03 October 2008
Financial management in the NHS has improved significantly over the past year, with trusts staying within budgets and delivering greater value for money, the Audit Commission has said.
The third annual Auditors' Local Evaluation, published on October 2, found that 93% of trusts in England met or exceeded minimum standards in their use of resources.
But 20 of the 302 NHS bodies audited failed to meet these standards overall. Of these, 12 had failed to improve their overall financial performance in the past three years. They include Bromley Hospitals NHS Trust (see below), North West Hospitals NHS Trust, Trafford Healthcare NHS Trust and Worcestershire Mental Health Partnership.
They were described as 'pockets of real concern' by Audit Commission chair Michael O'Higgins. He told Public Finance they were not 'static', but improvements had not been significant enough to move them into a higher category.
The continued general improvement, with 14 trusts receiving the highest overall score in the evaluation, is largely attributed to a 'return to financial balance', and comes two years after a widespread reconfiguration of NHS organisations.
O'Higgins said: 'It is generally pretty positive. There is continued improvement, in the context of this evaluation covering all the NHS trusts but not foundation trusts. So those meant to be higher performers have already been taken out of the system.'
He said the ALE showed examples of trusts that had turned around poor performance and made a big impact on provision, citing Sandwell Primary Care Trust in the West Midlands, which had been overspending but was now forecasting a surplus.
'By getting the financial position under control, they have created headroom for themselves to take initiatives to improve the health of people living in the community,' he said.
'In their case, they're focused on respiratory services. By investing £1.25m and better clinical engagement with practice-based commissioning, they've managed to reduce hospital admissions for those conditions by nearly 40%.'
O'Higgins dismissed the idea that financial targets could divert attention from health care needs as 'an excuse given by weak managers'. It would have been disappointing, he said, if increased investment in the NHS had not made it easier for trusts to improve their financial standing scores.
However, he said trusts were also improving in other areas.
'What I think has become clear to most organisations in the health service – and to the large majority of clinicians as well – is that this isn't just about balancing the books,' he told PF. 'You can't run an effective health system, or any other big organisation, unless you get financial management right.'
PFoct2008
