NHS finances on the brink

NHS finances on the brink Is the spectre of an NHS – and Department of Health – overspend once again haunting the corridors of power?

It was not supposed to. Back in December 2015, NHS Planning Guidance established two firewalls to prevent this. The first was the £1.8 billion Sustainability and Transformation Fund (STF), which aimed to reduce the net NHS provider deficit to zero. The second was a 1 per cent topslice of NHS commissioner budgets, which created an £800 million contingency to be used to mop up any remaining overspends. Concern back then was less about 2016/17 and more about the years to follow when the growth in NHS spending was (and still is) expected to flatline.

However, both firewalls are looking shaky. On the provider side, the target net deficit has drifted up over the year, from £250 million at the time of the NHS financial reset to £580 million. We will find out the position at the end of Quarter 3 when NHS Improvement publishes its latest update next week, but their chief executive, Jim Mackey, has already confirmed that the £580 million target will not be met. The King's Fund