NHS given financial clean bill of health

Reuters - Thursday, October 2 12:27 am

LONDON (Reuters) - The National Health Service was given a relatively clean bill of financial health on Thursday as the Audit Commission said only three percent of NHS trusts and primary care trusts (PCT) had failed to balance their books.

The Commission said good financial management had enabled half of the 302 NHS trusts and PCTs to perform well or strongly, enabling them to improve services for patients, with 93 percent of them exceeding minimum standards for the use of resources.

In the past the NHS's financial position has provided ammunition for critics of the Labour Party, notably when it suffered two years of deficits -- 221 million pounds in 2004-05 and 547 million the following financial year.

Those deficits were blamed on a range of factors including financial mismanagement and higher than expected spending on salaries and drugs.

"The improvements in the way that NHS trusts and PCTs have managed their money in the past year are impressive," Michael O'Higgins, the chairman of the Audit Commission, said in a statement.

"Financial management in the health service had been in poor shape, but better use of resources locally has made a difference.

"Auditors have shown that many NHS bodies are now responding well to financial challenges and this local evaluation is helping to drive improvement."

However, the Audit Commission's report did raise concerns over 20 NHS bodies that had failed to reach minimum financial standards, of which 12 had failed to meet minimum standards in each of the last three years' audits.

One of those bodies -- Barking, Havering and Redbridge Hospitals NHS Trust in east London -- failed to meet minimum standards in any of the five areas the Audit Commission used for its assessment.

"Pockets of real concern remain," said O'Higgins. "Poor financial management can put services for patients at risk.

"Patients and the public deserve better from the poor performers, who must learn from the strong performers. And we should be seeing a lot more than only 14 NHS bodies performing strongly in their use of resources."

While London had the highest proportion of NHS bodies performing strongly, it also had the highest proportion failing to meet minimum financial standards.

Elsewhere, the North West Strategic Health Authority gained the highest average score overall, while the Yorkshire and Humber Strategic Health Authority scored the lowest on average.

(Reporting by John Joseph; Editing by Luke Baker)

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