Deficits in the NHS (2006)

The NHS has rarely managed to balance its books exactly; in many years it has overspent, and in some it has carried a surplus. According to the latest figures (unaudited accounts for the financial year 2005/6), it is likely to record a substantial overspend – in gross terms, around £1.3 billion, equivalent to around £512 million net overspend after taking account of surpluses made by some NHS organisations, particularly strategic health authorities (SHAs).

While the net overspend represents slightly less than 1 per cent of the total NHS spend and affects a minority of organisations, it does represent a deterioration over time.

Many people are wondering how the NHS could overspend even by this much given the unprecedented increases in funding it has received – an average of around 9 per cent cash increase each year since 1999 and even higher levels in the last few years.

This briefing analyses what is known about the causes of current deficits.

Deficits in the NHS briefing cover

No. of pages: 8

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