25 / 07 / 2017
Annual Report and Accounts 2016-17
Department of Health, July 2017
The Department of Health (DH) is required to publish financial accounts each year, including a summary of its performance. The most recent version
for the financial year 2016/17 have now been laid before parliament and published externally.
The report shows that the Department underspent their revenue budget last year by £563 million, which is 0.5 per cent of the total budget. This contrasts with overspending of £207 million in 2015/16 and just about balancing the budget in 2014/15. The Department was rebuked by the National Audit Office for last year’s position and an explanatory note from the NAO attached to this year’s accounts suggests there is still “some way to go to achieve financial sustainability”.
The financial position of the arms-length bodies was varied, although most organisations managed to remain in budget. The main areas of variance were from European Economic Area medical costs (£155 million spent more than expected), the Pharmaceutical Price Regulation Scheme (£128 million less income than expected) and NHS Property Services (£69 million less income than expected).
As expected, NHS England spending as a proportion of the total Department budget continues to increase and now sits at 90 per cent. CCG overspend was £600 million and this was offset by underspending in specialised and other direct commissioning. The aggregate provider position has already been published by NHS Improvement and is confirmed in this report at around £791 million. The report does show that 228 providers agreed a control total in 2016/17 and of these 178 equalled or exceeded what they agreed. These trusts produced an overall surplus of £39 million, compared to the 50 trusts not meeting their control totals with an aggregate deficit of £760 million or those 10 trusts not agreeing control totals with a total deficit of £189 million.
Spending on Independent Sector Providers was £9 billion last year, compared to £8.8 billion the previous year. This means the percentage of total spending on private providers remains the same at 7.7 per cent. Spending on non-NHS providers has increased slightly from 10.7 per cent to 10.9 per cent, but this also includes spending on voluntary providers and local authorities.
The Department’s capital budget has reduced further to £4.6 billion, which compares to £4.7 billion last year and a £5.8 billion budget in 2010/11. Spending against the capital budget had a £60 million underspend last year or around 1.3 per cent of the budget, which is broadly similar to the £58 million underspend in recent years. The Department’s report confirms that £1.2 billion was transferred from the capital budget for use as revenue spending. Administration spending at the centre continues to decrease at £2.3 billion, down from £2.4 billion the previous year and £3.3 billion in 2010/11.