• Department of Health publishes annual report and accounts
• Accounts show that DH has stabilised its financial position but NHS capital spending falls for the third year in a row
• We say there is strong evidence that there is a large and growing gap in capital funding

The Department of Health has published its annual report and accounts for 2016/17.

 The accounts show that:

• The DH underspent its Revenue Departmental Expenditure Limit (RDEL) by £563m in 2016/17. This follows an overspend in 2015/16.
• NHS capital spending, intended for long-term investments such as buildings and equipment, has fallen in real terms by 20% over the last three years.

The head of analysis at NHS Providers, Phillippa Hentsch said:

“The Department of Health has stabilised its financial position, but we remain concerned that the underlying picture for the sector is unsustainable in the long term.

“Our State of the NHS Provider Sector report showed NHS trusts have played a key part in achieving this. They have made significant progress in reducing the provider sector deficit in 2016/17 as a result of a clear plan, financial support and a lot of hard work from trusts. However they now enter a difficult year ahead, with lower funding increases and expectations to make even greater savings.

There is strong evidence that the sector is facing a large and growing gap in capital funding.

“For the third year in a row investment in NHS buildings and equipment has fallen. It is concerning that the funding which has been set aside for this purpose is being used to relieve day to day financial pressures. There is strong evidence that the sector is facing a large and growing gap in capital funding.

“The Naylor Review highlighted £10bn shortfall in infrastructure spending, with this covering the maintenance backlog and delivering the requirements of the Five Year Forward View. Without adequate investment, we risk adding to this backlog and leaving the health service unable to cope with the pressures from increasing demand that it faces.”