‘Only change in rules will save hospitals’

The government must change its accounting policies in relation to NHS
hospitals or risk an increase in deficits, ward closures and redundancies, the
public spending watchdog, the Audit Commission has warned.

The commission’s report urged Whitehall to abandon an attempt to treat NHS
trusts as if they were government departments as it does under the Treasury’s
system of Resource Accounting and Budgeting (RAB).

The commission said double-counting methods used with other government
departments did not make sense when applied to NHS hospitals, which, it said,
operated more like businesses competing to attract patients, The

Sir Michael Lyons, the commission’s acting chairman, said: ‘The principles of
RAB should no longer be applied to NHS trusts.’

Sir Michael urged the Department of Health to set up ‘a national buffer
fund’, which could be used to repay the Treasury if the NHS as a whole

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