Today HM Treasury published all departments’ Supplementary Supply Estimates. This is a routine opportunity in the financial year for departments to complete any housekeeping around their budgets and ask the Treasury for minor changes to funding.
There are two main changes for the Department of Health:
£205million revenue funding transfer from HM Treasury reserve. This funding will cover small non-NHS pressures, mainly relating to reduced income from the Prescription Pricing Regulation Scheme (PPRS).
This is equivalent to less than one day of spending within the NHS. It is not related to NHS providers or hospital deficits, who will continue to manage down deficits by implementing the cost-control measures we have introduced, like clamping down on agency spend, while continuing to improve productivity and reduce waste.
The £205million will fund minor central pressures, mostly relating to a small shortfall in our estimate of returns made by the PPRS scheme. We have to forecast spend based on early growth estimates of the rebate paid to the NHS, however several companies have opted out of the voluntary schemes since these forecasts were made.
DH officials are looking closely at the scheme in order to determine if there are ways of making forecasts of this kind more accurate.
£950million transfer to the revenue budget from the capital budget. This utilises savings identified in capital programmes across the DH group to mitigate pressures in the NHS provider sector.
Patients would expect the NHS to use unspent money on frontline services wherever possible.
To manage the overall position, we have looked at all areas of revenue and capital spend and where savings have been identified we have taken the opportunity to re-prioritise some spending to support frontline services.
The savings to fund the transfer to revenue would have always been made, but we’ve been able to identify and agree these savings earlier than usual, which has allowed us to make this switch at this moment in the financial year.
The Department’s revenue budget has increased by an additional £43 million due to transfers between other government departments. These are routine and do not affect the Government’s commitment to increase the NHS budget in real terms.
A Department of Health spokesperson said:
The supplementary estimate is an opportunity for all government departments to refine their budgets for the financial year and it is not unusual to ask the Treasury for minor changes to funding. In our case a small addition has been approved for a non-NHS pressure – because income from the PPRS was smaller than originally forecast.
This government is committed to the values of the NHS, which is why we’re investing £10bn in its own plan for the future and will continue to help hospitals improve their finances with tough controls on spending.
Additional funding has been approved to meet specific central pressures, mainly relating to reduced PPRS income, which have arisen since the departmental budgets were approved at the beginning of the financial year.
The funding is not related to NHS providers, who will continue to manage down deficits by implementing the cost-control measures we have introduced, like clamping down on agency spend, while continuing to improve productivity and reduce waste.
The supplementary estimate can be viewed here: https://www.gov.uk/government/publications/supplementary-estimates-2015-16