Croydon Council calls for joint review into financial mismanagement at NHS Croydon
CROYDON Council is calling for a joint review into financial mismanagement at NHS Croydon.
An independent report, published last Tuesday, found a culture of "significant deficiencies" in the primary care trust's (PCT) financial controls led to a deficit of £23 million in 2010/11.
Council leader Mike Fisher criticised the investigation for failing to establish who was responsible.
Croydon has now joined other south west London authorities, including Wandsworth and Richmond, in calling for a review of the report.
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The investigation, commissioned by NHS London, exonerates directors and staff responsible for NHS Croydon's finances.
It concludes that "substandard financial processes" and "misplaced confidence" in its financial safeguards led the trust to post a surplus of £5.4m, when it had in fact overspent by at least £22.73m.
Cllr Fisher said he could not accept the conclusion the mismanagement it was "just a systems failure".
He explained: "The loss of control of finances at NHS Croydon was completely unacceptable and we need to make sure there is proper public accountability for what has happened.
"The independent report has established many of the facts but leaves open the question of public accountability for the decisions and actions that were taken or not taken, which allowed the situation to arise.
"Therefore, we think it only right in the circumstances for the boroughs within the South London Partnership to establish a joint scrutiny and overview committee specifically to try and understand how this happened and where the responsibility lies.
"The committee would also review the good progress which would appear to have been made since the terms of financial recovery, to assure ourselves this is real and sustainable."
Cllr Fisher added that it "made sense" to undertake a joint review alongside Richmond, Sutton, Merton, Kingston and Wandsworth because all six PCTs had been affected by the re-allocation of resources following the deficit.
In response to Cllr Fisher's initial criticisms NHS London said: "This report makes it very clear mistakes were made, and that these were due to poor systems and controls which failed to pick up errors made but found that no individuals were entirely at fault."
The investigation could find no evidence of fraud and concluded that all the money had been spent on health services in Croydon.
Last week the Advertiser revealed auditors Ernst & Young were paid £1m to conduct the review which was only commissioned after the Audit Commission, paid £275,000, failed to detect the deficit and gave the accounts a clean bill of health.
Cllr Ravi Govinda, leader of Wandsworth Council, echoed Cllr Fisher's concerns about the lack of accountability.
He said: "It is important for us to ensure all necessary lessons are learned, and that public money is better safeguarded in the future. This needs to be a transparent process and one that involves accountable NHS managers."
Cllr Lord True, leader of Richmond Council, said: "The NHS report describes a process that can only be described as a shambles yet has nothing to say about accountability.
"NHS Croydon was spending money it did not have - and some of it came from financially competent PCTs like Richmond, taking funds which were originally provided for the benefit of our communities.
"What we see is a complete failure of financial management, woefully weak corporate governance and an apparently ineffective external audit.
"I hope a joint scrutiny by the south west London boroughs will expose the proper accountability issues; it is only in this way that lessons can be truly learnt and the public have any confidence their money is in safe hands."
Comments
by RecFan
Monday, June 25 2012, 7:30PM
“NHSExec - Thanks for your summary.”
by NHSExec
Monday, June 25 2012, 7:15PM
“Croydon PCT isn't actually under my remit, but I'd take a guess at some of the causes.
Staffing cost structures in the NHS are largely directed by Union collective bargaining methods. What this means is that more junior staff get strong support and a reasonably decent wage, but senior managers including lower levels of executive levels not getting particuarly good salaries in terms of market rates.
Yes you get headline figures for CEO and the like at Trusts walking away with 100s of thousands of pounds, but a lot of middle to senior managers and executives don't get paid that much compared to private sector jobs.
In addition the level of red tape, mindless rules and regulations and top down "fiddling" by the DoH means managerial oversight is pretty complex.
So not always the best staff, especially in finance (after all as a good finance graduate or accountant you go where the big wages are) mixed with restrictive procedures, red tape and a dominant Union system means these sorts of things are sadly not that much of a surprise to me.
Also for information, anyone feeling sympathy for NHS staff over wage freezes needs to go take a look at AGENDA FOR CHANGE payscale structures. This arrangement places staff in paybands htat they AUTOMATICALLY move up each year. Most bands have around 6 pay points so it means for hte first 6 years in a job you automatically get a pay increase of anywhere between 2% and 5% plus whatever national increase is agreed.
That means that even with a 0% freeze any staff within the first 5 years of a job will get a good pay rise. This means NHS pay budgets go up and up and up, constantly forcing more and more resource into salaries.
Last point that may shock people on pay. If a NHS band 6 changes jobs to another band 6, for example, he is automatically bumped another point up the payscale just because of the job change.
The last Labour government threw money at the NHS, but vast amounts went on wage increases (driven by overly powerful unions), awful technology projects and lost due to red tape madness and a lack of oversight.
The NHS is fantastic in terms of free healthcare to all, but in places it is horribly inefficient and by common agreement from executives at my level "heading for a brick wall" financially in the next 10 years or so due to an ageing population.
It desperately needs to change, but the public and Labour scream blue murder at any hint of change. In the end you will not like where the NHS ends up without reform, which is why despite being at my level in the NHS I pay for private health insurance.”
by RecFan
Monday, June 25 2012, 2:07PM
“If you're there NHSExec could you help out with an explanation for the layman?”