HC 73-I, First Report of Session 2006-07, Volume I, Report Together with Formal Minutes
- House of Commons Health Committee
- TSO (The Stationery Office)
The NHS has been in overall defict for the last two years and there has been an increase in the number of NHS organisations with a deficit. This report, 'NHS Deficits (HC 73-I)', highlights the role of: the funding formula; poor central management; and poor local management. Some of the worst deficits can be explained by exceptionally difficult circumstances such as large inherited debts. The funding formula allocates considerably more money per head to some Primary Care Trusts (PCTs) than others. This may be related to the scale of health inequalities but it can make financial balance harder to achieve.
Poor central management has included the Government's unrealistic estimates of the costs of the Agenda for Change and the new GP and consultant contracts. Some targets have also been expensive to meet. At the local level, there is much evidence of poor financial management, exacerbated by Government repeated policy changes and emphasis on meeting targets at short notice. Whilst overall the NHS is expected to be in surplus by the end of March 2007, many recovery plans that have been put in place by trusts in debt are unsatisfactory, and it is unlikely that the trusts with the biggest deficits will be able to repay their accumulated debts within five years.
The Committee also notes that the reductions in workforce budget and training and education have been the main contribution to reducing deficits, and see that as having adverse effects on staff morale and development, and this could affect the quality of the workforce. The report draws a number of lessons relating to the accounting regime, financial management in local NHS organisations, and the Department of Health.
|Format||Paperback||Published||13 Dec 2006|
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