News / Commission targets medium-term planning

The Audit Commission has urged primary care trusts to improve their medium-term financial planning as a means to meet government surplus targets and to ensure these funds are invested well.

The commission said the auditors’ local evaluation assessments in 2007 showed medium-term financial planning (plans for between three and five years) was a significant weakness for a number of PCTs, particularly those that had been restructured in 2006/07.

When assessed against key line of enquiry 2.1, which examines medium-term financial plans, 21% of all PCTs (30% of newly created PCTs) were shown to be inadequate.

In a briefing on medium-term planning issued last month the commission said that PCTs would come under increasing pressure to demonstrate they had robust medium-term financial plans. Improving medium-term financial planning (right) said it was likely the Darzi review would lead to some strategic change, while PCTs would be expected to deliver more services at a time of slowing growth. Medium-term plans were needed to deliver this.

In 2008/09 each strategic health authority area must plan for a surplus equivalent to its 2007/08 total. ‘This will require good financial planning; first to ensure that the surplus is delivered, and second to ensure that it is then subsequently reinvested in delivering high-quality patient care,’ the document added.

However, the briefing cautioned that medium-term planning should not be approached with the intention of fixing funding, expenditure and activity for three years.

‘The purpose of medium-term financial planning is to ensure that, at all times, the organisation is thinking ahead about where new investment is required, how activity will increase or decrease and which new policies or targets will affect the organisation,’ added the briefing.

Improving medium-term financial planning includes a 10-step programme to assist PCTs in the preparation of the plans.


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