Page 46 - Pharmacy Appeals 1/4/04 to 31/3/05

22 Performance summary

Financial summary
The costs of claims arising from incidents occurring in As we expect to make payments on clinical negligence
2021/22 was estimated to be £13.3 billion for CNST, claims over the lifetime of claimants' lives, which
an increase from the £7.9 billion reported in 2020/21. will be many years into the future, these discount
This increase is mainly due to the change in the HM rates can have a significant effect on the value of the
Treasury discount rates referred to above. However, we provision. However, this is an accounting adjustment
have also allowed for an increase in claims volumes as and does not affect the underlying amount that will
clinical activity has increased since 2020/21 compared be paid out to settle claims in the short term.
to the previous year. As a consequence, without the
effect of the discount rate change, we estimate that
the annual cost of harm would have been £8.7 billion.
The other factors affecting the value of
In 2021/22, our clinical schemes underspent by £224
the provision largely offset each other,
million against budget (compared with £430 million
but it is worth noting the main trends:
in 2020/21), of which £222 million this year was in
respect of CNST. Expenditure on CNST increased by 7% • The provision across all schemes increased
from 2020/21, primarily on high value claims, but the due to expected claims from another
volume and value of claims settlements was lower than year's worth of activity by £8.5 billion.
assumed in the budget, resulting in the underspend.
• Our expectations of long term inflation
Our provision increased by 51 % or £43.3 billion to have reduced again. However, this
£128.6 billion. Almost all of this is due to the reductions has been partially offset by increases
in the HM Treasury long term and very long term discount in shortterm inflation rates.
rates. These discount rates are applied to the amounts
More information about the changes in
expected to be paid out to settle claims in the future in
the value of the provision and budgetary
order to give a value in the accounts at today's prices.
performance can be found in the
Finance report at pages 55 to 63.