Mismanagement led to deficits13th December 2006
Poor management across the NHS has caused the health service's current financial crisis.
The government’s failure to accurately cost new staff pay deals also helped push the health service £547m into the red, says the Commons health select committee.
Moving the goal posts on performance targets created financial burdens, while staffing levels also increased beyond government plans, it found.
But members said local organisations should not escape their share of the blame and cited examples of poor trust management and failings in adequately monitoring spending or recruit key financial staff.
Changes in funding also unearthed hidden debts at a local level. The new rules state trusts cannot under spend on their capital investments to meet running costs.
MPs attacked the short-term measures introduced by the government to address the deficits and warned against shoring up debt by channelling money away from easy options like staff training, public health and mental health.
A new contingency fund has been set up to help failing trusts, but the committee said it should be considered a short-term measure, along with top slicing of PCT budgets.
The committee concluded some trusts may take up to five years to achieve financial balance, and recommended changes to the NHS accounting system.
The government defended its health service record, saying the NHS budget had doubled since 1997 and would almost triple by 2008, bringing UK healthcare spending up to the European average.
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