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NHS Deficits

Mr. Philip Hammond: To ask the Secretary of State for Health what guidance has been issued to NHS trusts with regard to (a) the recovery of historic deficits and (b) the management of deficit control totals. [17963]

Mr. Byrne: National health service organisations are expected to achieve financial balance each and every year. It is the responsibility of strategic health authorities (SHAs) to performance manage the organisations in
 
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their area, and deliver overall financial balance for their local health communities. The Department has contacted all organisations with a deficit in 2004–05 to emphasise the importance of sound financial management and ensuring value for money of public expenditure. Through this and other mechanisms, the Department explained the key role of implementing the system reform programme, and other efficiency measures, in delivering better services for patients within the funding available. The Department recognises that SHAs carry forward deficits and surplus to future years which ensures that organisations do not benefit from having a deficit and are not disadvantaged by a heavy surplus.

NHS Drug Costs

Mr. Lansley: To ask the Secretary of State for Health what the total (a) gross and (b) net cost of drugs to the NHS has been in (i) nominal and (ii) real terms in each year since 1979; what the percentage increase was in each year to the next in real terms; and what proportion of this percentage increase has been due to drug price inflation in each year. [19129]

Mr. Byrne: It is not possible to calculate drug price inflation. Drug prices can be affected by many factors; these include advances in drug therapy, new drugs substituting existing ones and price reduction due to generic competition. These factors can vary from year to year, from drug to drug, and vary in magnitude. This complexity prevents us from being able to calculate drug price inflation. The gross and net cost of drugs to the national health service in nominal terms, and percentage increase each year are shown in table 1.
Table 1: NHS drugs spend in nominal terms—England

	Gross		Net
	Outturn (£ million)	Percentage	Outturn (£ million)	Percentage
1987–88	1,899	—	1,888	—
1988–89	2,137	12.6	2,124	12.5
1989–90	2,365	10.7	2,356	10.9
1990–91	2,552	7.9	2,540	7.8
1991–92	2,926	14.7	2,908	14.5
1992–93	3,294	12.6	3,284	12.9
1993–94	3,689	12.0	3,661	11.5
1994–95	4,016	8.9	3,994	9.1
1995–96	4,379	9.0	4,372	9.5
1996–97	4,769	8.9	4,735	8.3
1997–98	5,195	8.9	5,173	9.3
1998–99	5,567	7.2	5,550	7.3
1999–2000	6,220	11.7	6,202	11.7
2000–01	6,690	—	6,688	—
2001–02	7,454	11.4	7,447	11.3
2002–03	8,358	12.1	8,355	12.2
2003–04	9,274	11.0	9,267	10.9

The gross and net cost of drugs to the NHS in real terms, and percentage increase each year are shown in table 2.
Table 2: NHS drugs spend in real terms (2003–04 prices)—England

	Gross		Net
	Outturn (£ million)	Percentage	Outturn (£ million)	Percentage
1987–88	3,369	—	3,350	—
1988–89	3,544	5.2	3,523	5.1
1989–90	3,662	3.3	3,648	3.6
1990–91	3,664	0.1	3,647	0.0
1991–92	3,962	8.1	3,938	8.0
1992–93	4,323	9.1	4,310	9.5
1993–94	4,722	9.2	4,685	8.7
1994–95	5,062	7.2	5,034	7.4
1995–96	5,369	6.1	5,360	6.5
1996–97	5,647	5.2	5,607	4.6
1997–98	5,975	5.8	5,950	6.1
1998–99	6,242	4.5	6,222	4.6
1999–2000	6,839	9.6	6,819	9.6
2000–01	7,260	—	7,258	—
2001–02	7,895	8.7	7,887	8.7
2002–03	8,579	8.7	8,576	8.7
2003–04	9,274	8.1	9,267	8.0

Notes:
1. Net figures include pharmaceutical price regulation scheme receipt savings.
2. The total drugs spend include spend within the family health service and also the hospital and community health service.
3. From 2000–01 figures are in resource terms, prior to this figures are in cash terms. Cash figures relate to February to January prescribing due to delay in prescription processing and payment calculations. Resource figures represent the actual cost between April to March.
4. We do not have data prior to 1987.
5. The gross domestic product deflator at September 2005 has been used to calculate spend in real terms at 2003–04 prices.
Sources:
Prescription Pricing Authority, England and Department of Health finance division.





 
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NHS Finance

Steve Webb: To ask the Secretary of State for Health what the deficit or surplus was at year end 2004–05 for (a) the NHS in England, (b) each strategic health authority, (c) each NHS trust and (d) each primary care trust. [18893]

Mr. Byrne: The audited accounts show that the national health service as a whole will end 2004–05 with an overall deficit of around £250 million. This represents around 0.4 per cent. of overall NHS resources.

The 2004–05 audited financial position of all NHS organisations (strategic health authorities, primary care trusts and NHS trusts) is available on the Department's website. A copy of this information has been placed in the Library. It is also available on the Department's website at: www.dh.gov.uk/PublicationsAndStatistics/FreedomOfInformation/ClassesOfInformation/fs/en.

Norman Lamb: To ask the Secretary of State for Health what the cumulative deficit is for each strategic health authority. [20956]

Mr. Byrne: The cumulative deficit for strategic health authorities (SHAs) is the deficit that was incurred in the previous year.

The latest available data on the financial position of all SHAs is based on the 2004–05 audited accounts which is available on the Department's website at: www.dh.gov.uk/assetRoot/04/11/94/12/04119412.pdf.

Mr. Burstow: To ask the Secretary of State for Health if she will place in the Library copies of the month five financial forecasts submitted to her Department by each strategic health authority. [22978]

 
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Mr. Byrne: The latest available audited data on the financial position of national health service trusts is for 2004–05. The 2004–05 financial position of strategic health authorities, primary care trusts and NHS trusts is available in the Library. It is also available on the Department's website at: www.dh.gov.uk/PublicationsAndStatistics/FreedomOfInformation/ClassesOfInformation/fs/en

Mr. Lansley: To ask the Secretary of State for Health pursuant to the letter dated 23 September sent by the chief executive of the NHS to NHS organisations in deficit in 2004–05, which (a) NHS bodies and (b) centrally financed budgets were required to underspend in 2004–05; and if she will list the NHS organisations to which this letter was sent. [23975]

Mr. Byrne: The 2004–05 audited financial position of strategic health authorities, primary care trusts and national health service trusts is available in the Library. It is also available on the Department's website at:

www.dh.gov.uk/PublicationsAndStatistics/FreedomOfInformation/ClassesOfInformation/fs/en.

This information shows those NHS organisations that ended 2004–05 with an underspend and those NHS organisations that reported an overspend.

The letter sent by the NHS chief executive to NHS organisations on financial management went to all NHS bodies that reported an overspend in 2004–05.

The overall central programme was managed to achieve the appropriate underspend rather than issue detailed underspend figures to departmental budget managers.

John Hemming: To ask the Secretary of State for Health what proportion of NHS bodies are insolvent. [21569]

Mr. Byrne: No NHS organisations are insolvent. All national health service organisations have sufficient funding to pay their bills within a reasonable time.

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