NHS ‘in position to complete financial reform’

The Department of Health (DoH) has announced that as a result of improvements in its financial performance over the last 12 months, the NHS is now poised and ready for financial reform.

Following recommendations regarding budgeting rules for NHS trusts recommended by the Audit Commission, the DoH commented that the financial administration of the health service would become more transparent and fair.

The commission had stated that existing rules overly penalised overspending trusts by both forcing repayment of debt and lowering the next year’s income for the trust.

David Nicholson, NHS executive, said: “We have now introduced a system that ensures fairness, transparency and responsibility, a system that is fit for the future.”

He added that as a result of the new system, organisations would be fully aware of both their annual financial performance and the consequences of decisions made at a managerial level.

Though overspending trusts will still have to manage their spending, repay loans and recover deficits under the new system, the DoH states that the process will for the first time be clear and transparent.

Last month, chief executive of NHS South West Sir Ian Carruthers outlined a number of recommendations for the improvement of NHS services to the chief executives of strategic health authorities following his review.