Published: 07/11/2002, Volume II2, No. 5830 Page 4 5

Disparities in the cost of providing services across acute trusts have dramatically narrowed, according to figures from the Department of Health.

The National Schedule of Reference Costs shows that the variation in the cost of services at acute trusts has fallen by 46 per cent since last year. That means 88 per cent of acute trusts are now within plus-or-minus 20 per cent of the national average. In contrast, the range of prices for primary care trusts has doubled, with one PCT - Southend - apparently providing services at four times the national average cost. The DoH stressed that such figures reflect the ‘embryonic’ nature of PCTs.

The annual schedule will become even more crucial to trusts as the government phases in the introduction of its ‘payment by results’ financial system next year, which will mean trusts are paid a fixed tariff price for services.

Those with reference costs above the tariff face losing money for the activity they carry out, and those with costs below the tariff will be able to reinvest their ‘profits’ in service development.

In a year, Dartford and Gravesham trust’s reference costs have fallen from 14 per cent above the average to 7 per cent above it.

New finance director Brian Shipley said the trust’s£177m private finance initiative scheme has so far affected the trust’s ability to lower the figures further.

But he said: ‘We are currently renegotiating the [PFI] contract so we are expecting the figure to come down even further.’

www. doh. gov. uk/nhsexec/ refcosts. htm