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<p>We have seen an improvement in the provider deficit from £991 million in 2017-18
to £827 million.</p><p>We recognise that it is important that the provider sector
balances and there is still much more to do. The National Health Service has committed
to returning the provider sector to balance, as well as all providers, as part of
its NHS Long Term Plan, supported by the new cash terms funding commitment of £33.9
billion by 2023-24.</p><p>It is misleading to infer the financial health of the provider
sector from changes in the reported underlying deficit. The purpose of calculating
of an underlying deficit is to use as a baseline for planning purposes for individual
trusts. Adjustments made to construct this figure include the removal of funding that
is recurrent in the national NHS budget (but not for individual trusts), for example
the Provider Sustainability Fund, which grew from £1.8 billion in 2017-18 to £2.45
billion in 2018-19. The growth in the underlying deficit simply reflects a growth
in this recurrent income stream.</p><p> </p>
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