There has been no serious effort to match spending to the hail of targets

Published: 07/03/2002, Volume II2, No. 5795 Page 19

It is almost spring, and that familiar sound is echoing throughout the NHS once again: alarm bells. Yes, as the end of the financial year approaches, finance directors are issuing warnings that deficits are burgeoning, and balancing the books looks difficult if not downright impossible in places. Service and financial frameworks are being jolted seriously awry. The problem affects most of England, not just the South East; and it is impinging on a variety of organisations, not just teaching hospitals, though they have particular challenges. This may be the brave new era of modernisation, yet it is just like the old days - the NHS is on the brink of another financial crisis.

But the classic health service dilemma comes with a couple of twists this time. First, of course, is the inescapable fact that the NHS's settlement for the current year - and next - stands at an unprecedented level, well beyond the wildest dreams of finance directors in the dark ages of the 1990s. And yet still there is 'not enough money in the system'.

Which brings us to the second twist: the presence in that same system of a myriad of targets - an integral feature of modernisation - all soaking up their share of the recordbreaking resources.

These targets are the government's chosen instrument for bringing about change, yet they are wreaking mayhem on the service - in more than merely financial ways. We also report this week how delegates at a conference disclosed the 'perverse behaviour' that the effort to meet targets is provoking, and the collateral damage to morale which is part of the process. As the plethora of targets has unleashed demands which outstrip even the increased resources, it has become self-defeating. Some finance directors report that certain targets will be missed, including a few stamped 'must do'.

At the root of the problem lies the fact that the NHS plan was never properly costed.

Its hail of targets - and many more since - was followed by a hail of cash, but without any serious effort to match one to the other. No-one knew for sure if what looked at first like Treasury largesse would be enough. Now we know it wasn't.

Classic NHS solutions to the classic funding shortfall are to fall back on 'efficiency' savings and/or to employ a little creative accountancy (often one and the same). But thankfully, the more honest and transparent SAFF process makes this difficult. The alternative classic solution is to cut in the most vulnerable places, usually mental health and IT. We hope that doesn't happen, though we fear it may.

The real solution would be yet more money from the April Budget. Messrs Blair and Brown, please note.