THE full scale of the crisis facing the NHS was laid bare last night by ministers who admitted that up to 50 trusts had lost control of their finances.
Patricia Hewitt, the Health Secretary, “named and shamed” 18 NHS trusts who have plunged into substantial deficit and will now have outside accountants imposed on them to find millions of pounds of savings.
A further 32 organisations will be given additional “advice and management support”, while another 19 needed “drive and focus” to meet their financial targets.
Her comments came as a survey of hospital managers found that more than three quarters of NHS trusts currently in deficit have cut staff, 52 per cent have closed wards while 48 per cent are delaying work, and another 38 per cent have cancelled services or restricted eligibility for services.
Ms Hewitt admitted that it was a “difficult and anxious time” for NHS staff as years of huge financial generosity ended with the health service last year recording its first financial deficit since 1999-2000.
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At £76.4 billion, the NHS budget is now larger than the gross domestic product of 155 members of the United Nations, she said. “It is one of the largest and most complex organisations in the world, and three quarters of trusts have delivered improvements within their budget.”
The NHS Confederation, which represents managers, yesterday gave warning that the financial problems were undermining public confidence.
“It is wrong of the Government to simply blame NHS managers” said Gill Morgan, the confederation’s chief executive.
“The causes of the current problems are deep-rooted and long-term.”
They would never be resolved until politicians allowed NHS managers to “make some painful decisions” — such as closing hospitals or reducing the number of beds.
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“A fixation with buildings is preventing the development of new and imaginative services,” she said.
Andrew Lansley, the Shadow Health Secretary, said: “We warned that ministers had lost financial control and Ms Hewitt’s statement confirms this is the case.
“There are clearly systematic problems because at the same time as resources to the NHS are increasing dramatically, costs have ballooned.
“Instead of the Department of Health blaming trusts, Patricia Hewitt should come to Parliament and make a full statement on the financial prospects for the NHS, for this year and the coming financial year”.
Yesterday she declined to say whether the most recent figures showed any improvement in financial performance.
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Last year she said that halfway through the financial year the NHS was forecasting a total deficit of £620 million, against last year’s £250 million.
Asked to explain how in the midst of plenty the NHS was running out of money, she said that there were a variety of reasons.
“In some cases, it is financial mismanagement. In others, it is inefficiently organised services — such as not doing enough operations as day cases, or keeping people in hospital longer than needed.
“In some areas, there are too many services being provided from too many places. In others, the health community has been overspending for a very long time and taking money from other parts of the NHS to balance their books.
“This is very unfair on underspending areas, which tend to be in the North and the Midlands — they are subsidising NHS services in the South and East.”
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Steve Webb, the Liberal Democrat health spokesman, said: “The Government is not learning from its mistakes. Reforms from the centre created the instability that resulted in these damaging deficits.
“Now the Health Secretary is issuing further rules from Whitehall to try and stop it.The Government must stop trying to micromanage the NHS. More power should be given to local people to direct resources to the needs of their community.”
Yesterday the Health Secretary refused to say where the projected deficit now stood, saying that the situation was being closely monitored.
Publishing a “rulebook” for the NHS for 2006/07, she said that financial good health would be among the priorities for all NHS organisations.
But she emphasised that she was not putting money before medicine.
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“For the next financial year we actually want to move the NHS towards a surplus and we want every part of the NHS to start thinking about how it can build reserves.
“Every organisation ought to be operating on the basis of small reserves” she said.
Many of the deficits have arisen in more affluent areas. One reason is that they tend to have more GPs, and therefore more patients tend to be referred for hospital treatment.
In poorer areas, there were fewer referrals but more emergency admissions, the result of health problems not being treated sooner.