2. GENERAL EXPENDITURE ISSUES
2.2 Overall expenditure
2.2.1 Could the Department provide an
updated version of Table 2.1.1, and of the Department's commentary
which accompanied it? Could it also show this data in graphical
form? Could the Department provide a brief commentary, explaining
what expenditure is included under each section of the table?
Can the footnote to table 2.1.1 explain the measures and their
applications for lines D to G? [2.2.1]
1. Expenditure in Table 2.2.1(a)
and Figure 2.2.1(a) is shown on a Stage One Resource Budgeting
basis. Table 2.2.1(a) is consistent with the presentation of the
data in Figure 3.3(a) of the 2003 Departmental Report (CM5904)
and with the expenditure reported in table 2.1.1(a) of last years
evidence.
Table 2.2.1(a)
TRENDS IN ACTUAL AND PLANNED EXPENDITURE
ON THE HEALTH AND PERSONAL SOCIAL SERVICES 1999-2000 TO 2002-03
BY AREA OF EXPENDITURE(1)(2)(3)(4) (STAGE ONE RESOURCE BUDGETING)
| | |
| | £ million
|
|
| | 1999-2000
| 2000-01 | 2001-02
| 2002-03 |
| | |
| | estimate
|
| | outturn
| outturn | outturn
| outturn |
|
| Central Government Expenditure
National Health Service Hospitals, community health, family health (discretionary) and related services
|
| Current | |
| | |
| A. | Net spending | 34,156
| 37,298 | 41,718
| 46,177 |
| B. | Charges and receipts(5) |
1,987 | 2,250
| 2,164 | 2,378
|
| C. | Total spending | 36,143
| 39,548 | 43,882
| 48,555 |
| D. | Change over previous year in cash (%)
| | 9.4 |
11.0 | 10.6
|
| E. | Change over previous year in input unit costs (%)(6)
| | 3.9 |
5.1 | |
| F. | D adjusted for E (%) |
| 5.3 | 5.6
| |
| G. | Change over previous years in real terms (%) (total)
| | 7.0 |
8.3 | 7.4
|
| H | Change over previous years in real terms (%) (net)
| | 6.8 |
9.2 | 7.5
|
| Capital |
| A. | Net spending | 871
| 1,220 | 1,747
| 2,050 |
| B. | Charges and receipts(5) |
593 | 621
| 394 | 402
|
| C. | Total spending | 1,464
| 1,841 | 2,140
| 2,453 |
| D. | Change over previous year in cash (%)
| | 25.7 |
16.3 | 14.6
|
| E. | Change over previous year in input unit costs (%)(6)
| | 5.7 |
6.5 | |
| F. | D adjusted for E (%) |
| 18.9 | 9.2
| |
| G. | Change over previous years in real terms (%) (total)
| | 22.9 |
13.5 | 11.3
|
| National Health Service family health services
(non-discretionary)(7)
|
| Current |
| | | |
| A. | Net spending | 4,365
| 4,577 | 4,839
| 5,067 |
| B. | Charges and receipts |
804 | 845
| 887 | 919
|
| C. | Total spending | 5,168
| 5,422 | 5,726
| 5,986 |
| D. | Change over previous year in cash (%)
| | 4.9 |
5.6 | 4.5
|
| E. | Change over previous year in input unit costs (%)(6)
| | 2.7 |
2.1 | |
| F. | D adjusted for E (%) |
| 2.2 | 3.4
| |
| G. | Change over previous years in real terms (%) (total)
| | 2.6 |
3.1 | 1.5
|
|
| Departmental administration(8)
|
| Current |
| | | |
| A. | Net spending | 282
| 309 | 326
| 349 |
| B. | Charges and receipts |
29 | 14
| 21 | 24
|
| C. | Total spending | 310
| 323 | 347
| 372 |
| D. | Change over previous year in cash (%)
| | 4.2 |
7.2 | 7.4
|
| G. | Change over previous years in real terms (%) (total)
| | 1.9 |
4.7 | 4.3
|
| F. | Cost of Collecting NHS element of NI contributions
| 10 | 15
| 17 | 20
|
|
| Central health and miscellaneous services
|
| Current | |
| | |
| A. | Net spending | 504
| 521 | 618
| 677 |
| B. | Charges and receipts |
117 | 113
| 114 | 148
|
| C. | Total spending | 621
| 634 | 732
| 825 |
| D. | Change over previous year in cash (%)
| | 2.1 |
15.6 | 12.6
|
| G. | Change over previous years in real terms (%) (total)
| | -0.1 |
12.8 | 9.3
|
|
| Other NHS Capital
|
| A. | Net spending | 37
| 26 | 31
| 33 |
| B. | Charges and receipts |
3 | 4
| 0 | 6
|
| C. | Total spending | 40
| 29 | 31
| 39 |
| D. | Change over previous year in cash (%)
| | -26.4 |
5.6 | 25.0
|
| G. | Change over previous years in real terms (%) (total)
| | -28.1 |
3.1 | 21.3
|
|
| NHS Total
|
| A. | Net spending | 40,215
| 43,951 | 49,279
| 54,352 |
| B. | Charges and receipts(5) |
3,531 | 3,846
| 3,579 | 3,877
|
| C. | Total spending | 43,746
| 47,797 | 52,858
| 58,230 |
| D. | Change over previous year in cash (%)
| | 9.3 |
10.6 | 10.2
|
| E. | Change over previous year in input unit costs (%)(6)
