THE AUDITOR General has expressed concern about the underlying financial position in four NHS bodies, one of which is Fife, writes Steve Bargeton, political editor.

In his annual review of the NHS in Scotland published today, Mr Robert Black notes that during its financial planning for 2002-03 NHS Fife identified an underlying deficit of £9.6 million spread across Fife NHS board and both local trusts.

Although all three NHS Fife bodies achieved their financial targets, the trusts only did so with the use of £9.6 million of non- recurring funding.

Mr Black said auditors were commissioned by NHS Fife to review the financial monitoring and the recovery planning process of the Fife NHS system.

“They found several aspects of good financial management but they also found scope for improvement,” he said in his report.

NHS Fife was one of three boards and five trusts which gave the Auditor General cause for concern in his annual review. The others were: Lothian University Hospitals NHS Trust, NHS Argyll and Clyde, Grampian University Hospitals NHS Trust, and NHS Fife.

The five trusts which failed to break even were Argyll and Clyde Acute Hospitals, Grampian University Hospitals, Lanarkshire Acute Hospitals, Lomond and Argyll Primary Care and Renfrewshire and Inverclyde Primary Care.

Overall his report ack-nowledges the challenges facing the NHS to improve healthcare and to reorganise its structure and management arrangements.

He said the Executive was providing significant additional investment to help meet these challenges.

Planned expenditure is expected to increase from £6.7 billion in 2002-03 to £8.5 billion in 2005-06 (£7.9 billion at 2002-03 prices) but NHS bodies continue to face persistent cost pressures, particularly from increasing staffing costs and the rising cost of healthcare.

“In my previous report I expressed concern about trusts relying on non- recurring funding to balance their books,” he said.

“Some £266 million of non-recurring funding was generated in 2002-03 and many NHS bodies relied on this source of revenue to achieve financial balance.

“While some of this money was used to fund specific initiatives to develop healthcare services, it is important that NHS bodies do not become too dependent upon non- recurring income as a means of achieving a balanced recurring budget.”

Looking ahead to the formation of single unitary health boards, Mr Black said, “It is important that financial transparency and accountability is maintained in the new unified NHS boards so that the NHS is able to demonstrate the healthcare benefits resulting from the extra funds which are flowing in.”

Auditors also examined arrangements for detecting and preventing fraud and found these to be generally satisfactory during 2002-03.

“However there is a risk of fraud in family health services such as GP, pharmacist and dental services,” said the report.

It has been estimated that patient fraud—claiming exemptions to which they are not entitled—cost the NHS £12.6 million in 2002-03 and practitioner fraud—claims for services or prescriptions which are not valid—could cost between £40 million and £100 million a year.