Cash crisis for trusts

More Health Trusts Facing Money Problems

The NAO report shows that 47 of the 433 trusts in England are facing problems. Another 121 are said to have "underlying financial difficulties" but are taking steps to bring their shortfalls under control.

The report warns that some trusts could be forced to make redundancies, management changes or even merge with other trusts.

The key factors for failing funds are said to be unrealistic planning, poor management, lack of funding for services and increased emergency admissions.

Patient care could suffer

Sir John Bourn, head of the National Audit Office, says he is "concerned" about the number of trusts who have failed their financial duties. But he welcomes the efforts of the eight regional NHS executive offices who are working with trusts to help identify solutions or make organisational changes.

The chief executive of the NHS Confederation, Philip Hunt, said: "These figures don't come as a surprise. They confirm the serious financial position that has faced the NHS since the start of the financial year, and we are seeing further pressure on our services and lots of emergency admission pressures."

He told BBC Radio 4's Today programme that although he agreed efficiency was important, "overall, even well-run hospitals, community trusts and health authorities are suffering under this pressure at the moment".

He said the £1.2 billion extra granted to the Health Service in the Budget for next year would "give us some breathing space to restructure the debt over a longer time period".

Philip Hunt: not surprised

"We're under tremendous pressure"

He was particularly interested in the variations of clinical performance now evident in the NHS, which he said must be tackled.

"In the long term, the Government's funding review should look at this in a very dispassionate way. But I'm convinced it will show that we are an extraordinarily cost-effective service and it then follows that we are worth sensible, strong investment over the next decade."

The figures are part of the annual report by the National Audit Office on National Health Service spending.

This year for the first time the report includes figures on the cost of clinical negligence cases. It reveals that during 1995/6, negligence cases cost health authorities and trusts £200 million. This figure is expected to rise by 25% a year over the next five years.

Trusts have set aside £80 million for negligence cases already going through but identified that these could cost up to a further £1.6 billion. Cases of medical negligence where a claim has not yet been made could cost another £1 billion.