Statement from the PAC Chair on NAO report: Securing the future financial sustainability of the NHS

It is shocking that over the past year alone the amount the Department for Health has had to spend on bailing out trusts in financial difficulty rose by 333 per cent; up from £76 million in 2011-12 to £253 million in 2011-12. Two Trusts in particular received significant support; South London Healthcare NHS Trust (£79m) and Barking and Havering and Redbridge University Hospitals NHS Trust (£55m). My concern is for the members of the public who rely on the vital healthcare services in these areas.

There was a total surplus of £2.1 billion last year, but once a trust becomes a foundation trust the Department is unable to claw back any surplus money which it could otherwise use to ensure the delivery of health services.

This report says that there are 31 trusts in deficit but it remains unclear what will happen if a trust goes into administration. If trusts are allowed to go bust, it would be unacceptable for people in poorer communities to suffer from poorer health services as a result, exacerbating the postcode lottery that already exists. My Committee will want officials to tell us what systems are in place to prevent this.

The Department must do more to help struggling organisations make the efficiencies essential to the financial sustainability of the NHS. Half of PCTs are concerned about the long-term financial prospects of their healthcare providers. Action is urgently needed to ensure a viable financial future for a large number of healthcare providers and to maintain public confidence in the ongoing delivery of their local services.

The report is available to read on the National Audit Office website