| | 4.1 |
4.8 | |
| F. | D adjusted for E (%) |
| 5.0 | 5.6
| |
| G. | Change over previous years in real terms (%) (total)
| | 6.8 |
7.9 | 6.9
|
| H. | Change over previous years in real terms (%) (net)
| | 6.9 |
9.4 | 7.1
|
|
| Central Government Personal
|
| Social Services |
| | | |
| A. | Net spending | 34
| 40 | 90
| 195 |
| B. | Charges | 0
| 0 | 0
| 28 |
| C. | Total spending | 34
| 41 | 90
| 222 |
| D. | Change over previous year in cash (%)
| | 18.4 |
122.4 | 146.1
|
| G. | Change over previous year in real terms (%)
| | 15.8 |
117.1 | 139.0
|
|
| Central Government (specific and special) grants to local authorities
|
| A. | Net spending | 601
| 612 | 996
| 1,964 |
| B. | Charges | 0
| 0 | 0
| 0 |
| C. | Total spending | 601
| 612 | 996
| 1,964 |
| D. | Change over previous year in cash (%)
| | 1.9 |
62.6 | 97.3
|
| G. | Change over previous year in real terms (%)
| | -0.3 |
58.7 | 91.6
|
|
| Credit Approvals (LA capital)
|
| A. | Net spending | 57
| 56 | 56
| 56 |
| B. | Charges | 0
| 0 | 0
| 0 |
| C. | Total spending | 57
| 56 | 56
| 56 |
| D. | Change over previous year in cash (%)
| | -2.7 |
0.0 | 1.0
|
| G. | Change over previous year in real terms (%)
| | -4.9 |
-2.4 | -1.9
|
|
| Health and Personal Social Services Total
|
| A. | Net spending | 40,907
| 44,659 | 50,420
| 56,568 |
| B. | Charges and receipts(5) |
3,532 | 3,846
| 3,579 | 3,905
|
| C. | Total spending | 44,438
| 48,505 | 53,999
| 60,473 |
| D. | Change over previous year in cash (%)
| | 9.2 |
11.3 | 12.0
|
| G. | Change over previous years in real terms (%) (total)
| | 6.7 |
8.6 | 8.7
|
| H. | Change over previous years in real terms (%) (net)
| | 6.8 |
10.2 | 8.9
|
|
| Local Authority Personal Social Services Current(9)
|
| A. | Net spending | 10,050
| 10,696 | 11,369
| 12,622 |
| B. | Charges and receipts (10)
| 1,998 | 2,152
| 2,229 | 2,475
|
| C. | Total spending | 12,048
| 12,848 | 13,599
| 15,097 |
| D. | Change over previous year in cash (%)
| | 6.6 |
5.8 | 11.0
|
| G. | Change over previous years in real terms (%) (total)
| | 4.3 |
3.3 | 7.8
|
|
| Local Authority Personal Social Services
|
| Capital |
| | | |
| A. | Net spending | 83
| 94 | 88
| 128 |
| B. | Charges and receipts |
51 | 62
| 70 | 64
|
| C. | Total spending | 134
| 156 | 158
| 192 |
| D. | Change over previous year in cash (%)
| | 16.4 |
1.3 | 21.5
|
| G. | Change over previous years in real terms (%) (total)
| | 13.8 |
-1.2 | 18.0
|
|
| Local Authority Personal Social Services
|
| Total |
| | | |
| A. | Net spending | 10,133
| 10,790 | 11,457
| 12,750 |
| B. | Charges and receipts |
2,049 | 2,214
| 2,299 | 2,539
|
| C. | Total spending | 12,182
| 13,004 | 13,757
| 15,289 |
| D. | Change over previous year in cash (%)
| | 6.7 |
5.8 | 11.1
|
| G. | Change over previous years in real terms (%) (total)
| | 4.4 |
3.2 | 7.9
|
|
| Local Authority, Health and Personal Social Services Total(11)
|
| A. | Net spending | 50,382
| 54,781 | 60,826
| 67,297 |
| B. | Charges and receipts(5) |
5,581 | 6,060
| 5,879 | 6,444
|
| C. | Total spending | 55,963
| 60,841 | 66,705
| 73,741 |
| D. | Change over previous year in cash (%)
| | 8.7 |
9.6 | 10.5
|
| G. | Change over previous years in real terms (%) (total)
| | 6.3 |
7.0 | 7.3
|
|
| GDP deflator @ 26 June 2003
| 92.6 | 94.7
| 97.1 | 100.0
|
|
Footnotes:
1. Figures may not sum due to rounding.
2. Percentages are rounded to one decimal place.
3. Real terms growth figures differ from those given
last year because of subsequent changes in GDP deflators. Where
not otherwise specified, the figures are calculated on total expenditure
figures and therefore differ from the Departmental Report, where
increases are calculated on net expenditure.
4. The measures in changes in expenditure shown in lines
D to H are as follows:
Line D shows the percentage change in total expenditure.
Line E shows the level of inflation specific to each area of expenditure
(where applicable).
Line F shows the percentage change in total expenditure
after accounting for service specific inflation.
Line G shows the percentage change in total expenditure
after accounting for inflation in the overall economy as measured
by the GDP deflator.
