The Pharmaceutical Journal
Vol 279 No 7475 p462
27 October 2007

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Third of NHS has cash trouble

One in three NHS bodies remains in poor financial health, even though NHS finances have now moved out of deficit as a whole, the Audit Commission revealed this week.

The Audit Commission assessed NHS trusts and primary care trusts across England on their financial management. It found that steps taken by the Department of Health and NHS bodies had generally been successful and that, overall, the NHS recovered from a deficit of £547m in 2005–06 to a surplus of £515m for 2006–07.

Nonetheless, 31 per cent of trusts failed to meet minimum requirements relating to use of resources.

Steve Bundred, chief executive of the Audit Commission, warned that there was a “worrying gap” between the top performers and those still failing to balance their books. “The NHS needs to focus urgently on the management of this small group of NHS bodies that are failing across the board,” he said.

The Audit Commission’s analysis also revealed the impact of last year’s NHS reorganisation. This was associated with short-term costs of £192m. The Audit Commission says the NHS will have to show that this investment will produce savings in the medium to long term.

The commission also found that NHS bodies that were not involved in the reorganisation tended to perform better financially: only 7 per cent of newly merged bodies performed well or strongly.