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Last Updated: Monday, 22 October 2007, 23:06 GMT 00:06 UK
NHS finances improving but patchy
Ward work
104 NHS trusts and PCTs showed inadequate performance
Nearly one-third of NHS bodies are still in the red despite marked improvements in NHS finances, according to a new report.

The Audit Commission's 2006/07 review found 31% of NHS trusts and primary care showed "inadequate performance", compared with 39% in 2005/06.

Many of these had been subjected to mergers under the government's reorganisation of the NHS.

The Department of Health said it was working with the failing authorities.

Room for improvement

Almost one in 10 (8% of trusts and PCTs, or 27 of the 335 total) scored poorly on use of resources but also on financial management, financial standing and value for money.

A total of 27% of trusts and PCTs performed well or strongly on use of resources - up from 12% in 2005/06.

Trusts that fail to manage their money well are unlikely to be doing their best for patients
Steve Bundred, chief executive of the Audit Commission

A total of 77% of NHS bodies achieved year-end financial balance in 2006/07, compared with 67% in 2005/06.

Recent figures issued by the Department of Health show 22 organisations are forecasting they will fail to achieve financial balance in 2007/08, compared to 81 in 2006/07, says the report.

The Department of Health is forecasting an aggregate surplus of 983m at the end of the financial year.

The NHS ended 2005/06 547m in deficit, but made a small surplus of 515m in 2006/07 .

Worrying gap

Steve Bundred, chief executive of the Audit Commission, said: "The NHS is no longer in deficit, which is good news for patients and for taxpayers.

"Managing money well goes hand-in-hand with providing better patient care. Trusts that fail to manage their money well are unlikely to be doing their best for patients."

He said there was a "worrying gap" between the top performers and those still failing to meet their duty to balance their books.

"A number of NHS bodies are failing to manage their finances adequately and there appears little hope that they can get out of trouble by themselves," Mr Bundred added.

"The NHS needs to focus urgently on the management of this small group of NHS bodies that are failing across the board."

Nigel Edwards, of the NHS Confederation, said: "Most political parties recognise that further NHS reorganisation would be counter-productive.

"This report provides stark evidence of the cost of reorganisations. In future we must be crystal clear about the benefits before embarking so quickly on such large scale structural change."

A Department of Health spokeswoman said: "The NHS has come a long way over the last year to improve its finances - tackling deep-rooted problems and putting better transparency and rigour in the system.

"But there is room for further improvement. A small number of organisations continue to face significant financial challenges and we are working with Strategic Health Authorities to improve their financial performance."

Liberal Democrat Shadow Health Secretary, Norman Lamb MP, said: "The NHS is clearly not out of the woods. There is still a hardcore of trusts failing to manage their finances on all fronts.

"These Trusts have not been helped by recent government reorganisations, the final cost of which we have yet to see."

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09 Oct 07 |  Health

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