Saturday, December 01, 2007

NHS financial turnaround - superficial or sustainable?

In the Public Finance website’s archive there is an interesting article (yes, really) on the state of the NHS’s finances. In “Surplus to requirements” Sally Gainsbury explores how the NHS has managed to turn a deficit of £547m into a surplus of £510m in one year.

The article looks at some of the most spectacular turnarounds in the performance of Primary Care Trusts.

These paragraphs give a good taste of the explanations:

In annual turnover terms, the biggest recovery was in Western Cheshire PCT. There, the provisional NHS accounts show a move from a £16.3m deficit in 2005/06 to a £4m surplus in 2006/07 – a turnaround of £20.3m, representing 6% of its annual turnover.

But monthly finance reports presented to the PCT’s board between April 2006 and May 2007 show that it received more than £33m in non-recurrent funds in the financial year 2006/07, all of which have been absorbed into its final income and expenditure account.

Other case studies are worryingly similar with one-off windfalls and the like.

Too often “efficiencies” and turnarounds throughout the public sector are a little too superficial.

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