A government watchdog has called for changes to NHS Executive guidance in the wake of its investigation into the controversial hospital reconfiguration in Edgware.

Commons public accounts committee chair David Davis MP has written to Barnet community health council revealing the results of the National Audit Office inquiry. He was first asked to investigate by Barnet CHC in September 1999.

Mr Davis' letter says that a 1998 report by Finnamore Management Consultants had 'provided a good analysis of the weaknesses in the business plan' for the reconfiguration - which released savings of only£2.7m by 1997-98 despite an indication in the consultation plan that£11.7m would be saved by 1999-2000.

But he adds that 'while the Finnamore report has had local impact, there is scope for greater impact more widely in the NHS'.

Guidance on public consultation processes 'might benefit from a more explicit emphasis on sound financial and technical assessment', while the NHS's Capital Investment Manual - also being updated - could 'include explicit references to the typical processes and types of problem' arising from service change programmes.

Mr Davis' letter says that the comptroller and auditor general will write to NHS chief executive Nigel Crisp to 'emphasise the importance' of ensuring that revised guidelines 'take clear account of the lessons drawn in the Finnamore report and are brought out quickly'.

The NAO also found that 'there are no systems in place within the NHS Executive to ensure that aspects of consultation plans of possible national importance are referred to it'.

The comptroller and auditor general would suggest the establishment of a 'regional clearing house arrangement' to sift 'exceptional' case study reports for possible reference to the NHS Executive, Mr Davis writes.

Former Barnet CHC chair Elizabeth Manero, now chair of London Health Link, welcomed the NAO findings.

'To promise a community huge savings from a deeply unpopular A&E closure and actually deliver none, means that there are insufficient checks and balances in the system, ' she said.

The NHS now had an organisational 'memory' on adverse clinical incidents, 'but we do not have a memory on management failures', she said.

She warned that the abolition of CHCs would mean there was no independent body 'to tackle this sort of thing'.