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NHS Deficits

I want to make some progress, so I will not give way. We are 19 days away from the end of what I accept, and what everyone in the Department would acknowledge, has been a difficult year for the national health service. Painful decisions have been made, but it is clear to us that the NHS will be stronger as a result. The NHS has grasped the nettle on overspending, which has been tolerated for far too long. Despite that, and despite us having brought more rigour to the health service’s financial system, key financial objectives will be met this year, and I will mention those in a moment. Key service standards will not be jeopardised, and as a result of the action taken, the NHS is in a much firmer position for the next financial year. It is building on a much stronger platform as a result of the changes made. Let me remind the House of the three clear objectives that my right hon. Friend the Secretary of State set for the national health service this year. The first is to deliver a net financial balance across the NHS as a whole by 31 March 2007, the second is to ensure an improvement in the financial performance of all organisations that reported a deficit in 2005-06, and the third is to achieve recurrent monthly run rate balances across as many organisations as possible by the end of the financial year. As we reported in our third quarterly report on NHS finances, the NHS has made considerable progress in delivering against each of our key financial objectives, and it remains firmly on course to end the year in net financial balance. In fact, taking account of the £450 million in savings that strategic health authorities have identified, overall, the NHS forecasts a year-end surplus of £13 million at the end of the third quarter of the year. On the in-year position for this financial year, when the impact of deductions for prior overspending is ignored, the NHS forecasts an in-year surplus of some £269 million. That is a remarkable achievement, and it bears witness to the hard work of NHS staff across the country who have sought to deliver savings, increase the efficiency of working practices, and reduce deficits.