Line H shows the percentage change in net expenditure after
accounting for inflation in the overall economy as measured by
the GDP deflator.
5. Includes NHS trust charges and receipts.
6. Input Cost Data is not available for years where outturn
data is not available.
7. Figures for FHS non-discretionary expenditure between
1999-2000 and 2002-03 include resources (normally funded from
FHS discretionary) to fund successive Personal Medical and Personal
Dental Service pilots.
8. Include Trading Funds—Medicines Control Agency
(MCA) and NHS Estates Agency.
9. Net budget figures are taken from Local Authority
Revenue Accounts returns.
10. Local Authorities do not forecast receipts for future
years. It is assumed that receipts for 2002-03 form the same proportion
of the net expenditure as for 2001-02.
11. Local Authority, Health and Personal Social Services total
excludes Central Government (Specific and Special) grants to Local
Authorities and Credit Approvals (LA Capital) to avoid double
counting. The total still does include an element of double counting
(unquantifiable) with regard to joint working between hospitals
and local authorities.
2. Expenditure in Table 2.2.1(b) and Figure
2.2.1(b) is shown on a Stage Two Resource Budgeting basis.
Table 2.2.1(b) is consistent with the presentation of the data
in Figure 3.3(b) of the 2003 Departmental Report (CM5904).
Table 2.2.1(b)
TRENDS IN ACTUAL AND PLANNED EXPENDITURE ON THE HEALTH
AND PERSONAL SOCIAL SERVICES 2002-03 TO 2005-06 BY AREA OF EXPENDITURE(1)(2)(3)(4)
(STAGE TWO RESOURCE BUDGETING)
| | |
| | £ million
|
| | 2002-03
| 2003-04 | 2004-05
| 2005-06 |
| | estimated
| plan | plan
| plan |
|
| Central Government Expenditure
|
| National Health Service Hospitals, community health, family health (discretionary) and related services
Current
|
| A. | Net spending(13) | 48,655
| 53,679 | 58,680
| 63,993 |
| B. | Charges and receipts(5) |
2,378 | 2,604
| 2,514 | 2,514
|
| C. | Total spending | 51,033
| 56,284 | 61,194
| 66,508 |
| D. | Change over previous year in cash (%)
| | 10.3 |
8.7 | 8.7
|
| E. | Change over previous years in real terms (%) (total)
| | 7.4 |
6.0 | 6.0
|
| F. | Change over previous years in real terms (%) (net)
| | 7.4 |
6.6 | 6.4
|
| Capital |
| A. | Net spending | 1,929
| 2,856 | 3,351
| 4,332 |
| B. | Charges and receipts(5) |
402 | 227
| 185 | 140
|
| C. | Total spending | 2,331
| 3,083 | 3,536
| 4,472 |
| D. | Change over previous year in cash (%)
| | 32.3 |
14.7 | 26.5
|
| E. | Change over previous years in real terms (%)(total)
| | 28.8 |
11.8 | 23.4
|
|
| National Health Service family health services (non-discretionary)(7)
Current
|
| A. | Net spending | 5,067
| 5,475 | 6,070
| 6,738 |
| B. | Charges and receipts |
919 | 858
| 898 | 898
|
| C. | Total spending | 5,986
| 6,333 | 6,968
| 7,636 |
| D. | Change over previous year in cash (%)
| | 5.8 |
10.0 | 9.6
|
| E. | Change over previous years in real terms (%) (total)
| | 3.0 |
7.3 | 6.9
|
|
| Departmental administration(8)(14)
|
| Current
|
| A. | Net spending | 350
| 372 | 337
| 346 |
| B. | Charges and receipts |
24 | 20
| 18 | 18
|
| C. | Total spending | 374
| 392 | 355
| 364 |
| D. | Change over previous year in cash (%)
| | 4.9 |
-9.4 | 2.5
|
| E. | Change over previous years in real terms (%) (total)
| | 2.1 |
-11.6 | 0.0
|
| Cost of Collecting NHS element of NI contributions
| 20 | 21
| 15 | 15
|
|
| Central health and miscellaneous services(15)
Current
|
| A. | Net spending | 703
| 876 | 905
| 950 |
| B. | Charges and receipts |
148 | 119
| 119 | 119
|
| C. | Total spending | 852
| 996 | 1,024
| 1,069 |
| D. | Change over previous year in cash (%)
| | 16.9 |
2.8 | 4.4
|
| E. | Change over previous years in real terms (%) (total)
| | 13.8 |
0.2 | 1.9
|
|
| Other NHS Capital
|
| A. | Net spending | 24
| 36 | 31
| 31 |
| B. | Charges and receipts |
6 | 0
| 0 | 0
|
| C. | Total spending | 30
| 36 | 31
| 31 |
| D. | Change over previous year in cash (%)
| | 20.5 |
-13.3 | -1.9
|
| E. | Change over previous years in real terms (%)(total)
| | 17.3 |
-15.5 | -4.3
|
|
| NHS Total
|
| A. | Net spending | 56,728
| 63,294 | 69,374
| 76,390 |
| B. | Charges and receipts(5) |
3,877 | 3,829
| 3,735 | 3,690
|
| C. | Total spending | 60,605
| 67,123 | 73,109
| 80,079 |
| D. | Change over previous year in cash (%)
| | 10.8 |
8.9 | 9.5
|
| E. | Change over previous years in real terms (%) (total)
| | 7.9 |
6.2 | 6.9
