How can the NHS have a £1.75 billion surplus?

The NHS is a monster. It has so many moving parts that I defy you to find anyone who truly understand how it all works. As a test, see if you can square these three data points:

1. Despite 11 years of Labour pumping money into the NHS, we now have the largest gap in life expectancy between rich and poor since Victorian times, comparing unfavourably with some parts of the developing world.

2. NICE are making allocation decisions about the finite pot of NHS money and, as a result, are not sanctioning the prescription of some new drugs on the grounds that they do not meet their cost effectiveness test for each additional 'quality adjusted life year' for patients.

3. The NHS is this year forecast to make a £1.75 billion surplus in the current financial year, i.e. it will not spend all the money allocated to it.

Common sense tells you that if we have such intractable public health issues and only a certain amount of money, we should not be left with vast unspent sums, equivalent this year to 2% of the total NHS budget. Why is David Flory, director general of NHS finance, performance and operations, saying:

"This is an excellent start to the year for the NHS. A strong financial position backed by good progress on delivery will continue to ensure high quality services for patients."

How it is "excellent" that money that should be spent on patient care is not being spent? Is it too much to ask that each Primary Care Trust be given its budget at the start of each year and instructed to spend it? There should be a system of checks and balances to ensure that they do not overspend and run out of money before the year is out and any underspend should be recycled to areas of the country where it is needed.

Maybe I am being naive, I don't know. But whilst there is plenty of micropolicy coming from the politicians on the detail of healthcare, I cannot see anyone saying how they will deal with what seems to be such a fundamental flaw in the system.