BusinessCompany NewsPublic sector reform will ‘end in tears’

Public sector reform will 'end in tears'

The head of the Audit Commission has hit out at government plans to strip the watchdog of powers to oversee the finances of new public sector bodies.

Link: Shaky foundations for audit?

James Strachan said plans to devolve decision-making powers and budgetary freedom to frontline organisations such as foundation hospitals and primary care trusts could ‘end in tears’ because they are not ready for the new responsibilities.

Instead of relying on its star-rating system to judge whether hospitals are ready to take on foundation status, the government should be carrying out rigorous assessments of individual trusts’ leadership, management and capacity, he said.

Strachan claims that key functions such as financial audits and checks that public funds are delivering value for money should be left with bodies that have performed them well in the past such as the Audit Commission and the National Audit Office.

He highlighted the fact that the Audit Commission, which traditional scrutinised the accounts of NHS bodies, would lose its function for foundation hospitals and that, allowing them to employ private sector accountants to the job would not guarantee value for money.

The Commission is due to publish a report next week on whether hospitals given the top-ranking three-star rating for waiting lists and cleanliness are capable of making the grade as foundation trusts.

Strachan said that there was a danger that the government was moving ‘from one extreme to the other far too quickly and too indiscriminately’ in trying to use new structures to deliver health and other public services.

The star system ‘was not designed to decide whether something should become a foundation hospital’, he warned.

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