Weak controls and lack of interest led to £1bn NHS deficit

Weak financial controls have contributed to the £1bn deficit in the NHS, and
was not solely down to its controversial resource accounting regime, the
government accounting watchdog has said.

Accounts Committee’s
report in NHS financial management says a
number of reasons have led to the parlous financial state of the health system,
including weak financial control and a lack of interest from clinicians in
financial matters.

PAC chairman Edward
added that problems with resource accounting, where budgets
deficits are carried over into the next financial year, were just a part of the
overall picture.

‘Individual bodies in deficit tend to stay in deficit. In some cases because
of the rules governing deficit recovery, but in many I do not doubt, it is a
consequence of weak control of finances and a lack of interest by clinicians in
financial matters,’ said Leigh.

NHS’ financial reporting
must be more transparent to prevent deficits begin hidden, he added.

The report stated it was too early to judge the strategy of implementing
turnaround plans by struggling NHS trusts, which often involved business
recovery services from the Big Four, but there were instances of successful

The NHS has created its own turnaround office to centrally manage trusts’
turnaround programmes.

Support is provided by a turnaround director, while lessons learned are
shared among trust FDs through a quarterly newsletter.

The NHS appointments commission has also begun giving financial training to
board members.

Further reading:

NHS deficit accounting faces surprise axe

Government promises to fix NHS accounting

Unhealthy method harms NHS

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