06 June 2003
Two hospitals on the government's short list to become foundation trusts this autumn are the subject of 'serious' financial and managerial concerns at the Audit Commission, it was revealed this week.
Public Finance has learned that two three-star hospitals described as 'needing support' in the watchdog's critical report on the ten-year NHS Plan, published on June 5, are currently being considered by ministers for flagship foundation status.
Audit Commission health director Peter Wilkinson refused to name the hospitals for fear of starting a 'witch hunt', but he has informed the Department of Health.
A source at the commission later confirmed that both are on the short list of 29 hospitals that have applied for foundation status. 'There are some pretty serious financial and management concerns regarding these two,' the source said.
Wilkinson said auditors had raised concerns about the two hospitals after stringent checks on their management had been carried out as part of the research on the ten-year plan, the government's blueprint for the future NHS.
The report, Achieving the NHS Plan, says that the NHS's overall progress towards meeting the core targets that make up the Plan has been good. But auditors claimed 'the system is not working universally well'.
In particular, they conclude that 'some trusts which have achieved three stars and could apply for freedoms as NHS foundation trusts, were judged…to have significant management weaknesses.'
Foundation status can be granted only to hospitals with a three-star rating from the Department of Health, which ministers claim reflect accurately an organisation's managerial and financial competence. It will provide hospitals with freedom from Whitehall interference, including the ability to borrow on the private markets.
But the commission's assessments expose the two three-star hospitals as 'needing support' to meet their targets under the Plan and indicate that they are unlikely to achieve basic benchmarks.
There are also 'lesser' concerns about other two and three-star trusts, Wilkinson confirmed.
He claimed the commission and the department could have reached different conclusions about the financial and managerial capability of these hospitals because they use different criteria to assess them.
But Nigel Crisp, chief executive of the NHS, indicated that the department would be reluctant to act on the commission's concerns. He dismissed the study as a mere 'snapshot', claiming that 'in most cases the NHS has moved on'.
Crisp also reiterated the government's belief that 'three-star trusts have already demonstrated a sound financial position'.
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