|
| F. | Change over previous years in real terms (%) (net)
| | 8.7 |
6.8 | 7.4
|
|
| Central Government Personal Social Services(16)
|
| A. | Net spending | 195
| 122 | 193
| 219 |
| B. | Charges | 28
| 33 | 38
| 46 |
| C. | Total spending | 223
| 155 | 231
| 265 |
| D. | Change over previous year in cash (%)
| | -30.4 |
48.7 | 15.0
|
| E. | Change over previous year in real terms (%)
| | -32.3 |
45.0 | 12.2
|
|
| Central Government (specific and special) grants to local authorities
|
| A. | Net spending | 1,964
| 2,018 | 1,836
| 1,871 |
| B. | Charges | 0
| 0 | 0
| 0 |
| C. | Total spending | 1,964
| 2,018 | 1,836
| 1,871 |
| D. | Change over previous year in cash (%)
| | 2.7 |
-9.0 | 1.9
|
| E. | Change over previous year in real terms (%)
| | 0.0 |
-11.3 | -0.6
|
|
| Credit Approvals (LA capital)
|
| A. | Net spending | 56
| 60 | 62
| 62 |
| B. | Charges | 0
| 0 | 0
| 0 |
| C. | Total spending | 56
| 60 | 62
| 62 |
| D. | Change over previous year in cash (%)
| | 6.1 |
4.5 | 0.0
|
| E. | Change over previous year in real terms (%)
| | 3.4 |
1.9 | -2.4
|
|
| Health and Personal Social Services Total
|
| A. | Net spending | 58,944
| 65,493 | 71,465
| 78,542 |
| B. | Charges and receipts(5) |
3,905 | 3,862
| 3,773 | 3,736
|
| C. | Total spending | 62,849
| 69,355 | 75,238
| 82,278 |
| D. | Change over previous year in cash (%)
| | 10.4 |
8.5 | 9.4
|
| G. | Change over previous years in real terms (%) (total)
| | 7.5 |
5.7 | 6.7
|
| H. | Change over previous years in real terms (%) (net)
| | 8.2 |
6.4 | 7.2
|
|
| Local Authority Personal Social Services
Current(9)(10)
|
| A. | Net spending | 12,622
| n/a | n/a
| n/a |
| B. | Charges and receipts(11)
| 2,475 | n/a
| n/a | n/a
|
| C. | Total spending | 15,097
| n/a | n/a
| n/a |
| | |
| | |
| D. | Change over previous year in cash (%)
| | | |
|
| G. | Change over previous years in real terms (%)(total)
| | | |
|
|
| Local Authority Personal Social Services
Capital
|
| A. | Net spending | 128
| n/a | n/a
| n/a |
| B. | Charges and receipts |
64 | n/a
| n/a | n/a
|
| C. | Total spending | 192
| n/a | n/a
| n/a |
| D. | Change over previous year in cash (%)
| | | |
|
| G. | Change over previous years in real terms (%)(total)
| | | |
|
|
| Local Authority Personal Social Services Total
|
| A. | Net spending | 12,750
| n/a | n/a
| n/a |
| B. | Charges and receipts |
2,539 | n/a
| n/a | n/a
|
| C. | Total spending | 15,289
| n/a | n/a
| n/a |
| D. | Change over previous year in cash (%)
| | | |
|
| G. | Change over previous years in real terms (%)(total)
| | | |
|
|
| Local Authority, Health and Personal Social Services Total(12)
|
| A. | Net spending | 71,694
| n/a | n/a
| n/a |
| B. | Charges and receipts(5) |
6,444 | n/a
| n/a | n/a
|
| C. | Total spending | 78,138
| n/a | n/a
| n/a |
| D. | Change over previous year in cash (%)
| | | |
|
| G. | Change over previous years in real terms (%) (total)
| | | |
|
|
| GDP deflator @ 26 June 2003
| 100.0 | 102.7
| 105.3 | 108.0
|
|
Footnotes:
1. Figures may not sum due to rounding.
2. Percentages are rounded to one decimal place.
3. Real terms growth figures differ from those given
last year because of subsequent changes in GDP deflators. Where
not otherwise specified, the figures are calculated on total expenditure
figures and therefore differ from the Departmental Report, where
increases are calculated on net expenditure.
4. The measures in changes in expenditure shown in lines
D to F are as follows:
Line D shows the percentage change in total expenditure.
Line E shows the percentage change in total expenditure
after accounting for inflation in the overall economy as measured
by the GDP deflator.
Line F shows the percentage change in net expenditure after
accounting for inflation in the overall economy as measured by
the GDP deflator.
5. Includes NHS trust charges and receipts.
6. Input Cost Data is not available for years where outturn
data is not available.
7. Figures for FHS non-discretionary expenditure for
years 2002-03 and 2003-04 include resources (normally funded from
FHS discretionary) to fund successive Personal Medical and Personal
Dental Service pilots.
8. Include Trading Funds—Medicines Control Agency
(MCA) and NHS Estates Agency.
9. There are no centrally generated plan figures for
local authority expenditure, including Personal Social Services.
10. Net budget figures are taken from Local Authority Revenue
Accounts returns.
