Hospitals overspent by almost £4billion

NHS hospitals spent nearly £4billion too much in the last financial year – almost £3billion more than reported in their official accounts, a report claims.

The Nuffield Trust’s analysis of accounts and financial data published by NHS regulators found an overspend of £3.7billion for the year ending in March, compared with the £791million reported.

The health think-tank said the reported figure had been ‘flattered’ by billions of pounds of one-off savings and temporary extra funding. These accountancy fixes ‘mask continued serious difficulties’ in front-line health services including hospital, specialist, community and mental health care, the authors wrote.

They added: ‘Those organisations consume over two-thirds of the Department of Health’s total spending, so when they catch cold, the rest of the NHS does too.’

Sally Gainsbury, senior policy analyst at the Nuffield Trust, said: ‘The official figures on NHS deficits don’t reflect how severe things are for hospitals in england, as the deficits reported include one-off funding

‘The challenge is eye-watering’

boosts or savings that cannot be repeated the following year. Only by looking at the deficit after these have been stripped out can we see the scale of financial challenge facing the NHS – and it is eye-watering.’

She added: ‘Increasing funding to wipe out these deficits and fund much-needed reform in the NHS is entirely possible and wouldn’t even increase the proportion of our country’s wealth spent on healthcare.

‘Our hospitals are undoubtedly in financial crisis. But the solution to that crisis is not beyond the reach of the public purse.’

Jim Mackey, chief executive of NHS Improvement, which is responsible for health finance, said the NHS is currently on track to hit its budget because hospitals have agreed to tighten their belts.

Companies have made profits of £831million in six years through private finance initiative schemes locking the NHS into hospital-building contracts that do not give value for money, according to the Centre for Health and the Public Interest.

The think-tank said if the NHS had not had to pay profits on PFI schemes, hospital deficits would have been 25 per cent lower for the period from 2010 to 2015.