The income deduction of £6,357,000 applied to the University hospitals of Morecambe Bay in 2006-07 as a result of overspending in 2005-06 will be reversed. At quarter three the trust was forecasting a deficit of £6,357,000; the reversal of the income deduction means the revised forecast is for breakeven.
In 2007-08 national health service trusts will not be subject to income deductions for overspending in 2006-07.
The changes to the resource accounting and budgeting regime apply to NHS trusts only. This is in line with the recommendations in the Audit Commission “Review of the NHS Financial Management and Accounting Regime” published in July 2006.