News / Final audits find NHS ‘mostly in good shape’

The NHS is in good financial shape to face the economic squeeze to come, but problems persist at a small proportion of NHS bodies, the Audit Commission said as it published its final auditor’s local evaluation (ALE) and use of resources (UOR) scores.

The assessments demonstrated financial performance was ‘mostly encouraging’ and had improved. ALE scores showed 74% of trusts performed well or strongly in 2009/10, compared with 69% in 2008/09 and 16% in the first ALE in 2005/06. The UOR assessment found that 75% of PCTs performed above minimum requirements in managing their finances – it was 53% in 2008/09, when a tougher assessment was introduced.

Seven NHS trusts had the lowest overall scores, compared with 86 in 2005/06, and there are 11 top scorers as against two in 2005/06. The number of highest and lowest scoring trusts was the same as in 2008/09. Many top scorers since 2005/06 have gone on to be foundation trusts and outside the commission’s audit regime.

Auditors found improvement across the five key themes in ALE, though it highlighted areas for improvement, such as improving asset management and poor control over staff costs in the financial management theme.

Six PCTs recorded the lowest score in the managing finances theme of UOR (compared with two in 2008/09). Only Bromley hit the top score. But PCTs generally improved their scores in this theme – none got the top score in 2008/09. Also, 75% scored above minimum requirements (level 3 and above) in 2009/10, compared with 53% in the previous year.

The report covered the audit of the 2009/10 strategic health authority, PCT and NHS trust accounts. This showed a £1.5bn aggregate surplus, while 10 of the 260 bodies (six trusts and four PCTs) failed to achieve financial balance. There was no difference between draft and final accounts, which the commission’s managing director, health, Andy McKeon, described as ‘a real achievement’.

He said the NHS was mostly in good shape. ‘Improving services with less money during a period of change will be a tough challenge, but the assessments show clear signs of sustained improvement in financial management in most NHS trusts and PCTs,' he said.