The Department of Health’s figures for the first quarter of the 2008-9 financial year show the NHS predicts a full-year surplus of £1.75 billion on its £97 billion annual budget, and is on track to hit other targets.

The Quarter, DH’s publication of each quarter-year’s figures, assesses financial performance from April, May and June. The predicted surplus, which represents about 2% of the NHS budget is described as “in line with the expected financial poisition”. The press statement also notes that “There has also been continued improvement in reducing the gross deficit, predicted to be £45 million at year end, down from £125 million at the end of 2007/08 and £1,312 million in 2005/06”.

Financial pressures – expected and unexpectedSome new financial pressures on the NHS in 2008-9 were expected, such as the 18-week referral-to-treatment (RTT) target, which is comfortably on course to meet the December deadline across most of the country.

David Nicholson, NHS chief executive, has also stressed in various speeches the need to continue a surplus for the double-running of existing services while new community-based services (including those in polyclinics – come on stream.

However, the NHS – in common with the rest of the country – faces new inflationary pressures with the economic slowdown and rising fuel and food costs. Three-year wage deals with the trades unions are also likely to face the threat of renegotiation as inflation continues, and interest rates remain high due to the Bank of England’s anti-inflationary monetary policy.

The Quarter outlines progress with healthcare associated infections (HCAIs), a further 11 percent reduction in MRSA infections for the period January to March this year. This has contributed to an overall 49% reduction compared to the 2003/04 baseline. The target is to see a 50% reduction by the end of this year.

Despite usually rising in winter months including April, C. difficile infections in the 65 years and over age group fell by 32% compared with the same quarter in 2007/08.

The Quearter also observes that 37.8% of GP practices have achieved the extended hours target in July, up from 28.1% the previous month. If this improvement is sustained, the DH’s target of 50% of practices achieving extended opening hours should be achieved by the end of December.

Strong progress
David Flory, Department of Health's Director General of NHS Finance, Performance and Operations, said, "this is an excellent start to the year for the NHS. A strong financial position backed by good progress on delivery will continue to ensure high quality services for patients.

"The NHS is well on the way to delivering 18 weeks from referral to treatment and the progress on the MRSA target is a tremendous achievement that highlights how everyone working in the NHS has taken responsibility for making our hospitals cleaner and safer.

"The NHS must now look forward to concentrating on sustaining progress and focussing on responding to what people need at a local level. This strong start to 2008/09 means that the NHS has the flexibility to invest in making its local visions, published as part of the NHS Next Stage Review, for delivering the highest quality care for its communities a reality."

Commenting on the figures, Jo Webber, deputy policy director for the NHS Confederation, said, “these figures are really encouraging and show that the NHS is making the most of a much needed period of stability in order to improve its overall performance. With continued stability and the freedom to use its surplus to fund planned new investment for the long term, we are hopeful that the NHS will be able to continue to get better in the future.

“Certainly, much more still needs to be done but it is important to highlight such strong performance as all NHS staff have worked very hard to tackle healthcare acquired infections, re-organise the structure of the NHS and deliver financial stability over the last few years.”