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Deal With It When It Happens – The NHS Approach To Financial Failures?



Recent reports have indicated that financial problem areas within the NHS appear to be dealt with on an ‘as it comes’ style approach and concerns have been raised around the inadequate assurances that trust can maintain good quality care during problem periods. Further to this, MPs believe that the reforms getting introduced next year could in fact make the situation worse. This news comes as a number of NHS institutions are struggling with debt problems across England.

It has been commented by MPs that while the NHS finished last year with a surplus of £2bn overall, this figure actually masks a number of problems developing at several NHS trusts. According to a report, nearly one in 12 failed to balance their accounts in the 2011-12 financial period. This number is significantly higher than the previous year and would have been even higher if bailouts had not been provided by the Department of Health and local health chiefs.

Despite the number of growing concerns in the NHS, MPs weren’t clear what would prompt action within an NHS trust with severe financial concerns and how it’s vital services would continue during this phase. The Public Accounts Committee said that there were no clear rules or thresholds that would trigger such action – the South London Healthcare trust has already been put into administration, a move which will result in a radical reorganization of services across the area.

The committee feels like these occurrences help to highlight that it appears the Department of Health are creating rules and processes as they go, rather than trying to anticipate problems and have plans in place for when these occur. Maintaining control over finances is only going to get more difficult as the NHS is in the process of making £20bn worth of cost savings. Further, the introduction of the clinical commissioning groups that will take charge of the NHS budget from next year – something the committee feels may lead to short-term decision making that could lead to long term problems.

Mike Farrar, chief executive of the NHS Confederation, agreed that greater clarity is needed for dealing with financial failure. It needs to be accepted that financial difficulties are the biggest concern facing the NHS currently and that these cannot be dealt with in a piecemeal fashion. Short term solutions are not the answer to these problems and action needs to be taken before a crisis point is reached.

Lord Howe, the Health Minister denies that the problems experienced are anywhere on the level that they are being described, stating that the financial health of the institution is robust. He also stated that the government is working with the NHS trusts and regulators to ensure that if financial problems occur they will be dealt with properly.