News / English NHS looks set for £1.5bn underspend

The NHS in England looks likely to have achieved an overall surplus of £1.5bn in 2009/10, according to an analysis of strategic health authority board papers by Healthcare Finance.

The unaudited figures, all but three of which are year-end positions, show there was a healthy surplus, although there was concern over increases in activity and the failure of some trusts to achieve their cost improvement programmes.

Foundation trusts, which had an aggregate £339m surplus at the end of quarter three, are not included in the figures.

As in previous years, most of the surpluses were held by SHAs and primary care trusts. The most significant risk, both in year and for 2010/11, was the rise in activity.

NHS London said increased activity was a significant cost pressure for primary care trusts, but there was little compensation in trust bottom lines, partly because of the underachievement of cost improvement plans.

The introduction of HRG4 had complicated matters when trying to produce a robust risk assessment.

The capital’s SHA planned for a 2009/10 surplus of £366.9m, including £258m to write off historical deficits. While its forecast outturn position at month 10 was £361m, its year to date position was a surplus of £251.5m. The SHA admitted that this indicated significant in-year risks.

In the East of England, NHS Peterborough was the only organisation that overspent against its target in 2009/10, showing a deficit of £13m.

In South Central, only Portsmouth Hospitals NHS Trust ended the year in a deficit position (£14.8m – £5.8m worse than plan).

However, the SHA pointed out that across the South Central health economy, significant levels of cost improvement and demand management savings (£221m) had been achieved during 2009/10. The success of demand management schemes was reflected in a reduction in activity levels, which compared favourably with the rest of the country, it added.

In the West Midlands, premium payments to staff for waiting list work and under-achievement on cost improvement programmes left three hospital trusts with outturns at least £500,000 less than their agreed control totals. One trust, Sandwell and West Birmingham Hospitals, reported an extra £5m surplus following an impairment adjustment.