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Tenth of CCGs are in financial difficulty

Watchdog refers 24 CCGs and 19 trusts to health secretary

Adrian O'Dowd

Thursday, 24 July 2014

Around a tenth of clinical commissioning groups (CCGs) are in financial difficulties and have been referred to the health secretary by the Audit Commission.

The spending watchdog today published a report Auditing the Accounts 2013/14: NHS Bodies about the timeliness and quality of financial accounts of NHS organisations, their arrangements to secure value for money, and auditors’ use of their statutory reporting powers.

The report says that overall the timeliness and quality of NHS trusts’ financial reporting improved for 2013-14, but there were rising concerns from the commission’s auditors about the financial resilience of around a third of NHS trusts.

There was a significant increase in the numbers of both qualified conclusions on value for money arrangements and statutory reports to health secretary Jeremy Hunt. In their first year, CCGs submitted their accounts on time but experienced some issues with quality.

This year’s report summarises the results of auditors’ work for 2013-14 at 101 NHS trusts (62 acute trusts, 5 ambulance trusts, 19 community trusts and 15 mental health trusts) and 211 CCGs.

At the end of March this year, 98 NHS non-foundation trusts remained in the Commission’s audit regime and were therefore subject to a value for money arrangements conclusion.

The commission referred 24 CCGs (11%) and 19 NHS trusts to the health secretary for 2013-14 relating to the failure to meet their statutory break-even duty.

The referrals were because they had failed to break even and did not have robust enough plans in place to balance the books in coming years.

The 19 trusts referred represented a three-fold increase in the number of NHS trusts being referred to the health secretary compared with the previous year.

All these bodies will now be subject to closer scrutiny.

Although most NHS bodies had put in place proper arrangements for securing value for money, the auditors at 34 NHS trusts (34%) issued a non-standard value for money conclusion relating to concerns about financial resilience. This rose from 26% last year.

Audit Commission’s controller of audit, Marcine Waterman said: “Despite auditors reporting some issues with the quality of financial reporting at CCGs, these new bodies generally performed well for their first year.

“This year auditors are reporting concerns about the financial resilience of a third of NHS trusts compared with a quarter last year.

“This level of reporting is worrying and reflects the increasing risks to the financial sustainability of individual NHS trusts, as they continue to face sizeable financial pressures due to a rising demand for services and the necessary focus on quality of care, whilst balancing the need for continued cost savings.”

A Department of Health spokesperson said: “We understand some trusts are facing financial challenges but by making tough economic decisions we've been able to increase the budget by £12.7billion over the course of this parliament. It is essential that trust CEOs have a tight financial grip and ensure they live within their means.”

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