Hertfordshire: Needless damage to Herts Healthcare

1.00.00pm GMT Thu 21st Dec 2006

Liberal Democrats believe that Treasury meddling has made Hertfordshire's healthcare crisis worse than it need have been. Already struggling with chronic deficits, the county's two acute hospital trusts have been further wounded by financial rules that should never have been applied. This turned measured efforts to improve operating efficiency into a financial frenzy that has not only damaged current healthcare provision but has jeopardised the future.

Last week the NHS Chief Executive published the operating framework for healthcare in England over the next financial year. Prompted by July's specialised Audit Commission report into NHS financing, health bosses are now open about the damage done by the Treasury imposed rules.

Liberal Democrat Councillor Nick Hollinghurst, Spokesman on Adult Care and Health, speaking at a meeting with West Herts Hospital Trust directors, said:

"Applying the harsh cash rules of the Resource Accounting and Budgeting - the so-called RAB - to hospital trusts such as the West Herts and North & East Herts Trusts was unnecessary and possibly illegal.

These rules certainly put pressure on trusts to tidy up their finances, but they then make it more difficult to do so. The RAB system is complicated but it acts a bit like a fine. A trust that overspends in one year obviously has to cut back the next year to come within budget again. However, under RAB their funding is then cut back by the deficit amount. This then forces an immediate payback on top of the budget re-adjustment.

This means they're then hit twice and hard."

While recognising local health bosses had a difficult task already in reducing costs Councillor Hollinghurst, reserved his anger for the Labour Government. He said:

"Imposing these rules on our hospital trusts was a political decision and the intense stresses this produced must have been predicted. It's caused damage to NHS services across Hertfordshire and it wasn't even necessary."

He continued:

"Being faced with cuts like the closure of beds and wards is bad enough but this flawed financial tactic has also cost us our future. The new Hatfield Hospital and Cancer Centre has been cancelled and Hemel Hempstead is to lose its surgical unit."

Councillor Hollinghurst concluded:

"The pity of it is that the NHS has finally recognised the damage and promised to look at relaxing the financial regime next year, giving trusts three years to recover instead of no time at all.

But even, so there's no definite commitment further than 'looking again' - and for Hertfordshire this conversion has come too late."

ENDS

Contact: Cllr Nick Hollinghurst tel: 01442 826579

Notes.

• The NHS Report is entitled "The NHS in England: the Operating Framework for 2007/08". It can be downloaded from the Department of Health website at www.dh.gov.uk .

• The Audit Commission document referred to is a Report to the Secretary of State for Health entitled "Audit Commission Review of the NHS Financial Management and Accounting Regime" and was published in July 2006. It is available from the Audit Commission's web site

www.audit-commission.gov.uk

• The Hertfordshire County Council Health Scrutiny Committee is to meet next on Tuesday 19th December at County Hall