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Underlying NHS deficit '£3bn higher' than official headline estimate

1 min read

One-off funding injections and accountancy changes meant NHS England’s underlying deficit last year was almost £3bn higher than the official estimate, new research has found. 

The Nuffield Trust said the headline statistics from NHS Improvement “masked continued serious difficulties” in England’s hospitals, with the funding squeeze set to get worse as a result of higher inflation projections.

The thinktank said the deficit of £791m for 2016/17 published by the NHS was “flattered” and that the underlying figure was £3.7bn.

The factors contributing to the difference were £300m from bookkeeping changes, £1.8bn from the emergency sustainability fund, and £790m of non-recurrent savings.

“The official figures on NHS deficits don’t reflect how severe things are for hospitals in England, as the deficits reported include one-off funding boosts or savings that cannot be repeated the following year,” said Sally Gainsbury, a senior policy analyst at the Nuffield Trust and author of the report.

“Only by looking at the deficit after these have been stripped out can we see the scale of financial challenge facing the NHS – and it is eye-watering.”

That still reflected £2.3bn in permanent savings, the Trust said, as hospitals brought down the deficit from £4.3bn in 2015/16 while costs rose.

Higher inflation is expected to bite in the current financial year, with costs going up by £2.2bn. 

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