English health authorities fight back from financial brink

6 May 99
The English NHS is slowly hauling itself back into the black but a significant number of health authorities and trusts are still in serious financial difficulties, according to the National Audit Office.

07 May 1999

Sir John Bourn, the Comptroller and Auditor General, reported this week that 48 of the 100 health authorities were in the red in 1997/98, compared with 72 in 1996/97. Together, authorities owed £8m – £230m less than the previous year; 149 of the 425 NHS trusts had a combined debt of £104m.

The NHS Executive said 29 health authorities and 78 trusts were in serious difficulty at the end of 1997/98 but the situation was improving. By December 1998, those with debts of more than £1m or 1% of turnover had fallen to 19 health authorities and 50 trusts. Trusts' forecast deficit for 1998/99 is now £52m.

However, Sir John highlighted some underlying problems caused by long-term debts and liabilities. At the end of 1997/98, health authorities had an accumulated deficit of £717m.

Clinical negligence continues to be a problem. The NHS has disclosed total potential future liabilities of £1.8bn but Sir John estimated that cases that have not yet been reported could add another £1bn.

Although the number of health authorities and trusts with serious financial difficulties is falling, ministers and managers will be concerned that the same names keep cropping up each year. Health authorities such as East London and the City, Lewisham and Leeds claim their poor financial standing is a result of years of underfunding and chronic local health problems.


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