Our response to the Department of Health’s annual accounts

The Department of Health today published its accounts for 2016/17.

• The DH underspent its Revenue Departmental Expenditure Limit (RDEL) by £563m in 2016/17. This follows an overspend in 2015/16.
• NHS capital spending, intended for long-term investments such as buildings and equipment, has fallen for the third year in a row.
• This is due to transfers from the capital budget to the resource budget to deal with day to day financial pressures.

Anita Charlesworth, Director of Research and Economics at the Health Foundation, said:

‘The Department of Health has balanced its books and re-established financial control, despite sustained pressure across England’s health service. The annual accounts show that financial control has come at a price. Despite primary care being a priority, last year spending on GP services fell as a share of the health budget and the number of GPs working in the NHS declined.

‘Capital spending has fallen for the third year in a row, with funds being transferred to cover very real day to day financial pressures. £1.2bn was transferred from the capital budget to meet day to day running costs, and capital spending in the NHS has fallen by more than 20% in real terms over the last three years. Without access to sufficient capital funding the NHS now has an estimated £5bn backlog maintenance bill.   

‘The Five Year Forward View sets out how the NHS plans to improve and transform services for patients, providing care closer to home. But financial pressures will make it harder and harder to deliver on that vision.

‘The financial outlook for the next few years is incredibly tough – funding per person will fall in both 2018/19 and 2019/20 under current spending plans. The acute financial pressures facing the NHS mean that it is difficult to see how the government can deliver on its commitments to deliver parity of esteem for mental health, improve primary care and transform health services for patients across the country. 

‘Before the election the government committed to additional capital funding and an increase in spending on day to day running costs. Additional investment will be vital if the NHS is to deliver on its vision to improve and transform services for patients.’

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Media contact

Jack Cutforth
jack.cutforth@health.org.uk
0207 664 4623