Financial failures probed at one in five NHS bodies

The number of NHS trusts examined by KPMG for poor financial management soared more than 50% above original expectations, information released to Accountancy Age has revealed.

It is now known that KPMG investigated financial problems at 81 health bodies, which is nearly a fifth of all NHS organisations, in just two weeks in December.

Turnaround teams from the firm had been widely reported to be investigating the financial management at around 50 trusts, after health secretary Patricia Hewitt revealed that NHS finances were approaching a £1bn deficit for 2005/06.

But a Freedom of Information request to the Department of Health by Accountancy Age revealed that KPMG delved into the financial affairs of 81 NHS trusts, primary care trusts and stategic health authorities over two weeks before Christmas by
undertaking ‘baseline assessments’, led by partner Alistair Groom and DoH’s Richard Gleave.

Andrew Lansley, Conservative shadow health secretary, said: ‘The scale of the problem is obviously larger than we were originally led to believe.’

Lansley also said it ‘beggars belief’ that the turnaround teams would have discovered any new information behind the financial plight of the trusts. ‘What is the point of Strategic Health Authorities if consultants are being sent in to do their job?’ he said.

He criticised the lack of information available to the public regarding trusts’ financial controls.

‘Taxpayers are footing the bill for information we should already have ­ information such as financial controls, and implementing processes for greater efficiency,’ Lansley said.

A CIMA spokeswoman said the institute had, ‘like other financial bodies known for some time of a worsening NHS financial position’, of which some had been caused by ‘poor financial management locally’.

Concerns over the mismanagement of NHS finances have been highlighted since the revelation of the extent of the deficits, which led NHS chief executive Sir Nigel Crisp to call the problem ‘unacceptable’, and ‘damaging’ to the reputation and ability of the NHS to plan.

Other organisations working with the public sector have also expressed concern. Independent think-tank the King’s Fund has called for a ‘failure regime’ to come into effect if a trust fails to either meet financial targets or achieve agreed patient care.
However, it defends some financial managers within the NHS, claiming that hospitals’ financial problems ‘are not always the result of inefficiency or financial mismanagement’.

KPMG and the DoH were unable to comment.