The Treasury has clawed back half a billion pounds that was allocated for health spending this year, prompting fears that the punishing NHS savings drive will go towards “general deficit reduction”.

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.

Nuffield Trust chief economist Anita Charlesworth told HSJ: “Although a number of NHS trusts are in deficit, the NHS is projecting a healthy surplus and the health budget as a whole is forecast to underspend by £900m this year.

“The argument for front-loading efficiency plans was to generate money to reinvest in transforming services so that they would be sustainable in later years as the impact of constrained funding started to bite. 

“Instead it seems that £500m of the savings are not going to be reinvested in new models of service delivery but will instead be channeled towards central government deficit reduction.”

A DH spokeswoman said: “The majority of the underspend is from the capital budget - mainly from savings on IT systems and better management of budgets.  We have already taken advantage of HM Treasury’s Budget Exchange Scheme and transferred the maximum amount of the capital budget into 2012-13.”

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