NHS shows £1.5bn surplus but quarter of trusts have weak financial arrangements

BMJ 2011; 343 doi: (Published 11 August 2011) Cite this as: BMJ 2011;343:d5183
  1. Adrian O’Dowd
  1. 1London

The NHS in England made a surplus of £1.5bn (€1.7bn; $2.4bn) last year, but around a quarter of acute trusts have been rated as having weak financial arrangements, according to a report from the national public spending watchdog.

An Audit Commission report published on 11 August says that trusts managed to make savings through a combination of improving clinical productivity—including managing demand, reducing length of stay, moving to day case surgery or outpatient treatments, and bed closures—and reducing workforce costs.

Substantial savings came from the 7274 redundancies and resignations in the financial year 2010-11 from NHS organisations, most of which were management posts.

The report, NHS financial year 2010/11, analyses the accounts of all primary care trusts, strategic health authorities, and NHS trusts (acute and mental health) for the past financial year and looks at auditors’ conclusions on the value for money arrangements within each organisation.

Of 276 organisations studied, all except nine balanced their books, but some organisations needed financial help to do so.

Around a quarter (24%) of NHS trusts and 12% of primary care trusts received “qualified” value for money conclusions, meaning that auditors identified notable weaknesses in their financial arrangements and/or challenged how they secured efficiency.

The report warns that although there was a healthy financial performance in 2010-11 pressure on trusts to meet efficiency targets continue.

The report shows there were 7274 “terminations” of posts during 2010-11, saving around £289m. Most of these redundancies and resignations came from primary care trusts (5492), a few from health authorities (221), and 1561 from NHS trusts.

Andy McKeon, managing director of health at the commission, said, “It is impressive that the NHS overall performed so well financially last year, even if some organisations struggled. But there is no room for complacency.

“Tighter funding, and the need to continue to improve services and implement reforms will make the next three years much tougher. NHS organisations will need to make a determined effort to find further recurrent savings while continuing to deliver high quality services.”

The NHS Confederation, which represents most NHS organisations, welcomed the results but said pressure would tighten in the next few years.

Confederation deputy director of policy Jo Webber said: “These figures show that many NHS leaders have got their organisations on a strong footing to achieve the £20bn savings required of them. But they are worried that this could be the calm before the storm.”

The confederation surveyed 287 chief executive/chairs across the NHS in June and found that 42% said the financial situation facing their organisation was “the worst they had ever experienced,” and an additional 47% said it was “very serious.”

“With tighter finances, it will be harder to maintain the progress we have made on the quality of care and getting our books in order,” added Ms Webber. “It will require NHS trusts and commissioners to look at doing things differently, and more efficiently.”


Cite this as: BMJ 2011;343:d5183


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