NHS trusts fail finance standards

Both NHS trusts have run up multi-million pound debts

Two debt-laden NHS bodies in North and East Yorkshire have failed to reach minimum standards in managing finances, an Audit Commission report has said.

Scarborough and North East Yorkshire NHS Trust and North Yorkshire and York Primary Care Trust (PCT) are among 20 in England to be deemed "inadequate".

The Audit Commission said: "Poor financial management can put services for patients at risk."

Both trusts said they were taking steps to wipe out their huge debts.

Audit Commission chairman Michael O'Higgins said: "Auditors have shown that many NHS bodies are now responding well to financial challenges and this local evaluation is helping to drive improvement.

"However, pockets of real concern remain.

"Poor financial management can put services for patients at risk.

"Patients and the public deserve better from the poor performers, who must learn from the strong performers."

'Firm action'

The North Yorkshire PCT warned in March that it was unlikely to meet a target to pay off its £19m debt by the end of this financial year.

Responding to the Audit Commission report, chief executive Janet Soo-Chung said: "Due to our inherited financial deficit, we are unable to achieve an overall score any higher than 1 [below minimum requirements].

"In the last financial year, we achieved a surplus of £13m which has helped to reduce our financial debt.

A long legacy of financial difficulties will inevitably take time to resolve John Scampion, interim finance director at Scarborough NHS Trust

"We are currently taking firm action to achieve financial balance at the end of this year [March 2009] and be debt-free going into next year."

In 2007, the Scarborough and North East Yorkshire Trust's £20m debt was set aside by the Department for Health to allow it to get its annual budget on an even keel.

In June this year, three senior managers at the trust quit their posts after years of wrangling over budget cuts and the running of hospitals.

Chief executive Iain McInnes resigned less than two years into the job, while finance director Sandy Hogg and non-executive director for auditing Jason Brine also left their posts.

Christine Green, the chief executive of Tameside Hospital Foundation NHS Trust, has since taken over on an "interim" basis.

Interim director of finance John Scampion said: "This report has come as no surprise to the trust.

"Many people will be aware of the severe financial difficulties which faced us last year and in previous years.

"A long legacy of financial difficulties will inevitably take time to resolve."

Despite that the trust achieved financial balance last year, he said.

"Going forward, our priority is to achieve long-term financial robustness.

"Our board is committed to achieving this.

"We know that a sound financial baseline is vital for the trust and our aim is to achieve a financial surplus again this year."