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Last Updated: Monday, 10 July 2006, 23:24 GMT 00:24 UK
Are NHS managers really to blame?
By Nick Triggle
BBC News, health reporter

Money generic
The NHS finished last year over 500m in deficit
When the latest NHS deficits report landed on Health Secretary Patricia Hewitt's desk, a wry smile must have crossed her face.

For months she has been blaming the health service's inability to balance the books on bad management.

But NHS staff and opposition parties have been having none of it, pointing the finger of blame at reforms and bumper pay rises respectively.

The PFI scheme was a fast way to get a big hospital built, but a huge distraction for key people. The chief executive, finance director and chairman were always in London...
NHS trust clinical director

However, the Audit Commission's 56-page report is categorical.

It lays the blame squarely on the shoulders of management, saying "ineffective and inadequate" leadership had caused the problems in the worst cases.

The tone is set early on by a quote from an anonymous senior NHS trust official. "We were burying our heads in the sand.

"We knew we'd lost it but there was so much going on."

The report goes on to describe a litany of upheaval and poor management.

'Lost the plot'

One trust clinical director points out how managers lost the plot over a new building project.

"The PFI scheme was a fast way to get a big hospital built but a huge distraction for key people.

"The chief executive, finance director and chairman were always in London..."

And, in the dog-eat-dog world of the health service, others have been quick to use the findings to further their own interests.

The British Medical Association weighed in, saying managers needed to engage with doctors.

"Doctors know how new reforms work in practice and how they affect patients - they cannot be left out of the loop."

Is it bad management that has caused deficits to spiral in certain trusts or have the financial problems been the straw that broke the camels back?
John Appleby, of the King's Fund

Bill Moyes, executive chairman of Monitor, the foundation trusts regulator, called for... more regulation.

He said: "The findings support the case for the wider NHS adopting a financial reporting and compliance regime similar to that provided for foundation trusts."

But, as managers' body the NHS Confederation points out, the Audit Commission was just looking at 25 of the 556 trusts in England.

Last year, nearly a third of NHS organisations failed to balance the books and, while it is clear bad managers will be working in the NHS, can they be on the payroll of well over 150?

Pressures

In explaining the findings, Audit Commission chief executive Steve Bundred referred to financial pressures.

These include everything from the lack of economic flexibility - NHS bodies have to balance each year unlike businesses - to new bumper pay deals for doctors and nurses.

John Appleby, chief economist of the King's Fund health think-tank, believes the Audit Commission has taken an overly simplistic approach.

"This is the conundrum of the NHS deficits problem. Is it bad management that has caused deficits to spiral in certain trusts or have the financial problems been the straw that broke the camel's back?

"The answer is both. In some trusts you will find bad management and that is what the Audit Commission has found, but in others no amount of good management may have been able to save the day.

"You have to look at the wider picture, which means at a time of unprecedented change the health service is under many financial pressures. Some trust just can't balance."




SEE ALSO
Q&A: NHS deficits
06 Jun 06 |  Health

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