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Welfare reform on the Web (January 2007): National Health Service - Funding

DoH accepts “double deficit” argument, but no decision yet

HSJ Reporters

Health Service Journal, vol.116, Dec. 14th 2006, p.5

The Audit Commission has called for an end to the system by which acute trusts in deficit have to pay the money back twice over, in the form of a surplus to match the debt the following year. The government has delayed a decision on whether to scrap the system until the end of the financial year 2006/07. The decision will hinge on whether or not the NHS balances its books in April 2007.

For my next trick

S. Ward

Public Finance, Dec. 1st-7th 2006, p.20-23

The Health Secretary Patricia Hewitt is presiding over a review of the NHS “Payment by Results” scheme. The current scheme pays hospitals for the activities they carry out. It is likely that in future providers will be paid on the basis of both activity and the quality and efficiency of the care that they offer.

Revealed: the 13 bankrupt NHS trusts

J. Carvel

The Guardian, Dec. 11th 2006, p.1 + 6

At least a dozen hospitals in the UK are bankrupt and have accumulated deficits of £1.6bn due to overspending in 2001. No corrective action can enable these hospitals to meet their legal obligation to balance their books. The difficulties are attributed to mistakes made by the Department of Health (DoH) and the Treasury in 2001, when NHS trusts were put under a new accounting system known as Resource Accounting and Budgeting (RAB). Unrealistic Whitehall demands could not be met without damaging patient care so deficits spiralled. The DoH is now looking at exempting NHS trusts from the system.

(See also The Guardian, Dec. 12th 2006, p.13)

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