14.12.12
Financial failure of trusts not ‘inevitable’ – NHS Confederation
The process of administration for NHS trusts should be seen as a last resort, rather than as an inevitable consequence of financial difficulties, a new report suggests.
The NHS Confederation calls for the wider NHS to work with Monitor to prevent trusts sliding towards a “financial cliff edge”.
The report details essential measures to support commissioners and providers at an early stage: make the most of available funding to improve services for patients and value for money for taxpayers; set up a strategic change fund to make use of money stored in financial risk pools and money left unspent from budgets; and encourage and support commissioners and providers in their attempts to transform local services.
Where there is a credible plan to change services to improve quality and sustainability of services, investment should be available to cover some of the upfront costs.
The licensing system must be geared towards preventing failure rather than creating a system that only considers necessary action after failure, and failure of a provider should be considered as a failure of the wider system.
Additionally there must be a fair playing field for all providers, and competition should not be pursued for its own sake, the report says.
Mike Farrar, NHS Confederation chief executive, said: “Our members have told us the financial problems they face are very rarely confined to the management of their trust. Very often their problems are compounded by the way the wider local health economy works, or as a result of sustained efficiency targets which have impacted on some trusts yet failed to produce the incentives for health system transformation.
“We need financial investment that acts as a long-term incentive to create sustainable services in the right place for patients, not a short-term bail out that is seen as the easy way out.
“The wider solution lies in planning change, and developing a system that rewards trusts for successfully helping to manage demand in primary and community services.
“Monitor’s role will be crucial in allowing trusts to make the necessary changes to ensure they remain viable. We must make sure it is set up to be fleet of foot to support and guide trusts through significant financial challenges. It is absolutely right that it oversees a fully transparent and accountable process.”
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