and conference and meeting facilities.