Government claws back £500 million from the NHS to aid deficit reduction

Detailed analysis of the 2012 Budget by the health think tank Nuffield Trust reveals that the Treasury will retain £500 million of a £900 million underspend on health this year.

Press release

Published: 24/03/2012

Detailed analysis of the 2012 Budget by the health think tank Nuffield Trust reveals that the Treasury will retain £500 million of a £900 million underspend on health this year.

Commenting, Nuffield Trust Chief Economist Anita Charlesworth said:

‘Although a number of NHS Trusts are in deficit, the NHS is projecting a healthy surplus and the health budget as a whole is forecast to underspend by £900 million.

‘The argument for front loading efficiency plans was to generate money to reinvest in transforming services so that they would be sustainable in later years as the impact of constrained funding started to bite.

‘Instead it seems that £500 million of the savings are not going to be reinvested in new models of service delivery but will instead be channelled towards central Government deficit reduction.’

Notes to editors

At the time of the 2010 Spending Review, the Government committed itself to spending £105.9 billion on health in England during the year 2011-12. In Budget 2012 that total is now £900 million less, at £105 billion.

Some of these savings arise from underspend on capital as a result of policy decisions around NHS IT. £400 million has been added to health spending plans for 2012-13, implying that the Treasury is keeping back £500 million.

The figures are sourced from HM Treasury’s Spending Review 2010: chapter on departmental settlements (see table 2.2 p.43) and from Budget 2012: chapter on Budget policy decisions (see table 2.4 on p.55)

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