The committee also criticised cash draining away through clinical negligence, with outstanding liabilities that could total £2.8bn, and fraud, with losses on prescriptions alone running at £150m a year.
MPs also called for greater efficiency – with chairman David Davis pointing to a potential for enormous efficiency gains, complaining unit costs of treatment could be slashed by 12% if every trust improved performance to match the best.
Financial management was the first concern listed in the committee’s report on the 1997-8 NHS Summarised Accounts. They said: ‘The challenges facing the NHS are immense and they cannot afford to handicap themselves by tolerating anything other than the highest standards of financial management.
‘We found too much evidence that the service’s financial affairs had not been handled well.
‘They must do better than this, by developing their staff’s skills or bringing in more external expertise.’
Three chief executives have lost their jobs over the past two years because of concerns over their financial stewardship, and three chairmen have been asked to resign.
But the MPs said difficulties suggested a lack of planning or insight and ‘where this is the case, we think it only right that the future employment of those accountable – the chairmen and chief executives of the health authorities and NHS trusts concerned – should be reviewed.’
The committee said that at the end of 1998, 19 authorities and 50 trusts were experiencing serious financial problems, but this was a ‘significant improvement’ on nine months earlier.
Department of health
Public accounts committee