NHS trusts show 'inadequate financial performance'
A third of NHS trusts are facing financial difficulty, a report from the Audit Commission finds today.
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Tuesday, 23, Oct 2007 12:00
Nearly a third of NHS and primary care trusts display an "inadequate financial performance" according to the Audit Commission.
The review of the NHS Financial Year 2006/07 shows NHS finances have "improved markedly" with many trusts moving from an overall deficit of £547 million to a surplus of £515 million.
However, 31 per cent have scored poorly for their finances – compared with 39 per cent last year.
A total of 27 trusts – eight per cent – failed across all three key areas of financial management, financial standing and value for money.
Some 27 per cent of trusts were in the top two categories performing well or strongly in their use of resources, up from 12 per cent last year.
Chief executive of the Audit Commission, Steve Bundred, said: "The NHS is no longer in deficit, which is good news for patients and for taxpayers. Managing money well goes hand in hand with providing better patient care
"There is a worrying gap between the top performers and those still failing to meet their duty to balance their books.
"We are concerned about the variation of financial performance across the country. A number of NHS bodies are failing to manage their finances adequately and there appears little hope that they can get out of trouble by themselves."
Mr Bundred added the NHS needed to focus urgently on the management of the small group of NHS bodies that are failing across the board.
The review also showed the short-term costs of reorganisation and trust mergers stood at £192 million, and newly merged bodies performed worse than those not subject to a merger.
Responding to the figures the NHS Confederation said action plans were in place to aid trusts that were continuing to fail, but further reorganisations should not be introduced.
Nigel Edwards, policy director of the NHS Confederation, said: "Most political parties recognise that further NHS reorganisation would be counter-productive.
"This report provides stark evidence of the cost of reorganisations. In future we must be crystal clear about the benefits before embarking so quickly on such large scale structural
change."
He added: "There are also a number of trusts that continue to face financial difficulties. Action plans are in place to deal with the complex problems they face.
"These will be especially important following on from the pre-Budget report and comprehensive spending review which make some really challenging assumptions on efficiency improvements."