Treasury clawbacks

Here are two interesting quotes taken from the opposition day debate on the NHS on 16th January 2012.

The Secretary of State for Health (Mr Andrew Lansley):We delivered £4.3 billion of cost improvement in the NHS in the last financial year. We are aiming to do more this year. We delivered £2.5 billion, according to the deputy chief executive of the NHS, in the first two quarters. Every penny saved by reducing costs in the NHS is available to be reinvested in the NHS.

Andrew Lansley is known for his absolutist language, it is not "most of the savings" it is "every penny saved". Similarly, the then Minister of State Simon Burns uses bullish language, but in this case, he adds some more details to Lansley's claim:

The Minister of State, Department of Health (Mr Simon Burns):Any and all money made by the NHS is returned straight into care, not to the Treasury.

This is equally absolutist ("any and all money"), but is also mentions the villain that scares people: the Treasury.

However, both are wrong. Over the last financial year the NHS underspent by £1.7bn and the Treasury clawed back £1.4bn of that. Indeed, HSJ (paywalled) say that:

The spokesman also confirmed that the DH recorded a £1.9bn underspend in 2010-11 - but made no use in that year of the "budget exchange" scheme which allows government departments to carry over some unspent funds for use in future years. This means at least £2.9bn of DH funding has been clawed back by the Treasury in the past two years. This is despite the NHS facing a funding settlement for 2011-12 to 2014-15 that is likely to mean its “tightest four-year period in the last 50 years”, according to think tanks the Nuffield Trust and the Institute for Fiscal Studies.

So over two years almost £3bn of NHS money has been clawed back by the Treasury for deficit reduction. This is not what Lansley and Burns were suggesting.