Inspection and Regulation

10.01.19

‘Don’t cry when things go wrong’: NAO finds ‘unacceptable’ levels of financial weakness across NHS

Four in 10 NHS organisations don’t have a grip on their spending according to a damning report from the National Audit Office (NAO) which found that the number of bodies with significant financial weaknesses is unacceptably high.

The NAO has studied the financial statements of nearly 937 local health authorities, councils, and local police and fire bodies, which it reports are responsible for a total of net revenue spending every year.

Whitehall’s spending watchdog said the number of NHS bodies and local government bodies with “significant weaknesses in their arrangements for delivering value for money for taxpayers is unacceptably high and increasing.”

Auditors found that 38% of local NHS bodies in 2017-18 produced financial statements which caused them concern, up from 29% two years ago.

Whilst NHS hospital trusts reported the worst financial performances, there was an alarming drop in financial wellbeing at CCGs, with the number of poor performers more than tripling in the last two years.

The number of bodies with significant weaknesses has increased to 208, up 4%, and the NAO’s head, Sir Amyas Morse, stated he was “shocked at the persistent high level of qualified audit report at local public bodies.”

“A qualification is a judgement that something is seriously wrong, but despite these continued warnings, the number of bodies receiving qualifications is trending upwards,” he said.

“Let us hear no cries of ‘where were the auditors?’ when things go wrong. The answer will be ‘they did the job, but you weren’t listening.’

“This is not good enough; local bodies need to address their weaknesses, and departments across government should ensure they are challenging local bodies to demonstrate how they are responding.”

The NAO’s warning comes in the wake of the NHS’s £20.5bn long-term plan published on Monday, which targets saving an extra 500,000 lives a year while one initiative will also see the 30 worst financially performing NHS trusts subject to new regulations from NHS Improvement.

The auditor’s report said that given increasing financial and demand pressures, local bodies must take prompt and effective action to improve performance and strengthen financial arrangements where issues have been raised.

It stated that with the proportion of bodies with insufficient plans or had significant weaknesses in their governance was not only too high, but posed a risk to public money and undermines confidence in the management of local services.

Image credit - Marbury

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