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NHS surplus 'good use of resources' say watchdogs

By Gareth Iacobucci

The NHS's £1.67 billion surplus for 2007/08 reflects good use of resources rather than a failure to deliver frontline services, according to joint report from two public spending watchdogs.

The Audit Commission and the National Audit Office admitted that the surplus was substantially higher than the original forecast of £916 million, and more than three times the amount recorded in 2006-07 (£515 million).

But the report insisted it had been achieved through ‘good use of resources rather than a failure to deliver healthcare'.

The study highlighted the Department of Health's commitment that the NHS will be able to spend the surplus in future years.

However, it admitted the Department's intention is that the surplus should be retained at the same level for 2008-09, and that funds generated in 2007-08 are not planned to be spent until at least 2009-10.

In 2007-08 only 3 per cent of NHS trusts reported a deficit, compared with 22 per cent in 2006-07.

SHAs reported a surplus of £903 million, PCTs a surplus of £391 million and NHS trusts a surplus of £380 million.

This is a key change from 2006-07, which saw the PCT and NHS trust sectors still in deficit overall.

The report found that capital underspend in 2007-08 was 22 per cent (£521 million) compared to a 43 per cent underspend in 2005-06, and a 40 per cent underspend in 2006-07.

Steve Bundred, chief executive of the Audit Commission, said: ‘The organisations in the NHS are performing better financially and this surplus has created an element of certainty for financial planning that has not existed in recent years. This is especially reassuring given current financial pressures throughout the economy.

Tim Burr, head of the National Audit Office, said: ‘The surplus was generated through good financial management: NHS bodies delivered more cost savings than expected while still delivering against targets and improving the quality of healthcare.

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