NHS surplus prompts health funding row

A political row broke out over health funding as the National Health Service forecast a £1.75bn surplus for the current financial year.

The Department of Health said the predicted surplus, based on financial performance for the three months to June, would “stay within the NHS to improve patient care”, adding “this is an excellent start to the year”.

The results mark a significant turnround for the health service in the two years since it recorded a £547m deficit. Only five trusts were in operating deficit for the first quarter of this year, compared with 82 in 2006-07, officials said.

But opposition parties questioned the rationale of the NHS amassing cash at a time when access to drugs and treatments is still being rationed.

“There continue to be hospitals where funds are far from stable,” said Andrew Lansley, the shadow health secretary. “The government should explain why money voted in by parliament for healthcare is not being used to make sure patients get the medical treatments that they need.”

Norman Lamb, the Liberal Democrats’ health spokesman, told the FT that a massive NHS surplus was not “something that should necessarily be celebrated”.

“We seem to have gone from bust to boom,” Mr Lamb said. He warned that payment by results was leading to “distortions in the way NHS funding is being allocated”.

The government and Tories traded blows over how the £90bn-plus annual budget for the NHS should best be spent.

Mr Lansley criticised the decision by the NHS to use measures of deprivation, as well as age, to determine the health needs of different geographic areas. This approach was leading to relatively “greater resources for poorer areas and less for areas that are less deprived and more elderly despite age being a more significant determinant of the relative burden of disease”, Mr Lansley said in a speech to the Reform think-tank.

Labour responded by accusing the Tories of planning to “cut health spending in poorer areas”. The opposition party “would take funding from NHS services that need it most”. said Ann Keen, health minister.

But Mr Lansley hit back, telling the FT: “Public health money should be spent where health outcomes are worst, so that money will go to where the need is greatest. Do Labour really have a problem with that?”

The Lib Dems said a hybrid approach was needed, with public health funding – such as campaigns to tackle obesity and smoking – targeted on the most deprived areas, and funding for combating diseases linked to areas where the demand was highest.


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