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Department of Health spend on non-NHS providers increased by 5% last year

The Government’s spend on purchasing healthcare from non-NHS bodies rose by 4.8% in 2016/17 compared with the previous year.

The annual accounts from the Department of Health revealed that the amount grew by almost £630m, from £13.08bn in 2015/16 to £13.70bn in the financial year ending 30 March.

At the same time, DH spend on GP contracts (including GMS, PMS and APMS) grew by 2.3% - or £175m - from £7.76bn to to 7.94bn.

This was higher than the overall expenditure increase across DH, which was 1.5%, from £50.06bn in 2015/16 to 50.80bn in 2016/17.

The accounts also reflect a move of £1.2bn from the DH's capital budget to its revenue budgets, which the auditor general warned would 'have implications for the resilience of the service'.

They explain this was linked directly to the expected rise in NHS Resolution costs of clinical negligence payouts on behalf of NHS trusts following the discount rate reduction in March.

The accounts said that on the whole, the DH had lived within its budget controls, but it added that 'difficulties in getting the NHS’ finances on a stable footing have been publicly acknowledged' and 'there remains much to do'.

DH permanent secretary Sir Chris Wormald said the year had been 'challenging for the health and care system' with the NHS treating 'more people than ever before'. But he said 'the system has risen to the challenge' seeing 'an overall return to financial balance in 2016/17'.

He went on to warn that the 'improvement in financial discipline during 2016/17' has 'set the direction of travel which the health and care system will need to adhere to over the coming years', adding that alongside its 'considerable' challenges, the DH has 'seen the quality and safety of care remain stable for patients'.

But Sir Amyas Morse, comptroller and Auditor General, said: 'The health system’s ability to invest in infrastructure and maintain its asset base continues to be affected by the use of capital budgets to support day to day spending and this will have implications for the resilience of the service.'

Other information within the accounts includes:

  • The DH has somewhat improved its collection of payments from other EU states for treatment of their citizens. In 2016/17, the DH collected £86.07m, compared to £58.57m the previous year.
  • Income from chargeable overseas patients also increased somewhat, from £69.25m to £81.40m.
  • Health minister Phillip Dunne’s brother-in-law is the CEO of Serco PLC, from which the DH purchased services worth nearly £4m last year.
  • The husband of Dame Sally Davies, the Chief Medical Officer, is an employee at the University of Cambridge, from which the DH purchased services worth just over £7m.

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