News / Q3 figures show growing FT surplus

The 2007/08 quarter three figures from Monitor show an increase in aggregate income, a higher total surplus and greater cash balances. In the nine months to the end of December, 83 NHS foundation trusts generated a net surplus of £376m, £199m ahead of plan. This was after paying £255m in public dividend capital dividends but before exceptional charges of £11m.

The trusts’ aggregate cash balance was £1.89bn, up from £1.53bn at the end of quarter two, when there were 73 foundations. Monitor added that foundations’ continued improvements in efficiency and productivity could be seen in their EBITDA (earnings before interest, tax, depreciation and amortisation) margin. At the end of quarter three it stood at 8.1% against a plan of 6.9%.

Most foundation trusts achieved a surplus in the year to date – 81 of the 83 authorised at the end of December. The strong financial position was reflected in trusts’ financial risk ratings – none has a risk rating of less than 3 and the average is 4.2 – up from an average of 4 in the first six months of the year and 3.8 in foundations’ annual plans for 2007/08.

Finances in the non-foundation sector also improved. As trailed in February’s Healthcare Finance (‘Department confident current forecasts are accurate’, page 2), the rest of the NHS in England is on track for a £1.8bn surplus at the end of 2007/08. According to quarter three figures from the Department of Health, the forecast underspend is the same as the quarter two figure, £1.8bn.

There was an improvement in the gross deficit, now expected to be £143m. At the end of 2006/07 it stood at £917m and was forecast to be £201m at the end of quarter two.

NHS chief executive David Nicholson said: ‘Not only does this show the NHS now has a strong and sustainable financial position, but also, importantly, it shows we remain on course to deliver against our key pledges.’

Writing in the Department’s review of the quarter, director general for NHS finance, performance and operations David Flory urged the service to focus on achieving the £1.8bn surplus.

‘Delivering a surplus is a crucial part of our financial strategy and essential for creating the capacity to invest in future,’ he added.