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NHS meets financial targets, but some trusts could do better
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     The NHS in England met its financial targets last year, but 71 NHS trusts exceeded their budgets and some are in serious financial difficulty, according to the government’s senior accountant.

    A total of ?3.5bn ($95bn, €79bn) was spent by 607 individual NHS organisations (28 strategic health authorities, 304 primary care trusts, and 275 NHS trusts). Taken together they underspent their budgets by ?6m, or 0.18% of total expenditure.

    The Department of Health "met its target of ensuring that financial balance was achieved in aggregate," writes John Bourn, comptroller and auditor general, in the National Audit Office’s report on NHS accounts for 2002-3, which was published last week.

    But he added: "I am concerned by the variation in financial performance and the large deficits incurred by some NHS bodies. Such deficits may put at risk the achievement of overall financial balance of the NHS if they are not matched by surpluses elsewhere in the NHS."

    The audit singled out North Bristol NHS Trust for particular criticism: "The example of North Bristol NHS Trust illustrates the impact of poor financial management and corporate governance procedures. In 2002-3, the Trust reported a deficit of ?4.6m, the largest deficit ever incurred by an NHS organisation . . . Where there are large and cumulative deficits, this represents a significant challenge to the individual bodies themselves."

    Steve Webster, director of finance at North Bristol NHS Trust, said the trust turned the corner in the next year. "We made ?6m savings last year and are confident we have reached break even," he said.

    The results for each organisation are stated after taking into account financial support from the health department, which uses both planned programmes and unplanned interventions to help NHS organisations achieve financial balance. The auditor general complained that these cash injections were not comprehensively reported in the accounts. Next year the department will restrict unplanned interventions, leaving surpluses and deficits to stand as they are.

    A health department spokesman said there are no sanctions against trusts that come in over budget, but "they will have to take steps to meet their financial obligations."

    * The report also shows that the NHS paid out some ?46m to settle clinical negligence claims in 2002-3, the same amount as in the previous year. Provisions for the probable future cost of clinical negligence within the NHS amounted to ?.89bn at 31 March 2003, an increase of ?40m since 31 March 2002. Of the ?.89bn, some ?70m is expected to be paid out in 2003-4.

    The Medical Defence Union, which provides indemnity insurance to over half of the United Kingdom’s doctors, said the figures lent support to last year’s call from the chief medical officer for a no fault compensation scheme for babies with brain damage, the largest cause of compensation payments.(London Owen Dyer)