Money earmarked for mental health diverted to balance NHS books

NHS trusts in England are forecast to overspend by £873m in 2016-17 and ministers are now being accused of breaking their promises after £800m earmarked to improve mental health services was diverted to shore up hospitals’ finances.

A leading mental health charity said redirecting the money would hit patient care and hinder the drive, backed by Theresa May, to improve care for people with serious mental health problems.

“It would be incredibly worrying if mental health investment was being sacrificed so that [NHS bodies] can balance their books,” said Mind chief executive Paul Farmer, who chaired the NHS taskforce on mental health that last year recommended sweeping changes, including to funding.

The move has emerged in a letter written by NHS England’s finance chief, Paul Baumann, which has been seen by the Health Service Journal. In it he makes clear that the £800m, which NHS England held back from its 209 clinical commissioning groups this year, will help stabilise NHS finances. In his letter, Baumann confirms that NHS England now intends to use the “full amount” of the contingency fund to offset overspends by NHS acute hospital trusts in 2016-17.

NHS trusts in England were initially told to overspend by no more than £250m this year. That target was revised to £580m, but trusts are now forecast to end 2016-17 about £873m in the red, according to NHS Improvement – the service’s financial regulator.

Diverting the contingency money will help the health secretary, Jeremy Hunt, avoid the embarrassment of his department busting its budget for this year. It needed an emergency injection of £205m last year.

“Jeremy Hunt has said that children’s mental services are the NHS’s biggest failing. It is of no use pledging improved funding for children’s and other mental health services if the NHS is going to divert funding for trust deficits,” the shadow health minister has said, adding that ministers should ringfence mental health funding to ensure it reaches the frontline.

NHS England played down the impact on key services. “As we’ve been saying since the start of the year, we set aside £800m to cover provider deficits if needed, and we do now need to,” a spokesman said. “This is uncommitted money that would otherwise have been invested at the discretion of commissioners. It will be important to get the trust deficit down next year so planned investments can take place.”

Julie Crossley, a clinical negligence lawyer at Ashtons Legal comments: “It would be disastrous if this promised funding for Mental Health Services was not met. We know that underfunding has catastrophic effects for patients which leads to litigation”.