Audit Commission

The financial performance of NHS trusts and primary care trusts (PCTs) in England is good overall and improving, the Audit Commission reports today (1 October).

The Auditors' Local Evaluation (ALE) scores for NHS trusts and new Use of Resources (UoR) assessment for PCTs show that only a handful of trusts have failed to meet minimum standards this year. Most NHS trusts are performing well with a few reaching the highest rating, but even have failed to meet minimum standards overall during the past four years. (NHS foundation trusts are not assessed by the Audit Commission.)

PCTs have responded well to a new and more demanding assessment although none was given an 'excellent' rating this year. (See notes and view full report.)

Andy McKeon, the Audit Commission's Managing Director of Health, said:
'These are financially uncertain times and with an expected budgetary squeeze on the horizon it's reassuring that most NHS trusts and PCTs have got better at managing their money. But the detail also shows that there is room for improvement, particularly if future pressures to maintain quality of service and improve productivity are to be met.

'There is also a handful of hospitals that must act urgently to reach minimum standards in the way they budget and spend, but the overall financial picture for the NHS in England shows a year-on-year improvement.'

In detail the report shows that while NHS trusts are good and getting better at the way they manage their budgets, many are not as good at financial planning for the future or at getting the most out of their buildings and equipment. PCTs could also do more to improve the productivity of the community services they provide.

In 2008/09, auditors assessed England's 152 PCTs under a new and more demanding UoR regime. The assessment considers how they manage their finances, workforce and assets to deliver value for money, and how they govern themselves. Eight PCTs failed to meet minimum standards in one or more parts of this assessment.

The NHS in England reported a surplus of £1.74 billion last year, up from £1.67 billion in 2007/8, which is about 2 per cent of total NHS spending.

Notes for editors

• Primary Care Trusts (PCTs) are in charge of primary care and commission all secondary care (hospital) services. They also provide community services such as district nursing. They are now at the centre of the NHS and control 80 per cent of the NHS budget. They are local organisations and they oversee 29,000 GPs and 18,000 NHS dentists.
• Acute NHS trusts and mental health NHS trusts oversee 1,600 NHS hospitals and specialist care centres. Emergency vehicles are provided by the NHS ambulance services trusts. There are 11 ambulance trusts in England.
• The ALE for NHS trusts and the UoR assessments for PCTs are two distinct assessments with different focuses which assess different areas. The two are not comparable. Likewise, the new UoR assessment for PCTs is in its first year and cannot be compared with previous years' PCT assessments under ALE.
• The Use of Resources results are a building block in the new Comprehensive Area Assessment to be published in December. The Care Quality Commission, Ofsted, the Audit Commission and the police, probation and prisons inspectorates are preparing a joint judgement on the quality of public services in England's 152 local areas, geared to public opinion surveys and the needs and priorities of different places.
• Nine NHS trusts in England were unable to meet minimum standards in 2008/09 (seven in London, one in the North West and one in South Central). Of those nine, seven (in bold) have failed to meet minimum standards overall in each of the four years of the ALE assessment - this is largely due to long-standing financial issues; six of the seven are in London.
  
  Barking, Havering and Redbridge Hospitals NHS Trust
  Bromley Hospitals NHS Trust
  Buckinghamshire Hospitals NHS Trust
  North West London Hospitals NHS Trust
  Queen Elizabeth Hospital NHS Trust
  Queen Mary's Sidcup NHS Trust
  Trafford Healthcare NHS Trust
  West Middlesex University Hospital NHS Trust
  Whipps Cross University Hospital NHS Trust
  
  Note: Those in bold have been at minimum standards for four consecutive years. Those not in bold are at minimum standards this year.
• Six NHS trusts and one PCT failed to achieve financial balance in 2008/09:

• Auditors assessing NHS bodies as performing well or strongly documented the notable practices at these organisations that set them apart from other organisations. The Audit Commission will be making all of these case studies available at www.audit-commission.gov.uk/health/goodpractice and through local auditors. These case studies are a valuable source of information that can help organisations to improve and to learn from the successes of others.
• The ALE and UoR assessments are two financial elements of the Care Quality Commission (external link) annual health check.
• NHS foundation trusts are assessed by Monitor (external link).
• The Audit Commission is an independent watchdog, driving economy, efficiency and effectiveness in local public services to deliver better outcomes for everyone.
• Our work across local government, health, housing, community safety and fire and rescue services means that we have a unique perspective. We promote value for money for taxpayers, auditing the £200 billion spent by 11,000 local public bodies.
• As a force for improvement, we work in partnership to assess local public services and make practical recommendations for promoting a better quality of life for local people.

For further information, please contact

Nigel Watts
Media Relations Manager
Tel: 020 7166 2129 or 07813 315538
Email: nigel-watts@audit-commission.gov.uk