Osborne’s £500 million budget raid on the NHS

23rd March, 2012 6:44 pm


If we thought all of the budget nasties were out already with the “granny tax”, we were wrong. Hidden in the budget red book is the news the Osborne has clawed back £500 million from the NHS, and it’s feared the money is going to deficit reduction. Or in other words, that NHS budget looks a little less “protected”. The HSJ reports:

“Figures published in this week’s Budget show that the Department of Health underspent its allocated funding by £900m this year. While £400m will be rolled over for the department to spend in 2012-13, the remaining £500m has been returned to the Treasury.”

Remember this poster?

Update: Ed Balls has responded, saying:

“The tax grab on pensioners was not the only hidden bombshell in the Budget. David Cameron and George Osborne have silently taken half a billion pounds from the National Health Service.

“Yet at the same time George Osborne has given a £3 billion tax cut to the richest people in the county – a tax cut worth over £40,000 for the 14,000 people earning over £1 million.

“It tells you everything you need to know about this government that they’re prepared to take money from pensioners and our NHS, while giving a tax cut to the richest people in our country.

“Some people thought the Tories had changed, but with this one Budget we’ve seen their true colours. It’s the same old Tories – a Budget where millions are asked to pay more so millionaires could pay less.”

  • Hamish Dewar

    Questions should also be asked why those in charge of the NHS managed to underspend by £900 million.

    • AnOldBoy

      Since neither the government nor the NHS can entirely control the demands on the NHS it is perfectly possible for it to underspend in a particular year.  Indeed, it would be sensible if its budget were not fully spent in any year: there should always be some provision against contingencies such as an epidemic.

    • http://www.soylentdave.com/ Dave

      We should encourage all our public services to underspend if at all possible. 

      What we shouldn’t do – and what all governments, but particularly our current one – are doing, is penalise public services who come in under-budget by reducing their budget the following year. 

      • Winston_from_the_Ministry

         Spot on, because when it gets near the deadline, they will spend on anything just to keep the money for next year.

        Common sense on their part, but insanity as a system.

  • Winston_from_the_Ministry

    I notice nobody has the guts to put their name to this article.


    • AlanGiles

      You don’t have the guts to put your real name to your posts. The words “pots” and “kettles” come to mind, along with the faint whiff of hypocrisy

      • Winston_from_the_Ministry

         False equivalence.

        • AlanGiles

          Not at all. You called the writer a “coward” for not putting their name to the piece – you do EXACTLY the same thing.

          If you want openess then show an example and use your real name (full name)

          • Winston_from_the_Ministry

            I’m not publishing an article on a blog Alan. There is someone to take responsibility for all my posts, whether a real identity or a nom-de-plume.  They are associated with an identity, and you can follow and contact that identity directly through Disqus if you chose.

            Not so above.

            So tell me again how it is EXACTLY the same.

            (Funnily enough, I have posted  here straight from my facebook profile from time to time.  Which I haven’t seen your good self do)

          • AlanGiles

            I don’t use Facebook. I use my real name. I am just suggesting you don’t call somebody a “coward” using a non-de-plume, because it reeks of hypocrisy.

    • http://www.soylentdave.com/ Dave

      It’s not exactly the world’s longest op-ed piece. 

      It’s one paragraph followed by the meat of the article – two large quotes (which ARE attributed). 
      I don’t think knowing who sourced the quotes would make a difference to their tone…

  • jaime taurosangastre candelas

    ”The Budget Exchange system gives departments the flexibility to deal with slippage in expenditure while strengthening spending control. It allows departments to surrender an under spend in advance of the end of the financial year in return for a corresponding increase in their budget in the following year, subject to a prudent limit.”

    It’s part of a scheme set up in 1983, updated by Gordon Brown in 1998, and updated again in 2011.  The “prudent limit” is set centrally at £400M.  See http://www.oxfordscholarship.com/view/10.1093/acprof:oso/9780198277842.001.0001/acprof-9780198277842-chapter-19 and http://www.hm-treasury.gov.uk/press_82_11.htm

    You would imagine that Ed Balls would remember that as he spent a decade in the Treasury working for the Chancellor.  

    The saving is from an underspend on the big IT systems which have been in some cases cancelled.  See http://www.hsj.co.uk/news/exclusive-treasury-claws-back-05bn-from-health-budget/5043162.article?blocktitle=Latest-News&contentID=7827

    So in reality, it is £400M available in the coming year to spend on general NHS expenditure, transferred from money originally allocated for IT systems. Roughly a rise of about 0.4% in the budget.

    It therefore is an uplift on general health expenditure of £400M.  It is not a “budget raid”.

    That took about 2 minutes on Google to find out.

