Parliament warns on NHS underspend damage
More than one in five NHS organisations were still in deficit by the close of the 2006-07 financial year, despite the health service itself achieving surplus.
A study of NHS summarised accounts for 2006-07 by the public accounts committee found that although the health service delivered a£515m net surplus, 82 out of 372 NHS organisations had a deficit totalling£97m.
Eighty per cent of this deficit was held by 10 per cent of organisations.
The report warns that by producing large surpluses, the NHS risks being seen as under-delivering. For 2007-08 the NHS is forecasting a surplus of£1.8bn (see Auditors query PCT attempts to reduce last year's surplus).
Committee chair Edward Leigh said that although the Department of Health's performance in turning two years of increasing deficit into a surplus in 2006-07 was "very commendable", there was "unwelcome evidence that the NHS is not yet travelling along the road to long-term financial health".
"Bad financial management at local level can have significant consequences for patients: there is a clear link between the financial performance of a body and the quality of its clinical services," he said.
He added: "Large surpluses will prompt the question why this money could not have been used to deliver a higher level of healthcare."
The report reveals that in 2006-07, the surplus was concentrated in strategic health authorities while overall the deficit lay with primary care trusts, hospital trusts and mental health trusts.
It also questions whether financial balance was achieved through sustainable improvements in financial management. Top-slicing PCT budgets and diverting training spending meant some PCTs were forced to reduce or delay delivery against local priorities, it adds.
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Anonymous | 6-Jun-2008 8:49 pm
Enfield PCT was in financial deficit and reacted by dismissing public health staff, including a black consultant. As consequence the PCT is now less able to deliver public health priorities for its largely deprived population. An equitable health budget for Enfield area and proper oversight of this PCT’s re-organization from the center was lacking. When will politicians and NHS leaders recognize and address the disproportionate impact of NHS financial targets on deprived areas and on health staff from black and ethnic minority groups?
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