[Skip to content]

Public Finance logo

News and expert comment on public policy and finance

Public Finance Google plus Public Finance Facebook Public Finance Twitter Public Finance YouTube

Quarter of NHS trusts under financial stress says Audit Commission

By Mark Smulian | 25 July 2013

Auditors have raised concerns about the financial resilience of a quarter of NHS hospital trusts.

Auditors have raised concerns about the financial resilience of a quarter of NHS hospital trusts.
Photo: iStock

The Audit Commission said the health bodies were strong on financial reporting, and gave an unqualified audit opinion to all but three of the 265 examined.

Today’s Auditing the Accounts 2012/13: NHS Bodies reported the findings of the commission’s appointed auditors at NHS trusts, excluding foundation trusts, as well as primary care trusts and strategic health authorities in their final year of existence. These bodies were abolished in April and replaced by Clinical Commissioning Groups, led by GPs, following government reforms.

The commission’s examination covered the timeliness and quality of accounts, arrangements to secure value for money and the extent to which auditors utilised their statutory reporting powers.

Unqualified audit opinions were given to all except one trust and two PCTs, where auditors were not yet able to issue an opinion.

Controller of audit Marcine Waterman said NHS bodies had closed their accounts and reported their final position just 10 weeks after the financial year.

‘With no qualified audit opinions issued, and only three opinions outstanding, it’s commendable, especially during operational and structural change to the NHS,’ she added.

Waterman added that there could be challenges in auditing next year’s accounts as the commission was aware of difficulties in identifying opening balances for the new Clinical Commissioning Groups.

However, auditors issued a qualified conclusion on value for money for 26 out of 100 NHS hospital trusts, 25 of which were because of concerns that the hospitals are under financial stress.

The main cause of concern was trusts failing to meet their statutory breakeven duty by either relying on financial support, setting deficit budgets or having gaps in plans to deliver sustainable cost improvement plans for 2013/14.

‘This year our auditors are concerned about the financial resilience of more NHS trusts,’ Waterman said.

‘This reflects the increased risks to the financial sustainability of individual bodies, pressured by the need to make financial savings, managing increased demand for services while improving patients’ quality of care.’

Six trusts were given adverse conclusions, meaning that auditors were not satisfied that they made proper arrangements to secure value for money.

These were: Barking, Havering and Redbridge University Hospitals; East Sussex Healthcare; North Cumbria University Hospitals; South London Healthcare; University Hospital of North Staffordshire; Wye Valley.

Four trusts were referred to the health secretary for failure to meet their statutory break-even duty. These were: East Sussex; George Eliot; South London Healthcare; University Hospital of North Staffordshire.

A further 20 trusts were warned over one or more specific weaknesses in their pursuit of value for money.

Share this article here:

CIPFA logo

» Indicates required fields

PF Update
Public sector news direct to your inbox
Are you a CIPFA member? »
PF Jobsite logo

Latest vacancies