11. Local Authorities do not forecast receipts for future
years. It is assumed that receipts for 2001-02 form the same proportion
of the net expenditure as for 2000-01.
12. Local Authority, Health and Personal Social Services total
excludes Central Government (Specific and Special) grants to Local
Authorities and Credit Approvals (LA Capital) to avoid double
counting. The total still does include an element of double counting
(unquantifiable) with regard to joint working between hospitals
and local authorities.
| 13. Less HCFHS depreciation of:
| 299 | 354
| 511 | 611
|
| 14. Less Dept Admin depreciation of:
| 15 | 16
| 16 | 16
|
| 15. Less CHMS depreciation of:
| 8 | 14
| 17 | 19
|
| 16. Less PSS depreciation of:
| 9 | 10
| 10 | 10
|
3. The NHS expenditure figures for 2002-03 to 2005-06
(in Table 2.2.1b) are different to that referred to by the Chancellor
in the 2002 Budget announcement. Since the 2002 budget announcement,
NHS expenditure plans have been changed and appropriate adjustments
made for the following reasons;
Change to the Discount Rate from 6% to 3.5%. From
1 April 2003.
Pensions Indexation: From 2003-04 onwards the Departmental
Expenditure Limit for the Department of Health has been increased
by a switch from the Exchequer's AME spending to cover the increased
cost of pensions. An addition of over £1.6 billion has been
made to the NHS DEL to cover these costs from 2003-04 onwards.
Free Nursing Care: From 2003-04 the NHS is responsible
for paying for the cost of providing Free Nursing Care to those
in Nursing Homes.
Health Care in Prisons: From 2003-04 the Department
of Health is responsible for paying for the cost of providing
health care in Prisons. An addition of over £100 million
to the DH DEL has been made to cover these costs from 2003-04
onwards.
4. As a result of the above adjustments, growth in NHS
expenditure over 2002-03 in 2003-04 is distorted. Once these are
adjusted for, real-terms growth in Net NHS expenditure in 2003-04
is 4.9%, compared to 8.7% shown in table 2.2.1(b).
5. NHS and PSS Expenditure figures do not include the
Machinery of Government changes. They still include funding for
Children's services, the responsibility of which has transferred
to DFES from 1 April 2003.
6. Table 2.2.1(c) gives a brief explanation of
the main areas of expenditure in table 2.2.1(a) and 2.2.1(b).
Table 2.2.1(c)
EXPLANATION OF MAIN AREAS OF EXPENDITURE IN TABLE 2.2.1a
and 2.2.1b
| Area of Expenditure | Description
|
|
NHS Hospital and Community health
Services and discretionary family health
services(HCHS)
| This covers hospital and community health services, prescribing costs for drugs and appliances and discretionary General Medical Services (which include reimbursements of GMS GPs' practice staff, premises, out of hours and IM&T expenses). It also includes other centrally funded initiatives, services and special allocations managed centrally by the Department of Health (such as service specific levies which fund activities in the areas of education and training and research and development).
|
|
| Capital | Capital expenditure is that used on the acquisition of land and premises, individual works for the provision, adaptation, renewal, replacement or demolition of buildings, items or groups of equipment and vehicles etc.
|
|
NHS Family Health Services (FHS)
(non-cash limited)
| This covers "demand led" family health services, including the remuneration of General Medical Practitioners for demand led items of service payments such as capitation payments, health promotion and basic practice allowance, the cost of general dental and ophthalmic services, dispensing remuneration and income from dental and prescription charges. For comparison purposes, the FHS non-discretionary figures in figure 2.2.1a and 2.2.1b also contain FHS discretionary expenditure on Personal Medical Services (PMS) and Personal Dental Services (PDS) spend.
|
|
| Departmental Administration | The administrative costs of running the Department of Health.
|
|
Central health
and miscellaneous
services (CHMS)
| These are a wide range of activities funded from the Department of Health's spending programmes whose only common feature is that they receive funding direct from the Department and not via health authorities. Some of the services are managed directly by Departmental staff; some by non-departmental public bodies, or other separate executive organisations.
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|
| Other NHS Capital | Includes the capital elements of Departmental administration and CHMS.
|
|
| NHS Total | The sum of HCHS current and capital expenditure, FHS, Departmental administration, CHMS current expenditure and other NHS capital.
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Personal Social
Services | Personal care services for vulnerable people, including those with special needs because of old age or physical or mental disability, and children in need of care and protection. Examples are residential care homes for the elderly, home help and home care services, and social workers that provide help and support for a wide range of people. From April 2003, responsibility for children's services has transferred to the Department of Education and Skills.
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Central Government (specific and special)
grants to local
authorities
| Cash grants targeted at services which require a higher priority, where pump priming is appropriate or where the service is needed in only some authorities.
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Credit Approvals
(LA capital)
| Central government permission for individual local authorities to borrow or raise other forms of credit for capital purposes.
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| Local Authority Personal Social Services
| Personal care services for vulnerable people, including those with special needs because of old age or physical or mental disability, and children in need of care and protection. Examples are residential care homes for the elderly, home help and home care services, and social workers that provide help and support for a wide range of people. From 1 April 2003, responsibility for children's services transferred to the Department of Education and Skills.
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| Health and Personal Social Services Total
| The sum of NHS total, central Government personal social services, central Government (specific and special) grants to local authorities, credit approvals (LA capital), and civil defence.
