National figures for quarter three, published last month, record 71 PCTs in deficit. But NHS Confederation PCT network director David Stout said that once figures were adjusted to remove the effects of compulsory top-slicing of funds by strategic health authorities, just 29 were in debt. Overall, 80 per cent would have recorded a surplus.
If the impact of top-slicing was removed, PCTs would have recorded a net surplus of£405m - rather than the£793m deficit shown, he said. More than£1bn was taken out of PCT budgets this year via a national top-slice which created a£687m surplus with strategic health authorities.
Mr Stout said the way the figures were presented by the Department of Health was 'extremely unhelpful' and did unfair damage to the reputations of PCTs. He told HSJ: 'Really it implies that PCTs are not performing well. I am not denying that there are financial problems at some PCTs but the negative consequences of having the accounts shown in this way is that, to the public who will only see the headline figures, it looks as if PCTs don't have control of their finances.'
And he said it was even more unfair that many PCTs would lose out in their annual inspection ratings as a result.
'It will have a knock-on effect in the management of resources section of the annual healthcheck. All PCTs in deficit will automatically be rated at the bottom,' he said.
'I am not arguing that there should not be a top-slice. If every PCT spent all of its money and didn't deliver a surplus then the NHS will not achieve financial balance but the way it has been presented is extremely unhelpful. They should show the actual position with the money with the PCTs and not in the reserve account of SHAs. It wouldn't change the bottom line but it would be more realistic.'
In the DoH paper on the Q3 figures, finance director Richard Douglas said he believed SHAs would collectively be able to repay a proportion of the top-slice back to PCTs earlier than expected. He suggested that at least£300m - a quarter of this year's top-slice - could be returned 'as the financial position of the NHS becomes clearer'.
In an article written for hsj.co.uk, Mr Stout pointed out that there was no timescale attached to the return of top-sliced funds. And he said it was 'frustrating' that the impact of top-slicing was only discussed in the DoH analysis of quarterly figures, and not taken account of in the main presentation of figures.
Mr Stout said that in future PCTs should be allowed to decide how much of their budgets they should pass on to help overall balance.
'PCTs should be able to get to get together and decide how much money should be given to the SHA to ensure it is in balance. They should be agreeing for the future how much PCTs should be top-sliced. We need to change the mindset about whose money it is and how PCTs and SHAs interrelate,' he said.
He said he believed that the DoH is sympathetic to PCTs' plight.
NHS Alliance chief officer Mike Sobanja said top-slicing was not a long-term solution to managing NHS finances, as it penalises good performers: 'The financial figures distort the position of PCTs who are over-spending due to top-slicing.'
'It's punitive against those PCTs who are performing well and managing their budgets. Why should one population be subsidising another? It defeats the allocation principle. If the health service is going to break even and there is no longer brokerage then top-slicing is necessary but it is a short-term solution and cannot be sustained in the long term.'
The comments were made as PCT chief executives fought back against criticism from colleagues in the acute sector in an HSJ poll.
In last week's survey, acute trust chief executives criticised 'incompetent' commissioning and said PCT leaders did not receive the same level of blame as their acute peers when things go wrong. This week, PCT chief executives reveal their anger about the impact of repeated structural reorganisation.