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Treasury to order NHS to spend £1bn-plus surplus

By Gareth Iacobucci

Ministers are set to order NHS chiefs to help kickstart economic recovery by spending their financial surpluses, Pulse can reveal

Department of Health sources expect Chancellor Alastair Darling to announce trusts will be told to bring forward capital projects in his pre-budget report due later this month.

With the NHS currently running with an estimated £1.7bn surplus, those PCTs that have spare cash will be expected to accelerate spending, say insiders.

A senior DH source said: ‘It will be hard for the NHS to hold on to huge surpluses when the general message the Government is putting out is that now is the time for public spending to take up the slack in the downturn.'

David Stout, director of the PCT Network at the NHS Confederation, said funds could potentially be used to deliver existing LIFT schemes, using public money to compensate for private sector shortfall.

But he warned: ‘If you try and spend it quickly you may not spend it effectively.'

Alan Downey, UK head of healthcare at accountancy firm KPMG, said PCTs would be ‘nervous' about spending too much surplus in the next financial year.

He said: ‘PCTs are worried about later years. They might not respond as enthusiastically as you might think to being told to go out and spend more money.'

The King's Fund has previously predicted the Government might try to claw back overflowing health budgets, as a way of reducing debts caused by the credit crunch.

But some believe the move to bring forward capital spending might explain the delays in announcing PCT funding allocations for 2009/10, which have been held back until after Mr Darling's pre-budget report.

Department of Health: sources say writing is on the wall for PCT surpluses Writing on the wall for PCT surpluses

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