    • AnOldBoy

      Thank you for clarifying this. It appears that Mr Balls is talking up his family name again.

      • Dave Postles

        ‘David Cameron in one of his main election promises vowed not to cut the
        NHS budget. Ministers grappling with the need to make £20bn efficiency
        savings over the parliament to meet new demands on the health service
        have always promised that any savings would be ploughed back into the


    • Dave Postles

      The private sector has its place in a mixed economy, especially when it introduces a new model of funding (well maybe, because free at the point of use actually has indirect costs elsewhere as the advertising revenue is almost certainly defrayed in the costs of the advertisers’ merchandise) but in the case of all web interfaces it all depended on the work of ARPAnet (and, one might add, BITBET) and Cerne (ELPP), which US and European taxpayers funded. 

    • Suey2y

      An uplift!! That’s classic. Seriously, do Tory HQ pay you? 

    • Suey2y

      An uplift!! That’s classic. Seriously, do Tory HQ pay you? 

      • http://twitter.com/gonzozzz dave stone

        Wait until you find out about his bogus biography.

    • Mike Murray

      Weasel words. Whichever way you spin it the National Health Service is still going to lose £500m. Clawed back by the treasury to fund the hole created by Osborne’s gift of £40,000 for every million earned by bankers, Tory donors, and serial tax avoiders. But this half a billion loss to the NHS is nothing to what will happen  once the NHS privatisation by Tories and their Liberal Democrat Stooges starts to bite. 

      • GuyM

        I think you’ll find things like the IT programme were never “NHS” money in reality.

        IT was a seperately funded programme that fell under DoH budget areas but were completely independent of clinical spend.

        When NPfIT was scheduled to end, the “NHS budget” would fall, but in reality clinical NHS spend wouldn’t as IT spend is not a permanent part of a clinical budget. It wasn’t meant to be an ongoing never ending gravy train (although NPfIT did it’s best to look that way).

        This sort of story just indicates that a lot of people on the left have never been budget holders nor managed large programmes.

        • TomFairfax

           ” …a lot of people on the left have never been budget holders nor managed large programmes.’

          Whilst no doubt true, can equally be applied to Center, and Right. Though I’ll grant you will certainly find those who have experience of such things across the spectrum, but clearly not on LL, or any other political site that I’ve witnessed.

          A more obvious complaint would be that political point scoring for the sake of it can expose the author to ridicule that’s difficult to defend against. Shame the names missing. Maybe they realised.

          It’s probably a mere coincidence, but that 400million sounds like the figure Andrew Lansley said originally would be cut from his departments costs by his plans for the NHS.

          As it is inarguably now confirmed as a figure within the natural annual variation in expenditure of his department. It rather reinforces the view he’ll not be able to prove his plans have achieved anything , whilst at the same time recieving the blame for everything that goes wrong in that department for however long this government lasts.

  • Stallard459

    The trouble with this budget is that it is inadequate.
    At the end of next year, the deficit and the debt will still be growing. The budget has not faced up to the very thing that holds the coalition together.

  • Catherine

    Same old Tories.  No surprise that they’ve already started on the NHS. First Granny – next the nurses.

    Tell the government that pensioners are more deserving than millionaires. Sign the petition http://epetitions.direct.gov.uk/petitions/31767

  • Dave Postles

    Maude made two promises about IT and government data projects: (i) they would be split into smaller units to allow SMEs to be involved; and (ii) they would not be off-shored.  Is this another U-turn?


  • derek

    Why wasn’t this cash used to create more employment? we all know there is a shortage of nurse care in wards, where nurses are expected to look after up to 14 patients at any one time.

  • Dave Postles
  • GuyM

    Really is a bonkers line of attack.

    If NPfIT has never been dreamed up in the first place, this money for the programme would not ever have been in NHS budgets.

    On going clinical care and finite IT programme costs are not the same thing, not from the same budget pot and not bound by the same budgetary rules.

    Of course this rather basic financial and programme management point is lost on those ignorant of senior management procedures and deliberately obscured by people like Balls in order to whip a prejudiced following into an inane frenzy. Not that it takes much to work up some LL regulars who wouldn’t understand a strategic business budget if came and bit them on the backside.

  • AlanGiles
  • Pingback: Vote 2012: Safe in their hands? The six broken Tory NHS promises | Left Foot Forward()

  • casual agent

    I just wonder what pensioners will think about the fact the Tories are privatizing the NHS via the back-door’ Maybe in exchange for Saving incentives’Then to have to cough-up for private healthcare and find out they’ve sacrificed our NHS in favour of a few extra quid on their savings…I can’t think that would be much of a fair deal eh?…Pensioners Beware!…You simply can’t trust the Tories with our NHS….Think on Folks before it’s too late!


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