Someone needs to be held accountable for financial mismanagement in our local NHS
NHS services in Croydon are currently commissioned by Croydon Primary Trust (PCT), though under the Government’s health reforms this will soon be replaced by a Clinical Commissioning Group led by local doctors.
Our PCT has enjoyed a reputation for good financial management - unlike some other PCTs, it didn’t overspend against the budget it was allocated and, as a result, was given responsibility for managing the budget for specialised services across London in addition to services for Croydon residents.
Last year, however, it became apparent that all was not as it seemed. The PCT had reported a surplus of £5.4 million in its 2010/11 accounts but it turns out it actually ran up a deficit of £22.4 million.
On 19th June, NHS London published an independent report into how this mis-reporting happened. It identified the following problems:
• a failure of financial management and control, substandard financial processes and poor quality management reporting, leading to an inaccurate picture being presented to the PCT Board and Senior Management Team;
• limited scrutiny and challenge by the Board and its Audit Committee, who relied too much on assurances from internal and external auditors;
• additional complexity arising from Croydon PCT taking over responsibility for London specialised commissioning;
• a lack of leadership in the finance team when the Finance Director was off sick; and
• significant issues of continuity of leadership and operational management when five south west London PCTs merged in February 2011, one month before the end of the financial year.
The review found no evidence of any fraud - the overspend went on healthcare in Croydon - but that doesn’t make it acceptable. It has had to be paid for by the health service in other parts of south west London. Imagine how we would feel if the tables were turned?
NHS South West London has also put new financial systems, processes and teams in place to make sure this doesn’t happen again.
But one concern remains: the report doesn’t say who was responsible for these errors. It’s a bit like the initial response to the MPs’ expenses scandal - it’s “the system” that was to blame. But that won’t wash. Who was responsible for financial management at the time? Who designed the financial processes? Who wrote the financial reports to the Board? Why wasn’t sufficiently senior cover for the Finance Director brought in when he was off sick? Someone needs to be held to account for over-spending on this scale.
UPDATE I am pleased to see that Croydon Council - along with the other local councils in south west London (Kingston, Merton, Richmond, Sutton and Wandsworth) - share my concern about this lack of those responsible being held to account and are going to establish a joint Overview and Scrutiny Committee to review how this mis-reporting happened and where responsibility lies. I look forward to reading the Committee’s report.