30 April 2004
The growing number of NHS bodies failing to balance their books is undermining the financial stability of the health service in England, the National Audit Office said this week.
In its report of the health service accounts for 2002/03, the NAO found that 8.4% (51) of the 607 NHS organisations had significant deficits, compared with 5% (31) in the previous year. In total, 71 organisations, 12%, were in deficit when less serious shortfalls were taken into account.
However, surpluses elsewhere meant the service was in financial balance overall and reported a relatively small underspend of £96m (on a total budget of £46.7bn) in a year when financial meltdown had been widely predicted.
But while the overall position was sound, the finances of individual organisations were increasingly troubled. Three primary care trusts and seven acute trusts reported in-year deficits of more than £5m, while six trusts reported cumulative debts of more than £10m.
North Bristol Trust recorded the highest cumulative deficit of £48.8m, due to 'poor financial management and ineffective corporate governance procedures', the NAO said.
NAO head Sir John Bourn said: 'I am concerned by the variation in financial performance and the large deficits incurred by some NHS bodies. Such deficits may put at risk the achievement of overall financial balance of the health service if they are not matched by surpluses elsewhere in the NHS.'
Commons' Public Accounts Committee chair Edward Leigh said trusts must take action to get out of the red. 'Once trusts run up large cumulative deficits for whatever reason, I fail to see how they can generate big enough surpluses in future years to wipe out those deficits without, in so doing, giving their patients reduced levels of health care,' he added.
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