06 August 2004
The poor quality of financial management across local government and police, fire and health services is a cause for concern, the Audit Commission's annual report reveals this week.
The commission says its health auditors have dubbed 2002/03 one of the worst years they have seen.
Nearly a third of health bodies failed to deliver their accounts by the Department of Health's deadline. The majority of these were primary care trusts and strategic health authorities.
Local government is castigated for the 'number and significance of errors' in its accounts, with 19% resubmitted.
The commission also casts its eye over partnerships, which, after last week's announcement on local area agreements for councils, look likely to play a crucial role in future service delivery.
Auditors found that very few councils have formal agreements with partners specifying aims and objectives. These partnerships also lack 'processes for monitoring' and governance arrangements. In health, 30% of partnerships have similar shortcomings.
The commission also identifies an increase in overspends in the budgets of NHS trusts and councils in 2002/03. Overspends in NHS trusts were up two percentage points to 18%, while councils reported a four-point increase to 34%.
There were also problems with reserves: 14% of councils, 24% of police authorities and 61% of fire authorities failed to hold enough reserve cash in their budgets to plan for emergencies and 'unexpected financial events'.
The report, published on July 30, charts the commission's 'impact' on improving public services for the 17 months to March.
It also assesses its own impact, which, unsurprisingly, is positive. It cites success with Comprehensive Performance Assessments in councils and its responsibilities for housing inspections and in the fire services, with CPA due to begin there in January 2005.
Its finances also look healthy, with a surplus of £7.2m or 2.2% of its £331.3m operating income.
Commission chair James Strachan said: 'Through strategic regulation we aim to maximise our impact on improving public services, while minimising bureaucracy.'