Over a third of local NHS bodies are failing to get value for money, say auditors

The National Audit Office claims the government is failing to support auditors’ recommendations despite “significant weaknesses” across health service accounts. 

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Local auditors have raised concerns over 38 per cent of local NHS bodies and their ability to offer value for money for taxpayers.

Auditors assessed the financial statements of hundreds of local organisations over the 2017-18 period – including local authorities, police, and fire bodies – before deciding whether to issue “qualified conclusions”, which indicate serious financial inefficiency.

NHS bodies, which include clinical commissioning groups and trusts, received 168 qualifications, up from 130 in 2016-17 – a rise of 29 per cent in a single year.

In response to the figures, head of the NAO Amyas Morse said he was “shocked” by how many qualified reports local bodies were consistently receiving. “A qualification is a judgement that something is seriously wrong, but despite these continued warnings, the number of bodies receiving qualifications is trending upwards.”

“This is not good enough; local bodies need to address their weaknesses, and departments across government should ensure they are challenging local bodies to demonstrate how they are responding.”

After receiving a qualified conclusion from an auditor, local bodies are expected to act on the concerns raised and follow recommendations. However, the National Audit Office (NAO) has expressed concern that there is no formal process to compel local bodies to correct failings found by local auditors. Unless a government department steps in, there is little way of knowing if a particular local body is making any attempt to change.

The NAO also pointed out that local auditors have powers beyond qualified conclusions to highlight finance problems, which include publishing a body’s financial underpeformance in a Public Interest Report or requesting that local organisations submit detailed plans as to how they were going to correct the problem. However, these methods have been underused; just three Public Interest Reports have been issued since April 2015.

Over the 2017-18 period £100bn of public funding went to 442 local NHS bodies; the NAO called the number of NHS bodies failing to deliver value for money “unacceptably high and increasing”. “Let us hear no cries of ‘where were the auditors?’ when things go wrong,” Morse warned. “The answer will be ‘they did the job, but you weren’t listening’.”

Augusta Riddy is a Special Projects Writer at the New Statesman.