New blow for NHS.

The government’s health crisis worsened last week – and not all of it was due to the flu virus and interpretations of what amounts to a guarantee when it comes to spending commitments. The Commons Public Accounts Committee joined the row with a contribution of its own. This time the cause was financial management and the MPs had a very simple solution to what it saw as a new bug afflicting the service. The committee urged ministers to sack more NHS chairmen and chief executives whose health authorities or trusts get into financial difficulties. They urged a tougher crackdown after complaining that the crisis-hit service needs better financial management. 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 1997/99 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. But the MPs’ call did nothing to win over managers themselves. Tom Jones, ACCA spokesman on health issues, hit back at suggestions that more NHS managers should be sacked if their authorities get into financial difficulties. Jones, director of consultants MJM Healthcare Solutions said: ‘It’s better to support than sack them. ‘The more important and much more constructive model is to make sure mechanisms are in place to support chief executives.’ Jones said there was more room in the health service to make efficiencies but added it would require massive investment in information systems. Returning to the threat facing senior health service managers he said: ‘To have this sword of Damocles hanging over them is not a very good idea. ‘What you have to ask is, is this motivating?’