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DH to hand over billions of pounds underspend to Treasury

Exclusive Ministers plan to hand back a £2.2bn Department of Health underspend to the Treasury this year, almost double the amount it returned to help plug the UK’s financial deficit last year.

Department of Health accounts for 2012/13 reveal that the underspend will be returned to the Treasury’s coffers in the light of an ‘unprecedented’ fiscal challenge, and following an underspend of over £1.4bn similarly handed back last year.

But the GPC said it was ‘amazed’ that healthcare funding was being redistributed in this way while doctors are struggling to meet patients’ needs.

The accounts reveal an underspend against the revenue department expenditure budget of £1.5bn and an underspend against the capital department expenditure budget of just over £700m, resulting in a total underspend of £2.2bn, or 2% of the budget overall.

The total underspend was higher than the 1.5% that the DH has previously told the House of Commons Health Committee was a ‘prudent’ level of underspend, and comes as the committee advised the Government to reverse its ‘inflexible’ policies with regards to carrying over surplus funds in March this year.

The move is a repeat of last year, when the Government attracted controversy by returning a £1.4bn DH underspend to its main coffers.

The document said: ‘Like other Government departments, DH’s underspend will be returned to HMT and this will help in wider fiscal deficit reduction during this unprecedented period of fiscal challenge.’

However, the DH explained that although the underspend is handed back to the Treasury now, the DH is committed to ensuring that any underspend of the ring-fenced NHS budget is reinvested in the service over the coming years.

A DH spokesperson said: ‘Any NHS underspend will still be available for NHS organisations to ensure high quality, sustainable health services are delivered to patients now and in the future.’

But GPC deputy chair Dr Richard Vautrey said the move undermined the Government’s promise to increase NHS funding.

He said: ‘It is amazing that DH is prepared to repeatedly take this funding away from patient care when not only general practice but the whole of the NHS is under massive workload pressure and struggling to meet patients’ need.

‘They can no longer say they have increased NHS funding when they take billions of pounds out of the budget in this regular way.

This article was changed at 18.33pm on 22 August to reflect further clarification from the Department of Health