Government will not bail out trusts in difficulty, minister says
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NHS trusts in financial trouble will no longer be bailed out by the government, the health secretary, John Reid, told the parliamentary select committee on health last week.
Mr Reid said that "deficits would lie where they occur," unlike in previous times. "In the past we would take money from elsewhere, but that just means that somewhere else a patient has to wait longer in pain."
During the House of Commons Health Committee抯 inquiry into annual public expenditure he said that the way the government had handed out money to ailing trusts had "lacked rigour."
Mr Reid told the committee that trusts had a responsibility to run services for local people but that they also had to answer to the taxpayer. "Our approach is that we must not undermine or detract from the responsibility taken by local management," he said.
Trusts in financial difficulty can seek advice and assistance from bodies such as the Modernisation Agency and their local strategic health authority. Trusts could apply to the NHS Bank for financial help, but that would not be a routine measure. If necessary trusts in deficit should make changes in their management.
Mr Reid said that increased transparency about the conduct of individual trusts had led to better traceability of money, giving a more realistic picture. In 2002/3 the number of acute trusts in deficit was 50, along with 21 primary care trusts. In 2003/4 these numbers increased to 67 and 41.
During questioning about new commissioning arrangements for GPs announced last month Mr Reid denied that the arrangements were a return to GP fundholding. Fundholding GPs held their own budgets and negotiated prices of operations with hospitals. From April 2005 primary care trusts will give GP practices indicative budgets.
Mr Reid said the two schemes had important differences. Savings made by GP fundholders did not have to be spent on care of patients but would have to be under the new arrangement. Fundholding GPs had also been free to choose the cheapest care, but that would not be the case with practice based commissioning. Under the new system GPs were going to have to consider quality as well as price.
"This is not a return to fundholding. GPs are best placed to indicate levels of appropriate commissioning to PCTs ," he said.
Mr Reid added that it may be possible for smaller primary care trusts to merge—a practice currently discouraged—to reduce overheads and bureaucracy, as long as the local dimension was maintained.(London Kathryn Godfrey)
Mr Reid said that "deficits would lie where they occur," unlike in previous times. "In the past we would take money from elsewhere, but that just means that somewhere else a patient has to wait longer in pain."
During the House of Commons Health Committee抯 inquiry into annual public expenditure he said that the way the government had handed out money to ailing trusts had "lacked rigour."
Mr Reid told the committee that trusts had a responsibility to run services for local people but that they also had to answer to the taxpayer. "Our approach is that we must not undermine or detract from the responsibility taken by local management," he said.
Trusts in financial difficulty can seek advice and assistance from bodies such as the Modernisation Agency and their local strategic health authority. Trusts could apply to the NHS Bank for financial help, but that would not be a routine measure. If necessary trusts in deficit should make changes in their management.
Mr Reid said that increased transparency about the conduct of individual trusts had led to better traceability of money, giving a more realistic picture. In 2002/3 the number of acute trusts in deficit was 50, along with 21 primary care trusts. In 2003/4 these numbers increased to 67 and 41.
During questioning about new commissioning arrangements for GPs announced last month Mr Reid denied that the arrangements were a return to GP fundholding. Fundholding GPs held their own budgets and negotiated prices of operations with hospitals. From April 2005 primary care trusts will give GP practices indicative budgets.
Mr Reid said the two schemes had important differences. Savings made by GP fundholders did not have to be spent on care of patients but would have to be under the new arrangement. Fundholding GPs had also been free to choose the cheapest care, but that would not be the case with practice based commissioning. Under the new system GPs were going to have to consider quality as well as price.
"This is not a return to fundholding. GPs are best placed to indicate levels of appropriate commissioning to PCTs ," he said.
Mr Reid added that it may be possible for smaller primary care trusts to merge—a practice currently discouraged—to reduce overheads and bureaucracy, as long as the local dimension was maintained.(London Kathryn Godfrey)