FDs give NHS reform warning

NHS finance directors have reiterated their warning that the government’s health service reforms could lead to financial instability despite a 3% rise in health authority allocations for next year.

The Healthcare Financial Management Association welcomed health secretary Frank Dobson’s announcement of an increase, which it believes will cover existing cost pressures on the system. But chairman Jaki Meekings warned the money must be ‘applied prudently’ if health authorities are to maximise its benefits.

‘Authorities face potential financial instability as the new NHS reforms are implemented and the need to reserve adequate funds to underpin a stable regime in 1999/2000 for all sectors in the NHS must be a priority,’ Meekings said.

The HFMA responded as health minister Alan Milburn announced a ‘wide-ranging’ review of the NHS cash allocation formula. Changes to the formula will mean more money for health authorities with large ethnic minority populations and for authorities with younger populations.

But Milburn said there would be a freeze on any further changes in the existing system until 2002, the end of the period covered by the comprehensive spending review.

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