Health authority budgets 'raided' to pay off deficits

PCTs and hospitals are cutting training budgets and ‘soft targets' such as mental and public health services to pay off deficits, MPs have warned.

A Commons Health Select Committee investigation found ‘compelling evidence’ of failing financial management at all levels of the NHS.

At DoH level, estimates of the cost of new staff contracts, including new GMS, Agenda for Change and the consultants’ deal were ‘hopelessly unrealistic’.

Independent sector treatment centres, PFI projects and targets such as four-hour A&E waits were expensive and had ‘unintended consequences’ the report says.

Some PCT and hospital deficits may have been compounded by inconsistencies in the NHS funding formula, but ‘few’ deficits can be explained by historical factors.

The report blames poor local management: ‘Surpluses can be found in trusts with low per capita funding and deficits in trusts with high per capita funding.’

The report calls for the DoH to set a time limit on the practice of ‘top-slicing’ PCT budgets to create contingency funds.
MPs also expressed surprise that the NHS had no ‘failure strategy’ for struggling trusts. The report called for a set threshold to trigger immediate DoH intervention to prevent trusts sinking into debt.

It also criticised plans set out earlier this week by NHS chief executive David Nicholson for the establishment of a surplus. The report said this suggested an ac-ceptance that some trusts would always fail to balance the books.

BMA chairman Mr James Johnson said: ‘Too many health authorities are raiding training budgets as a quick fix to their financial problems. This is both demoralising to staff and extremely risky.

‘If doctors can’t go on courses essential to their training, and academic posts are lost, there will be real consequences for patient care.’

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