 Nearly one if five NHS bodies racked up deficits |
Nearly one in five NHS bodies have failed to balance their books, according to watchdogs the Audit Commission and National Audit Office. And early indications are that the situation is worsening.
Mid Yorkshire Hospitals NHS Trust racked up the largest debt out of more than 600 local NHS bodies in 2003-4.
A look at how it happened.
The Mid Yorkshire Hospitals NHS Trust achieved infamy in the watchdogs' report by topping the NHS deficit league table.
Bosses ran up a �18.6m - �6m more than the second placed trust - and the balance sheet would have been more than �30m in the red without a government bailout.
The problem - like any - did not appear overnight. The warning signs were there the year before in 2002-3 when there was a �2.2m deficit.
By the beginning of the next financial year finance chiefs were ordering �19m of cuts to balance the books.
But by June 2003 it became clear that would not be achieved and an �8.7m deficit was predicted.
Within months - and with a new finance director in post - the prediction had been revised upwards to �34m and soon afterwards the trust's auditor was warning bosses about the situation.
The Department of Health intervened with a �30m support package to be spread over the forthcoming years to stop cuts in services and by the end of the financial year the �18.6m deficit was posted.
Complex
While Health Secretary Patricia Hewitt has clearly pinned the blame on poor financial management within trusts for the problems that are now being encountered across the country, accounts from Mid Yorkshire reveal a more complex picture.
An historic lack of adequate budget-setting clearly played a part, the watchdogs' report said.
But the money pressures were also caused by recruitment and retention problems, which lead to an unhealthy reliance on high-cost agency staff, the trust, which runs three hospitals, told the watchdogs.
And the report revealed pressure to meet the government waiting list target had forced the trust to turn the private sector.
Fifteen months on from the �18.6m deficit, the trust readily accepts its share of the blame, but finance director Tony Waite maintained the trust had now got to grips with the books.
The yearly deficits are on their way down, and bosses have agreed a plan with the Healthcare Commission, the NHS watchdog, to achieve financial balance by 2010.
Mr Waite said: "The trust has a long history of financial problems. The scale of the challenge is now clearly understood and the trust is in control of its finances."
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The scale of the challenge is now clearly understood and the trust is in control of its finances