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Local Authority, Health and Personal
Social Services Total
| The sum of Health and Personal Social Services Total and Local Authority Personal Social Services Total.
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2.2.2. What is the Department's assessment of each
programme's performance in 2001-02 against plans for that year,
and anticipated performance in 2002-03 against plans for that
year and outturn in 2001-02? [2.2.3]
1. Table 2.2.2 outlines the significant changes
(ie over £10 million) between estimated outturn reported
in last years evidence (HC1210) and outturn expenditure in table
2.2.1(a) of this years evidence for 2001-02.
Table 2.2.2 also shows the significant changes (ie over £10
million) between Planned expenditure in last years evidence (HC1210)
and estimated outturn expenditure in table 2.2.1(a) of this years
evidence for 2002-03.
Table 2.2.2
COMPARISON OF NET EXPENDITURE PLANS FOR 2001-02 AND 2002-03
WITH THOSE ON PAGES 19-22 OF LAST YEAR'S HEALTH COMMITTEE WRITTEN
EVIDENCE (HC 1210)
The main areas of change (£10 million or over) to
the spending plans for various parts of the programme other than
LAPSS are as follows. The grant to local authorities for central
government is unhypothecated. Local authorities determine their
own expenditure.
| | | £ million
|
|
| Difference
| 2001-02 |
|
| HCHS current | -781
| -624 | Transfer to FHS Non Discretionary for
revised presentation of PMS and PDS
Expenditure in 2003-04 Questionnaire
|
| | -157
| Provisional underspend due to slippage in
programme spending
|
| HCHS capital | 47
| 39 | Additional Capital Underspend
|
| FHS Current | 649
| 624 | Transfer from HCHS for revised presentation
of PMS and PDS Expenditure in 2003-04
Questionnaire
|
| | 25
| Higher than expected demand on GMS
resources, partially offset by lower than
expected volume of NHS dentistry
|
| Departmental Administration | -8
| | No Changes over £10 million to report
|
| CHMS current | -21
| -21 | Final expenditure was less than granted
through unanticipated savings on public
education campaigns, welfare foods and The
Family Fund partially offset by increased
expenditure on research and development
projects and contributions towards the
welfare foods scheme
|
| Central Government PSS | -25
| -16 | Underspend in the National Care Standards
Commission capital programme
|
| PSS Grants to Local Authorities | -7
| — | No Changes over £10 million to report
|
| PSS Credit Approvals | -1
| — | No Changes over £10 million to report
|
|
| | | |
| | | £ million
|
|
| Difference
| 2002-03 |
|
| HCHS current | -553
| 531 | Take up of End Year Flexibility (EYF)
|
| | 350
| Transfers from HCHS capital |
| | -277
| Transfers to FHS non discretionary |
| | -1,112
| Transfer to FHS non discretionary for
revised presentation of PMS + PDS
Expenditure
|
| | 242
| Reclassification of NHS Trusts Depreciation
|
| | -200
| Transfers to Personal Social Services |
| | -79
| Transfers to CHMS |
| HCHS capital | -317
| -350 | Transfer to HCHS Revenue
|
| | 43
| In year addition from Treasury Capital
Modernisation Fund
|
| | 154
| PFI schemes taken on balance sheet as a
result of FRS5
|
| | 59
| Take up of EYF |
| | -227
| Estimated Underspend |
| FHS current | 1,389
| 277 | Transfer from HCHS Current
|
| | 1,112
| Transfer from HCHS for revised presentation
of PMS + PDS Expenditure
|
| Departmental Admin Current | 16
| | No Changes over £10 million to report
|
| CHMS current | 75
| 79 | Transfers from HCHS revenue
|
| Central Government PSS | 14
| 10 | Transfer from HCHS for Social Care Change
Agents (Modernisation Agency)
|
| PSS Grants to Local Authorities | 187
| 190 | Transfer from HCHS for the Building Care
Capacity Grant
|
| PSS Credit Approvals | 0
| | No changes over £10 million to report
|
|
Note: Changes less than £10 million are not listed and
may slightly affect totals.
2.2.3 Could the Department provide a breakdown of
what the additional NHS expenditure in 2002-03 as compared with
2001-02 has been spent on? The impacts on expenditure of additional
staff, increased pay levels, medicines, capital and other expenditures
should be distinguished where possible. [2.2.6]
1. Total NHS expenditure in 2002-03 rose by £5.1
billion, of which £4.8 billion was increased revenue expenditure
and £0.3 billion increased capital expenditure.
2. In Summary, of the additional £5.1 billion in
2002-03 was accounted for in the following proportions:
|
| Extra staff, Drugs and goods and services |
42% |
| Pay accounted for | 32%
|
| Capital and Training | 19%
|
| Cost Pressures | 7%
|
|
3. This extra cash has been used to:
(i) improve access and quality of services. More
than £2.2 billion of the increase has been used to employ
additional staff, increase prescribing and purchase more goods
and services. Approximately £1.3 billion was spent on additional
staff and £850 million on increased prescribing. As a result
hospital inpatient activity will increase by 4.5% and outpatient
activity by 2.5%. The number of prescriptions will rise by nearly
30 million (5%). This will be accompanied by significant reductions
in waiting times across the NHS and improved quality and outcomes
in priority areas (section 2.2);
(ii) invest for the future. To achieve world class
service standards the NHS needs to invest in people and infrastructure.
