23 April 2004
Auditors this week questioned the financial stability of up to 60% of NHS local delivery plans drawn up by health agencies – throwing the sector's ability to deliver the government's flagship NHS Plan into doubt.
But the Department of Health moved quickly to reassure managers that it would offer 'challenged' institutions 'more intensive and frequent contact' with specialists to prevent problems escalating.
The Audit Commission's study, published on April 20, outlines fears that LDPs compiled by many primary care trusts and strategic health authorities are 'weak' and 'unrealistic'.
Andy McKeon, the commission's managing director for health, claimed that many finance plans are poor because the NHS still faces a shortage of trained finance experts.
While he denied this amounted to a potential 'meltdown' of activities aimed at delivering the Plan, he warned that many LDPs would 'have to change'.
Currently, the concerns cast 'doubt on NHS bodies' ability to deliver the services they have planned,' his report warns.
The warning over LDPs forms part of the commission's wider study of NHS financial management. Achieving first-class financial management in the NHS outlines challenges the sector faces if it is to make full use of the £40bn injection of extra cash by 2008.
While the report claims that general controls across the NHS are good, the current period of 'unprecedented change' is likely to leave many organisations struggling.
McKeon cites five key threats: the introduction of the new payment by results system of provision; new contracts for all NHS employees from this year; the introduction of foundation trusts; increasing patient choice; and the roll-out of a massive IT programme.
The commission said the situation is made worse by auditors' concerns over the financial state of 34% of PCTs and 21% of SHAs. Ominously, McKeon's team warn that the number of organisations causing concern is likely to rise next year.
As well as offering increased contact with struggling organisations, a spokesman for the DoH said the Modernisation Agency had been established specifically to work with NHS organisations to ensure they deliver their plans.