Published: 11/08/2005, Volume II5, No. 5967 Page 6

An external auditor's report has raised serious concerns about the ability of a primary care trust's managers to put together a recovery plan to address a projected overspend of nearly£13m. And it says that the PCT is unlikely to be able to operate within revenue resource limits without additional financial support.

One-star Hounslow PCT in north west London inherited a£4.1m deficit when it was established in 2002 but has since overspent for three consecutive years. As a result, the Audit Commission instigated a public interest report into the trust's finances.

The commission found that the PCT has been unable to agree a balanced budget for 2005-06 and that the projected deficit for the year would be£12.8m.

While the PCT has made some cost savings and continues to make cuts in expenditure, the commission says it has been 'unable to contain its secondary healthcare commissioning activity which is a key driver to its overspending'.

PCT chief executive John James said it had delivered over£8m worth of savings on directly managed services since 2002, but that had not been enough to cope with the 'ever-increasing demand for hospital services'.

Mr James said the PCT's two-year recovery plan involves working with the strategic health authority, NHS providers, GPs and patients with the aim of reducing hospital activity.

He added: 'Finance remains the biggest single challenge facing us as a PCT. It is one we take very seriously and one we are working hard to address.'