NHS lurches into new financial year with old debts and new challenges
pharmafile | April 7, 2006 | News story | |Â Â Â
The NHS has begun a new financial year amid considerable acrimony and massive disruption as many of its trusts grapple with debts and pressure to reform services.
April not only marks the beginning of the service's new financial year but once again is the beginning of a new 12 month cycle of reform, which has become traditional under Labour.
The government has set targets across the NHS for reforms to be in place by the end of March 2007, from making practice-based commissioning universal among GPs, to extending the choice of hospitals for patients, and increasing the use of payments by results.
Perhaps most daunting of all is the major structural re-organisation in England of shrinking 303 PCTs down to just 120 and 160.
Such a massive reform programme would be daunting enough, but many trusts have the added pressure of heavy financial overspends hanging over them.
A total deficit of 720m pounds was built up across the service in 2005/6, and many of the worst affected trusts have postponed non-emergency operations and made redundancies. In the final weeks of March, 15 trusts announced plans to cut a total of 5,000 NHS jobs, with further redundancies and ward closures expected to follow.
The Department of Health is determined to see through its reform programme, and has deliberately put the squeeze on trusts in financial difficulty. Trusts will not only have to pay off their debts from last year, but will see the same amount again deducted from their budget allocation, as an incentive not to re-offend.
Against this background, disagreements have become acrimonious, with little agreement about where the blame lies for the crisis – but consensus that it must be solved before funding increases for the NHS level off in 2008.
One of the most outspoken – and yet ambiguous voices – has been Aidan Halligan, the director of clinical governance for the NHS in England. He hit out at the crisis saying: "We have learnt that throwing money at the problem only allows us to do more of what we have always done. Any suggestion of real reform has been a deceit."
Prof. Halligan made his remarks in the British Journal of Health Care Management, and seemed to be criticising politicians as equally as NHS managers and clinicians.
He said: "Targets have become an end rather than a means and, together with blinkered performance management, have distorted health care priorities," concluding that a 'leadership void' had caused it to lose its way.
In a move to end the in-fighting over the question of financial management, the government has asked Sir Michael Lyons, chairman of the Audit Commission to investigate whether Whitehall's accounting rules are hindering financial planning in the NHS.
Sir Michael is expected to publish his report in July on whether budget controls are sufficiently robust, transparent and independent of government.
Meanwhile a 900-strong group of doctors has called for an end to tax-based funding of the NHS. Doctors for Reform commissioned an ICM survey to back up its demands, which found that only 36% of all voters thought the politicians were right to rule out alternatives to the taxpayer-funded NHS, with 58% disagreeing.
Three-quarters of those surveyed also said politicians should be removed from day-to-day management of the health service.
