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NHS deficit 'set to reach £94m' NHS slipping into deficit again
(about 2 hours later)
The forecasted financial position of the NHS this year is worsening. The NHS is slipping into deficit once again as hospitals and local community services struggle to balance the books.
The Department of Health has predicted a £94m deficit by the end of the 2006-07 financial year, compared to an expected £18m surplus three months ago. The Department of Health is predicting a £94m shortfall by the end of the 2006-07 financial year, compared to an £18m surplus just three months ago.
Hospitals and primary care trusts, responsible for services such as GPs and health centres, are still heavily in debt - over £1 billion overall. Hospitals and primary care trusts, in charge of community services such as GPs, are racking up the biggest debts.
This is being covered by reserves built up by regional bodies making savings from funds including training budgets. But the they are being bailed out by reserves being built up by regional health chiefs in England.
The overall NHS budget is over £80 billion. Despite these financial challenges, the NHS continues to treat more people than ever before with shorter waits, particularly in areas such as cancer and A&E David Nicholson, NHS chief executive
Last year the overall final NHS deficit was over £500m. Strategic health authorities (SHAs), which oversee NHS trusts, have used money from central budgets such as training and public health, as well as taking some of the extra £5.4bn funds earmarked for the health service this year.
More soon. Hospitals and PCTs finished last year nearly £1.07bn in deficit, leaving the NHS in the red by over £500m once surpluses made elsewhere were taken into account.
That deficit was paid off by cuts made to this year's budget.
But the half-year forecasts show that the NHS still looks like it is racking up deficits despite government promises it would balance by the end of this financial year.
Hospitals and PCTs are forecasting a deficit which is almost exactly the same as last year - £1.01bn - amid the wave of job losses and hospitals cuts happening across the NHS.
However, the overall deficit is predicted to be £94m as a contingency fund of £350m has been amassed by SHAs, who themselves are predicted to end the year £569m in surplus.
'Mismanagement'
Shadow health minister Stephen O'Brien said: "Labour's mismanagement has put our NHS in this financial mess.
"Now we see that, despite all their warm words and promises, not to mention extra millions spent on turnaround consultants, Labour are failing to solve the NHS cash crisis."
The Department of Health said it was confident financial balance could be reached by the end of the year, adding SHA's had identified £100m of savings that could be made although these had still to be fully confirmed.
NHS chief executive David Nicholson added: "Despite these financial challenges, the NHS continues to treat more people than ever before with shorter waits, particularly in areas such as cancer and A&E.
"For those organisations where insufficient improvement has been made, action plans have been agreed with SHAs to ensure that financial performance is improved in line with local plans."