NHS has a hidden £3bn overspend, says think tank

THE “eye-watering” scale of overspending in NHS hospitals last year has been masked by official accounts, it has been alleged.

According to The Nuffield Trust, health chiefs spent almost £3 billion more than they reported, although the trust did note there had been progress in bringing down deficits.

A review by the think tank of costs among NHS hospitals and ambulance trusts in 2016-17 found an underlying overspend of £3.7 billion, far higher than the £791million declared.

Given a £2.45 billion official overspend the previous year, the new figures had been welcomed as evidence that managers were bringing costs under control.

But the new report found the oneyear improvement owed more to “unrepeatable accounting manoeuvres” than “real-world restraint”.

The analysis also predicts NHS managers will be hit with £2.2billion in unfunded inflation in 2017-18, half a billion higher than was planned. The Nuffield Trust says this alone means hospitals and ambulance services will have to cut operating costs this year by £3.6billion.

Sally Gainsbury, a 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 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 the financial challenge facing the NHS and it is eye-watering.”

The think tank believes that without more cash, hospitals and other facilities will still be £2billion in the red in 2021.

Chris Hopson, chief executive of NHS Providers, insisted that last year’s figures reflect genuine progress – particularly in areas such as bringing down agency staff costs – but conceded that “the underlying scale of the challenge that trusts face remains unsustainable”.