17 October 2003
Labour's controversial plan to overhaul the NHS has placed hospital trusts at high financial risk – while police authorities, probation boards and local government are all blighted by poor internal controls, according to a damning report released this week.
Corporate governance: improvement and trust in local public services, a study by the Audit Commission, also claims that 'weak' performance management hinders the entire public sector.
High-profile failures across the sector, including the dereliction of social services duties in the Victoria Climbié case, the 2002 riots in Oldham and the controversy surrounding infant heart surgery at the Bristol Royal Infirmary, are all blamed on poor corporate governance in the October 14 report.
Commission chair James Strachan said that public sector financial risk, one element of corporate governance, 'is highest in the NHS' because hospital trusts are striving to meet strict targets under the government's NHS Plan.
Strachan's inspection team is concerned that the traditional separation of 'corporate' and 'clinical' governance at NHS trusts has led to a large degree of autonomy for consultants attempting to meet these targets.
While the upside has been 'improved patient care', the downside has been consultants' 'unwillingness to be held to account by managers and non-executives,' the report says. Commission inspectors believe this leads to financial risks.
When combined with poor information flows between personnel, it also 'creates the conditions in which severe malpractice can occur'. The commission cites 'the deliberate falsification of waiting list information' as an example.
Strachan later argued that the introduction of foundation trusts could further reduce NHS accountability and prudent governance.
The Department of Health denied that the targets left trusts unnecessarily vulnerable. But a spokeswoman said the commission's findings 'would be of interest to ministers'.
The NHS is not the only recipient of criticism. Police authorities face similar difficulties holding their chief constables to account, the commission argues.
The biggest problem is agreeing what is 'strategic' and 'operational' police policy, and poor-quality data again makes the job of police non-executives difficult.
Councils are criticised for failing to help non-executive members undertake their new scrutiny roles. The report claims 97 out of 150 top-tier authorities 'need to develop their work on scrutiny'.
Probation boards, meanwhile, are urged to improve communications and the co-ordination of local and national strategies.
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