NHS deficit may have reached one billion pounds - Annette Brooke MP

12.00.00am BST (GMT +0100) Wed 7th Jun 2006

Local MP Annette Brooke responded to the National Audit Office report on the financial management of the NHS today:

"The NHS was a quarter of a billion pounds in deficit in 2004-05. The outlook for the following year is even worse. The early indication is that the cumulative deficit for NHS Trusts at the end of March 2006 is in the region of a staggering one billion pounds. Many parts of the NHS are living within their means; this suggests that those that are not must bear at least some of the blame for their overspending.

"This is poor financial management. But the burgeoning initiatives from central government also bear part of the responsibility. The new General Medical Services contract, for example, has turned out to cost almost £300 million more than expected for 2004-05. It is imperative that the NHS regain its financial balance but there is no getting around the fact that in many cases NHS patients and staff will suffer as a result.

"An alarming conclusion of this report is that scant reliance can be placed on the unaudited accounts which turned out to be sorely optimistic. The unaudited accounts for 2004-05 suggested a total deficit of £133.9 million. The final audited accounts reveal that the figure was actually £251.2 million, nearly twice as much. And, during the year, the Department's forecasts for the 2005-06 deficit have varied from £623 million to £536 million. This shows that parts of the NHS simply have little idea how much they have spent or are going to spend which makes proper financial management impossible. It also means we cannot trust the latest figures for 2005-06. The situation may be even worse."

ENDS

Notes to Editors:

National Audit Office report: Financial Management in the NHS 2004-05

Annette Brooke MP is a member of the Public Accounts Committee