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NHS Audit Commission Warns Possible Financial Collapse In Sussex And Surrey

Medical and surgical services provided by NHS could suffer a big blow if the financial condition in two counties (Surrey and Sussex) failed to improve, warned the Audit Commission.// The prevalence of a weak financial management, in addition to lack of proper response to problems addressed by district auditors have been accounted for the present condition.

The financial deficit faced by primary health care trusts and hospitals is believed to reach £75m by the end of March, if appropriate steps are not taken to manage the crisis. If this were to happen, then payment of wages to workers and settlement of bills to suppliers could be affected.

"I am concerned about the financial position of the Surrey and Sussex health economy. Unless this deficit is effectively addressed, it is likely to impact on services provided to patients. There are an increasing number of organisations in deficit and in some the financial position has got substantially worse", said Helen Thompson, the district auditor.

The hospital trust of Surrey and Sussex lost nearly £30.7m in 2004-05, while Royal West Sussex and Brighton and Sussex university hospital lost £15.5m and £10m respectively. The combined deficit in five other healthcare trusts was £11.3m. Although some improvement is seen in the financial situation of a few trusts, overall the picture is still discouraging.

"Some of the savings programmes in place are extremely ambitious and at high risk of failure due to their scale. Halfway through the current financial year, only 34% of the identified savings plans totalling £149m has been achieved," said Ms Thompson.

Although commission appointed financial consultants have voiced several opinions, the implementation of such measures is unlikely owing to doubts regarding performance culture. Furthermore, the deficit at Queen Elizabeth hospital is anticipated to soar to £100m by 2008-09, in the absence of a Government intervention.

“This is the most immediate risk facing the economy. Organisations need to be clear that continued overspending will generate real cash shortfalls and ultimately threaten both the supply of goods and payroll. We recognise that the financial position differs for individual NHS bodies, with some managing their finances well. However, our report will raise awareness of the health economy position and we encourage all organisations to review the recommendations in view of their own circumstances and devise action plans to address them ", concluded Ms Thmpson.

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