What does it mean that the NHS is in deficit to the tune of £930m? It’s not a business trying to make a profit for its shareholders – the deficit doesn’t refer to losses. The forecast is that the deficit will be as much as £2.8bn by the end of the financial year next April. But that’s the difference between the actual costs of delivering NHS services, still mostly free at the point of delivery, and the budgeted costs agreed by the Health Secretary for the financial year. It looks like the Health Secretary got the figures badly wrong.
The budget figures are set and NHS Trusts have to work out how such targets can be met. Clearly a major component of costs relate to staff: doctors, nurses and other staff. The only way the budgeted figures could be achieved is to reduce numbers employed. So those cuts are made as a result of the annual budget process. The shadow health secretary quoted a figure of 6,000 nursing posts, for example, as being cut during the last parliament.
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