IN A devastating report published yesterday on the NHS crisis, the Public Accounts Committee of MPs revealed that 34 NHS trusts are broke.
The report – ‘Department of Health: Securing the future financial sustainability of the NHS’ – reveals that the NHS put to one side a £2bn surplus, while allowing the 34 organisations – nearly one in 12 – to fail to balance their books in 2011-12.
One trust – South London Healthcare – has already been put into administration, with a report published on Monday recommending mass sackings, A&E closures and that the trust be dissolved.
The report says keeping control of finances is going to get more difficult as the government’s £20bn NHS cuts regime proceeds and warns that the introduction of clinical commissioning groups – GP-led private businesses that will take charge of the NHS budget next year – will lead to short-term decisions, making problems worse.
The report also criticised the impact of the private finance initiative (PFI).
Public Accounts Committee Chairman, Margaret Hodge MP, said: ‘The Department of Health could not explain to us how it will deal with an NHS trust that goes bankrupt.
‘Nor could it provide reassurance that financial problems would not damage the quality of care or equality of access to all citizens, wherever they live.
‘The overall surplus of £2.1 billion across all NHS bodies in 2011-12 masks the fact that a significant minority are in financial difficulty.
‘In London, two trusts have a combined deficit of £115 million, one of which, South London Healthcare NHS Trust, has been placed in special administration.
‘On top of that, the NHS is striving to make efficiency savings worth £20 billion while undergoing a major reform of the system.
‘Up to now financial problems have often been hidden, with struggling trusts being bailed out through additional financial support from the NHS and the Department.
‘The Department could not explain to us what would trigger a trust being placed into the failure regime or exactly how the process would work.
‘We do not know whether a bankrupt trust would be allowed to fail or how and when ministers would intervene.
‘And it is not clear how the Department would ensure that essential services are protected if a trust fails.
‘It very much looks like the Department is inventing rules and processes on the hoof rather than anticipating problems and establishing risk protocols.
‘We are particularly concerned that the financial viability of a number of trusts is being undermined by the fact that they are locked into unaffordable PFI contracts.
‘It is unclear how the Department will continue to underwrite payments once most of the money moves to the NHS Commissioning Board.’
