20 / 12 / 2016
Department of health, Departmental Overview 2015/16
National Audit Office, November 2016
This report from the National Audit Office provides an overview of the Department of Health’s performance for the year ending March 2016. The Department of Health (DH) has to reduce its budget by a third by 2020. This, coupled with strong financial and demand pressures on the NHS budget, meant that 2015/16 was a challenging year for DH.
- The new operating model will be implemented through its ‘change programme’.
- The number of directorates has been reduced from seven to four.
- Monitor and the Trust Development Authority merged to become NHS Improvement in April 2016
- Most CCGs took on extra responsibility for commissioning of primary care services from NHS England
- The Health and Social Care Information Centre changed its name to NHS Digital in April 2016.
DH is accountable for all expenditure, including that of the arm’s length bodies and NHS trusts and foundation trusts. The total 2015/16 budget was £149.5bn. The 2015 spending review increased NHS England funding by £19bn between 2015/16 and 2020/21, with the majority being front loaded at the beginning of the parliament, in order for the NHS to implement its Five Year Forward View. However this settlement relies on the NHS seeing £22bn worth of efficiency savings over the same period.
The comptroller and auditor general took the unusual step of producing a report on the DH accounts this year, due to the scale of the challenges the department is facing. In 2015/16 DH kept within its revenue budget (RDEL) of £114.7bn by £210m, and its capital budget (CDEL) of £3.6bn by £58m. These margins, although better than last year, are still “wafer-thin”, and the RDEL budget was only met due to an extra £417m in National Insurance payments that were provided to DH by the HMRC. The Treasury were not made aware of these extra payments, which was described as an “administrative error” and goes against well-established practice.
The NAO also state that the DH undertook a number of actions in 2015/16 to stay within budget:
- £950m was moved from capital to revenue budgets
- NHS trusts and foundation trusts saw a deficit of £2.45bn
- NHS England underspent by £599m, which is unlikely to occur in 2016/17
With demand continuing to grow, the performance of the NHS on some key indicators slipped, including cancer referral to treatment (RTT) and ambulance response times.
- In April 2015 new access and waiting time standards were implemented for mental health services.
- The 95 percent, four hour A&E target was missed nationally in every quarter during 2015/16
- Avoidable mortality rates have stayed steady since 2012
- Between March and August NHS England missed its 92 percent cancer RTT target
- The amount of bed days lost from delayed transfers of care from acute sectors continued to rise in 15/16.
- In 2015/16 acute trusts’ financial situation deteriorated sharply, and it is now almost normal for trusts to run a deficit
- The NAO say specialist services are an “ongoing risk to NHS financial stability”. Spending has risen more sharply than other parts of the NHS and NHS England does not have “consistent information from all providers”
- The Cancer Drug Fund increase by 138 percent between March 2013 and 2015.
- Bridging the £22bn funding gap will be a challenge, with £14.9bn worth of savings expected to come from providers
- DH and NHS England will have to focus on the implications of Brexit on workforce, recovering the cost of treatment abroad, and regulations including the working time directive, procurement and competition and regulation of devices and medicines.