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NHS: Finance

Department of Health written question – answered on 9th November 2016.

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Photo of Baroness Shephard of Northwold Baroness Shephard of Northwold Conservative

To ask Her Majesty’s Government why NHS England have told commissioners that they cannot utilise non-recurrent reserves held in their funding allocation to mitigate future potential risks; and what are the reasons for putting commissioners into financial turnaround processes when they have sufficient reserves available to them to maintain their financial duties.

Photo of Lord Prior of Brampton Lord Prior of Brampton The Parliamentary Under-Secretary of State, Department of Health

The National Health Service leadership bodies have set out their own plan for delivering financial sustainability for the NHS, in the Five Year Forward View (October 2014) and Strengthening Financial Performance and Accountability in 2016/17 document (July 2016), a copy of which is attached.

It is clear that there is a significant financial challenge across the NHS, due to the increasing demand for health services as a consequence of the ageing and growing population, new drugs and treatments and safer staffing requirements. This is why we are investing the additional £10 billion the NHS has said it needs to implement its own plan for the future.

It is absolutely sensible for reserves to be created as part of this plan, to help deliver financial sustainability and insulate the global health economy from financial risk. Decisions must be made at a macro level on the best and most efficient use of resources, to maximise benefit to front-line healthcare services.

All clinical commissioning groups (CCGs) must comply with a financial framework, devised to support the delivery of this plan. Any CCG not doing so, will be required to devise a financial recovery plan as part of measures to improve the financial performance of that organisation.

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