The NHS budget: Five things we've learned


The NHS budget is under the microscope like never before. The coalition may have protected it, but that has not stopped problems mounting.

Earlier this week a host of medical organisations wrote a letter to The Times warning the NHS was "creaking at the seams".

The Nuffield Trust think-tank has now published what is probably the most in-depth look at finances in recent times.

The headline warning is that health care leaders fear the NHS may stop being free at the point of use within a decade. But the report reveals much more than that.

line break
The piggy bank is being raided
Piggy bank

Much of the focus is on the deficits being run up by hospitals. That is understandable - they are the public face of the health service.

But the accounts of the bodies that control the overall £100bn-plus health budget - NHS England and the GP-led clinical commissioning group - are more revealing.

They finished 2013-14 just over £250m in surplus, but that was only because they took nearly £400m from their reserves. There is now less than £800m stashed away. The room for manoeuvre is getting tight.

line break
Hospitals have Stafford on their mind
Nurses on a ward The guidelines say there must be enough nurses to give patients the assistance they need

Following the public inquiry into the Stafford Hospital scandal, a popular saying has developed among hospital bosses: it is better to be hung for finances than the quality of care.

The Nuffield Trust reports shows they have been as good as their word.

Last year saw a rise in the number of staff employed by hospitals by 18,000 - a 1.6% increase in total. Foundation trusts - the top performing organisations - spent an extra £1.2bn alone - £660m more than planned.

line break
The NHS is off the pace
Athlete laying down

Next year will see the NHS come to the end of a five-year £20bn productivity drive. The challenge was for the health service to make efficiency savings of about 4% a year.

This is something it had never achieved before, but the health service rose to the challenge. Initially at least.

In the first couple of years it was on target - largely because of wage freezes - but 2013-14 could be the year it started to unravel.

Managers reported productivity gains of £1.7bn - about half of what they should have.

line break
The revolution hasn't happened

The answer to the rise in long-term conditions, such as diabetes and heart disease, which account for 70% of the NHS budget, is to shift care out of hospital and into the community.

The theory is that this is more efficient and more likely to help people keep well and independent.

But there appears to be little progress. Both emergency admissions and outpatient appointments are up and hospital spending still accounts for over half the NHS budget.

line break
There is a great divide
Hand holding coins

It is clear from wading through the NHS accounts over the past few years that when it comes to hospitals there are the haves and the have nots.

The largest trusts - often the big city hospitals - remain in the healthiest position financially.

Take 2012-13, for example, the 27 biggest trusts posted a surplus of nearly £200m, but that was cancelled out by the smaller and medium-sized trusts.

It raises question marks over the future of a whole network of district general hospitals that seem to be struggling to attract enough patients to remain viable.

Nick Triggle Article written by Nick Triggle Nick Triggle Health correspondent

Savile: Why the risks are real in today's NHS

Jimmy Savile's abuse on NHS premises spanned 44 sites. Most of the cases were decades ago, but how safe is the health service now?

Read full article


This entry is now closed for comments

Jump to comments pagination
  • rate this

    Comment number 263.

    CO @256
    'NHS only glimpsed'
    "universal standards still hold
    a unity of purpose"
    Under stress. Perhaps amongst some of young it is ever so. Exhaustion & 'headwinds' make survival soon a priority: to cope 'despite everything', find a niche & dig-in. Overloaded, exploited, assailed by nonsense & hypocrisy & treachery, ideals twisted to expectations as defeats mount. God not mocked, but...

  • rate this

    Comment number 262.

    The CAUSE of all the NHS problems is the gigantic mountain of debt and the idiotic service contracts under PFI & its predecessor.

    The crooks in the City of London are closing your hospital and it is all perfectly legal as they got the laws re-written so that all forms of banking skulduggery are just fine and dandy.

    Remember this when your relation dies on a trolley.

  • rate this

    Comment number 261.

    Just to add - (i) the NHS is internationally recognised as an extremely cost-efficient health service; (ii) we spend considerably less on healthcare compared with equivalent economies eg France; Germany,as a proportion of GDP;(iii) it follows that we could spend more on the Service;not necessarily by increasing taxation but by diverting money eg do we really need that aircraft(less) carrier?

  • rate this

    Comment number 260.

    What this article misses is the political context ie public expenditure priorities.Our health and the NHS supersede all other demands on taxpayers' money.Sadly,this government only sees it as a cash milchcow for its private sector Party funders.
    Meantime,can Nick Triggle please demonstrate some wider knowledge of the Service rather than just regurgitating press reports and right-wing propaganda?

  • rate this

    Comment number 259.


    We're talking about a health service here. What is "over usage" (how can this be determined prior to a medical assessment), and should we "deter" it (how, without detering "legitimate" use)?

    Last question: Is that cost effective in today's litigious society?


Comments 5 of 263



  • Kim Jong-ilKorean kidnap

    The film stars abducted by North Korea and forced to make movies

  • TabletFeeling flat

    Are tablets losing their appeal?

  • scarlett Johansson7 days quiz

    Did someone try to impersonate Scarlett on the red carpet?

  • Woman reading on subwayCover shots Watch

    The disappearing books of the New York city subway

  • llamasLlama drama

    Two unlikely fugitives go on the run in Arizona

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.