NHS deficit doubles to £512m, but true figure may be higher

The overall deficit for the NHS in England more than doubled to £512m (€750m; $945m) for 2005-6 from the previous year, show figures released last week.

Figure 1.

However, the government has stressed that the problems lie with a minority of trusts around the country and said that the deficit was stabilising and had fallen by £110m in the past six months.

The Department of Health, publishing its annual NHS report, said that despite the unaudited deficits the report told a “good news story,” in that waiting times for operations and at emergency departments were shorter than ever.

The secretary of state for health, Patricia Hewitt, said: “I know there are financial challenges in a minority of organisations, but it is encouraging that the provisional end of year figures show that the minority of trusts that are overspending are now focusing on their problems and putting plans in place to tackle the issue.

“The end of year position is the equivalent of a person on an annual wage of £20 000 overspending by around £160. It's a problem—but a manageable problem.”

The government wants the NHS to reduce its deficit to zero by the end of 2006-7.

Gill Morgan, chief executive of the NHS Confederation, the body that represents NHS organisations, said: “The overall figure hides the patchy distribution of the deficits. Whilst transforming the system is challenging to all, the biggest problems are focused in a small number of communities where the problems are long standing, highly complex, and deep rooted.”

The Liberal Democrats' shadow health secretary, Steve Webb, said: “The government sets NHS pay centrally, sets NHS targets centrally, and sets the cost of an operation centrally. Then, when the sums don't add up, they say it is the fault of local management.”

The government's optimism was checked, however, by warnings made in a joint report on NHS finances by the spending watchdogs the Audit Commission and the National Audit Office.

The report warned that unaudited accounts can underestimate the true deficit and said that whereas the unaudited figure for the 2004-5 deficit was £133.9m the actual figure after audit was £251.3m.

Doctors' leaders said the government was to blame for NHS deficits, because of its “poorly designed policies and political interference.”

Paul Miller, chairman of the BMA consultants' committee, said: “Care is suffering, jobs are disappearing, patients and staff are paying the price. Something is going very badly wrong with these health policies.”