‘Rising concerns’ over NHS trusts' finances

by Naomi Rainey

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24 Jul 2014

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THERE IS "rising concern" over the financial resilience of NHS trusts, as more than a third of audit reports highlighted value for money concerns in 2013/14.

The Audit Commission published its review of 101 health bodies' accounts for the last financial year, noting the timeliness and quality of reporting improved. However, concerns were raised over economy, efficiency and effectiveness in 38% of trusts - up from a quarter in the previous year.

Of the 98 acute trusts, ambulance trusts, community trusts and mental health trusts subject to value for money arrangements conclusions, 37 received "non-standard" statements that flagged issues around its use and security of resources, up from 26 last year. In ten trusts, the auditor was "not satisfied that the body made proper arrangements" for assets. A further 27 trusts were found to have "one or more specific weaknesses" in relation to resources.

One of the main reasons for qualified accounts was failure to meet the statutory breakeven duty for 2013/14, for which 19 trusts were referred to the Department of Health. The setting of deficit budgets for 2014/15, failing to meet cost improvement programme targets and a reliance on cash support for the trust's operational activity were also prominent areas of concern.

Audit Commission controller of audit Marcine Waterman said: "This year auditors are reporting concerns about the financial resilience of a third of NHS trusts compared with a quarter last year.

"This level of reporting is worrying and reflects the increasing risks to the financial sustainability of individual NHS trusts, as they continue to face sizeable financial pressures due to a rising demand for services and the necessary focus on quality of care, whilst balancing the need for continued cost savings."

Last year, EY became the first administrator to be appointed to a foundation hospital, after failings were uncovered at Mid Staffordshire NHS Foundation Trust.

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