Investment in training, capital and research is expected to increase
during the year by almost £1.0 billion (20%). This has helped
amongst other things to enable the completion of six major hospital
schemes and increased nurse training places by 5.5%, allied health
professional training by almost 17% and medical school intake
by over 12% (section 2.3);
(iii) ensure that pay levels are sufficient to attract
and retain staff. Needed to continue to provide sustained
improvements in NHS performance. Around £1.6 billion has
been invested in pay and this is having a direct impact on staff
numbers. The number of staff employed is expected to increase
significantly, especially amongst nurses (section 2.4);
(iv) to meet unavoidable cost increases (section 2.5)
such as inflation on goods and services.
IMPROVING ACCESS
AND QUALITY
OF SERVICE
4. Extra staff, drugs and goods and services account
for 42% of the increase in NHS expenditure. These are key to improving
access and quality of NHS services.
MORE STAFF
5. Delivery of the NHS Plan depends critically upon increasing
staff numbers. Since September 2001 total NHS staffing rose[4]
significantly including increases of:
(a) 17,000 more qualified nurses;
(b) 2,000 more therapists;
(c) 400 additional GPs; and
(d) 1,200 more hospital consultants.
6. These staff have been deployed to help, amongst other
things:
(a) treat an additional 30,000 in-patients in hospitals;
(b) deal with an additional 240,000 out-patient attendances;
and
(c) deliver an additional 5,000 revascularisations
(heart operations).
PRESCRIBING
7. The increased spend on drugs reflects an 11.2% growth
in GP and nurse prescribing and 12% growth in hospital drugs.
Within the total spend on drugs, we estimate that implementing
NICE guidance has cost around £250 million extra in 2002-03.
The estimated increased cost of treatments referred to NICE include:
(a) £55 million on Ribavirin and Interferon
Alpha for Hepatitis C which will benefit around 7,000 people;
(b) £25 million Cox IIs for osteoarthritis
and Rheumatoid Arthritis which will benefit around 1.4 million
people; and
(c) £39 million on zyban and nicotine replacement
therapy for around 1.4 million people.
8. The growth in GP and nurse prescribing spend on drugs
this year includes:
(a) £208 million on drugs for Coronary Heart
Disease (ie lipid regulating and anti-hypertensives) equivalent
to over nine million more prescriptions;
(b) £50 million on drugs for diabetes or over
two million prescriptions;
(c) £32 million on drugs for depression equivalent
to writing two million more prescriptions;
(d) £31 million on drugs for healing ulcers
equivalent to over 1.5 million more prescriptions; and
(e) £27 million on drugs for respiratory problems
or 400,000 more prescriptions.
INVESTING IN
THE FUTURE
9. Delivery of further improvement in the NHS beyond
2002-03 will depend upon investment for the future in staff, buildings,
equipment and information technology. In 2002-03 the additional
investment allowed, amongst other things:
INVESTMENT IN
TRAINING
(a) an increase in Nurse and midwife training places
1,540 (7.0%);
(b) an increase of around 1,620 (22%) of therapists
and other key professional training places;
(c) an increase in Specialist Registrars training
places of 300;
(d) an increase in pre-registration house officers
of 160;
(e) an increase of around 200 in the number of
GP Registrars, bringing the total number of extra funded GPR posts
to 350;
(f) an increase in the overall number of clinical
placements of 4.4%; and
(g) an increase of intake of medical students of
580 (12.3%).
INVESTMENT IN
BUILDINGS, EQUIPMENT
AND INFRASTRUCTURE
(a) a 16% increase in the level of general capital
allocations (to around £1.5 billion) to maintain and improve
the NHS estate;
(b) six new hospitals opened in 2002-03 with a capital
value in excess of £474 million;
(c) five medium sized schemes completed, worth in
excess of £70 million;
(d) 14 new Diagnostic and Treatment Centres opening
during the year with annual capacity totalling in excess of 40,000
cases. Two new walk in centres and the improvement of 13 others.
IT investment across all 42 walk in centres;
(e) expanding and modernisation of services for Coronary
Heart Disease £100 million;
(f) central purchase of major Cancer equipment,
including 11 new MRI scanners, 12 Linear Accelerators, 35 CT Scanners
and over 180 items of breast screening equipment, all delivered
since April 2002; and
(g) various improvements for Mental Health patients
including improvements to the physical environment in psychiatric
in-patient wards, improved security at high secure units and development
of facilities to accommodate patients with Serious Personality
Disorder—Total £77 million.
10. Work has begun on conversion of 236 nightingale wards
for older people—to be completed by April 2004.
PAY INCREASES
TO RECRUIT
AND RETAIN
STAFF
11. The NHS is a labour intensive organisation and pay
accounts for roughly 55% of total spend (60% of revenue expenditure).
Consequently pay increases absorb a significant part of the additional
spend. The main elements of the total increase in paybill are:
(a) pay awards for NHS staff worth, on average, 4.0%:
£1,120 million;
(b) change in occupational and grade mix: £325
million; and
(c) extension of Cost of Living Supplements for
staff living in high cost areas in London and parts of the South
East: £40 million.
12. Investment in pay is, of course, vital both to recruit
and retain staff.
PRICE INCREASES
13. As well as investment in staff and additional activity
the NHS, faces day to day price rises in goods, services and drugs.
