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New report reveals twice as many trusts in year-end deficit despite £4 billion national surplus

Some PCTs are still struggling with overspends in the run up to handing over to CCGs – despite the NHS having an overall surplus of £4billion, a new report reveals.


The report from the Audit Commission also reveals more than twice as many hospital trusts and PCTs were in deficit at the end of the 2011-12 than the previous year – 34 against 15.


The report, published last week, shows NHS bodies underspent by £2billion – two per cent of the NHS budget – in 2011-12 alone, contributing to £4billion of  ‘uncommitted’ finances.


PCTs cleared £33million of legacy debt over the financial year, leaving £21million outstanding which rests with Peterborough and Cambridge PCTs.


Three PCTs failed to achieve financial balance in the financial year 2011-12. Barnet, Enfield and Haringey PCTs – all part of the North Central London PCT Cluster – all had a combined overspend of £48.6million.


Two other PCTs in the cluster, Camden and Islington, reported overspends totalling £64million – larger than required to balance the books, according to the report which questioned the ‘potential level of healthcare foregone’ in PCTs with significant underspends.


Overall, the savings programmes had had no material effect on the numbers of front-line staff, the report said, although the number of managerial and administrative staff had fallen significantly.


The Audit Commission warned of the dangers facing CCGs: “(The NHS) will need to continue to keep a tight grip on finances in the coming years and to avoid significant increases in activity, as it did in 2011/12. As staff costs account for the majority of expenditure in trusts, NHS bodies will also continue to have to make tough decisions about pay awards.’


Andy McKeon, managing director of health at the Audit Commission, said: ‘Overall, a combination of underspend, surpluses and non-recurrent spending in 2011/12 have given the NHS approaching £4 billion in uncommitted finances, providing financial room for manoeuvre in the future.


‘The NHS has also delivered the first tranche of its £20 billion savings required by 2014/15. While nationally the NHS appears to be managing well financially, and preparing itself for the changes and challenges ahead, a number of PCTs and trusts are facing severe financial problems. The Department of Health and other relevant national authorities need to focus their attention on the minority of organisations whose financial position is deteriorating, and o