16 June 2006
Mental health trusts are more likely to break even than acute hospitals but they must strengthen their financial management, the Audit Commission said this week.
Despite facing similar cost structures and pay pressures, the percentage of mental health trusts failing to break even had fallen below 5% – while in acute trusts this had risen above 40%.
However, this positive picture masked problems in financial management, including the quality and availability of data needed to make sound financial decisions.
In its report Managing finances in mental health: a review to support improvement and best practice, the commission said primary care trust spending on mental health varied widely and most PCTs did not have the information required to understand the financial implications of current and proposed policies and treatments.
It said the anticipated slower growth in spending, the move to foundation status and the more transparent commissioning regime under payment by results would place further demands on mental health trust and PCT information systems.
They had a chance to develop these systems as payment by results is not due to be implemented across all mental health activity until 2009.
Andy McKeon, the commission's managing director for health, said mental health trusts could build on a solid financial base.
But he added: 'There are weaknesses in data, partnership arrangements, information flows and in systems that ensure delivery of value for money.
'These need to be addressed if mental health trusts and their commissioners are to meet the challenges they face, including achieving foundation trust status.'
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