We estimate that these cost the NHS around an extra £370
million in 2002-03. Of this, £70 million was to cover the
increase in payments for Clinical Negligence awards and the rest
was inflation on the cost of goods and services purchased by the
NHS.
EFFICIENCY
14. In 2002-03 we estimate that efficiency in the NHS
improved by around 1%. This is an initial estimate for 2002-03
and is subject to change, final estimates of efficiency will not
be available until the audited accounts for 2002-03 are published
in the autumn.
15. As set out in Delivering the NHS Plan, we have developed
a better, more rounded measure of NHS efficiency. This new measure
of efficiency, which replaces the Cost Weighted Efficiency Index,
is an improvement over the old measure as it takes into account
case mix changes and investment in quality improvements.
2.2.4 Could the Department provide information on
net NHS expenditure in England on a consistent basis, including
taking into account the switch to resource accounting, from 1970
to the latest plans?
1. It is not possible to provide information on Net NHS
expenditure on a consistent basis, as the information is not available.
2. Table 2.2.4 shows Total NHS Expenditure in
England between:
(i) 1971-72 and 1999-2000 on a cash basis.
(ii) 1999-2000 and 2002-03 on a Stage 1 Resource
Budgeting basis.
(iii) 2002-03 and 2005-06 on a Stage 2 Resource Budgeting
basis.
3. Table 2.2.4 also shows a continuous run of annual
growth rates in NHS expenditure.
Table 2.2.4
TRENDS IN ACTUAL, ESTIMATED AND PLANNED TOTAL EXPENDITURE
ON THE NHS (ENGLAND)1971-72 to 2005-06
|
| Year | | Net NHS
Expenditure(4)
£ billion
| % real terms
increase(5)
|
|
| Cash | |
| |
| 1971-72 | Outturn
| 2.0 | |
| 1972-73 | Outturn
| 2.3 | 5.5
|
| 1973-74 | Outturn
| 2.5 | 2.6
|
| 1974-75 | Outturn
| 3.3 | 11.1
|
| 1975-76 | Outturn
| 4.4 | 5.6
|
| 1976-77 | Outturn
| 5.0 | 0.4
|
| 1977-78 | Outturn
| 5.6 | -2.9
|
| 1978-79 | Outturn
| 6.3 | 1.7
|
| 1979-80 | Outturn
| 7.4 | 1.6
|
| 1980-81 | Outturn
| 9.7 | 10.2
|
| 1981-82 | Outturn
| 10.9 | 2.2
|
| 1982-83 | Outturn
| 11.8 | 1.8
|
| 1983-84 | Outturn
| 12.5 | 1.2
|
| 1984-85 | Outturn
| 13.4 | 1.9
|
| 1985-86 | Outturn
| 14.2 | 0.3
|
| 1986-87 | Outturn
| 15.2 | 3.7
|
| 1987-88 | Outturn
| 16.7 | 4.2
|
| 1988-89 | Outturn
| 18.4 | 3.5
|
| 1989-90 | Outturn
| 19.9 | 0.6
|
| 1990-91 | Outturn
| 22.3 | 4.3
|
| 1991-92 | Outturn
| 25.4 | 7.0
|
| 1992-93 | Outturn
| 28.0 | 6.9
|
| 1993-94 | Outturn
| 28.9 | 1.0
|
| 1994-95 | Outturn
| 30.6 | 4.3
|
| 1995-96 | Outturn
| 32.0 | 1.7
|
| 1996-97 | Outturn
| 33.0 | 0.0
|
| 1997-98 | Outturn
| 34.7 | 1.9
|
| 1998-99 | Outturn
| 36.6 | 2.8
|
| 1999-2000 | Outturn
| 39.9 | 6.4
|
| RB Stage 1(1) | |
| |
| 1999-2000 | Outturn
| 40.2 | —
|
| 2000-01 | Outturn
| 44.0 | 6.9
|
| 2001-02 | Outturn
| 49.3 | 9.4
|
| 2002-03 | Estimated
Outturn
| 54.4 | 7.1
|
| RB Stage 2(2) | |
| |
| 2002-03 | Estimated
Outturn
| 56.7 | —
|
| 2003-04 | Plan(3)
| 63.3 | 8.7
|
| 2004-05 | Plan
| 69.4 | 6.8
|
| 2005-06 | Plan
| 76.4 | 7.4
|
|
Footnotes:
1. Expenditure figures from 1999-2000 to 2002-03 are consistent
with table 2.2.1a.
2. Expenditure figures from 2002-03 to 2005-06 are consistent
with table 2.2.1b.
3. NHS expenditure figures for 2002-03 to 2005-06 have been
adjusted for classification changes by HMT. As a result, growth
in NHS expenditure in 2003-04 is distorted. Once these are adjusted
for, real terms growth in NHS expenditure in 2003-04 is 4.9%.
4. NHS Expenditure figures do not include the Machinery of
Government changes (ie they still include funding for Children's
services, responsibility for which has transferred to DFES).
5. Based on the GDP Deflator series as at 27 June 2003.
2.2.5 Could the Department provide information on
NHS income from charges over the last 10 years by type of charge?
1. Table 2.2.5 shows the breakdown of NHS income
from charges over the last 10 years (1992-93 to 2001-02) by type
of charge.
4
Based on provisional figures 2002. Back
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