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NHS faces funding challenges: audit

The NHS has delivered a good financial performance in the last year but there are challenges ahead, according to a new report.

The Audit Commission found most trusts were able to balance their books in 2010/11, although some needed financial help to do so.

Overall, 16 NHS trusts needed £90 million to help them keep on track, while cash was also distributed from underspending primary care trusts to those that had overspent.

Of 276 NHS organisations in England audited for the report, nine (including six in the South East) were in deficit. This means that overall the NHS, excluding foundation trusts, was able to deliver a surplus of £1.5 billion, the same as the previous year.

Nevertheless, one in four (24%) NHS trusts and 12% of primary care trusts (PCTs) received qualified value-for-money conclusions from auditors. This means they had concerns about issues such as weaknesses in financial management and planning, or trusts needing financial support.

The report found the NHS is making good progress in finding billions of pounds in savings as part of the Government's efficiency drive. But some of these are one-off savings, which means organisations face a challenging 12 months ahead to keep finances under control.

The NHS has been asked to save £20 billion by 2015 - an average of £5 billion, or about 5% of budget every year. The Audit Commission warned that progress in the future could be more difficult, especially with no increased funding from central government.

The study said: "Organisations that have, up to now, managed their finances well will find financial pressure increasing. They will need to continue to deliver high-quality services, without the funding growth of the recent past."

A Department of Health spokesman said: "The NHS has performed well in the face of a tough economic climate. But we know the NHS is facing even greater pressures, not least from rising demand and costs.

"That is why we need to modernise the NHS - improving choice for patients to drive up the quality of care and improve patient experience."

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