"The NHS is continuing to improve financial control over its budget. I welcome this and the initiatives to measure and take action against fraud. "The way forward is to continue with improvements to corporate and clinical governance and to ensure that accounting for these large sums presents fully and clearly the financial position of NHS organisations."
"The NHS is continuing to improve financial control over its budget. I welcome this and the initiatives to measure and take action against fraud.
"The way forward is to continue with improvements to corporate and clinical governance and to ensure that accounting for these large sums presents fully and clearly the financial position of NHS organisations."
Sir John, 24 April 2002
Head of the National Audit Office Sir John Bourn has given an unqualified opinion on each of the 20 NHS summarised accounts, prepared by the Secretary of State for Health from the accounts for individual health organisations. Today’s report from the NAO draws attention to a number of issues, including overall financial performance, fraud in the NHS, clinical negligence liability and developments in accounting and internal control.
Overall financial performance of health authorities, Primary Care Trusts and NHS Trusts in 2000-2001
In 2000-01, all primary care trusts and health authorities achieved their statutory duty for net payments not to exceed their cash limits, and all but one health authority attained financial balance. The one exception, Bexley & Greenwich, recorded a small overspend of £0.9 million (0.3 per cent of its expenditure limit) in the period leading up to its merger with a neighbouring authority.
In accordance with the Department of Health’s definition of “break even”, none of the 356 NHS Trusts failed to meet their statutory financial duty to break even. Forty seven Trusts have had cumulative deficits since the beginning of April 1997 in excess of 0.5 per cent of income.
Thirty three NHS Trusts were assessed by the Department of Health as managing significant financial problems as at the end of March 2001, but this number was lower than in any of the three preceding years (1997-98: 78; 1998-99: 53; 1999-2000: 76).
Progress in countering fraud in the NHS
The NHS Counter Fraud Service’s fraud measurement exercise had so far measured £112 million of fraud, with another £81 million ‘at risk’ (representing the sum where it was not possible to establish that no risk of fraud existed). In respect of Pharmaceutical and Dental Patient Fraud the Service has measured a reduction in losses from £157 million to £99 million since 1999
(a 37 per cent reduction). Work was ongoing to measure fraud and sums ‘at risk’ across all main services in the NHS.
A range of initiatives were being pursued by the NHS Counter Fraud Service to tackle fraud in the NHS. The Service recovered over £4 million and achieved 30 successful prosecutions and 33 successful civil and disciplinary cases during 2000-2001.
As at March 2001, 484 cases of suspected fraud with an estimated value of £18.3 million had been reported to the NHS Counter Fraud Service. Since then, they had received reports of an additional 445 cases, with an estimated value of £17 million.
The reported total liability for clinical negligence continued to increase within the NHS, albeit at a reducing rate. The net present value of known and anticipated claims at the end of March 2001 stood at £4.4 billion, an increase of £0.5 billion over the previous year.
A key cause of this increase was increased legal awards to fund the costs of future care which therefore required a reassessment of the level of provisions needed.
Developments in accounting and internal control
Sir John noted the creation of Primary Care Trusts, with a separate summarised account of their activities. He also noted the progress achieved by the NHS in preparing applicable accounts in line with Treasury’s Resource Accounting Manual, and the extension of the remit of the Financial Reporting Advisory Board to oversee NHS Trust accounting from January 2002.
The appointed auditors of the underlying accounts were required to express an opinion on the regularity of the expenditure and income reported in the accounts of Health Authorities, Primary Care Trusts and Special Health Authorities and, for 2000-2001, in all but two cases they gave unqualified regularity opinions.
ISBN: 0102913463 [Buy from TSO]
HC: 766 2001-2002