NHS trusts in Scotland are being hampered by the financial requirements imposed on them when they were set up in the early 1990s, a report by leading accountants said yesterday, writes Alan MacDermid, Medical Correspondent.
They conclude that the devolved management of trusts, soon to be merged from 47 to fewer than 30, has worked. But some flaws - particularly the constant need to find ''efficiency savings'' and meet rigid financial targets - have led to frustrations and cuts in service.
The authors, who conducted case studies of three hospital trusts, found that competition scarcely existed outwith the cities which had more than one major provider - ie Glasgow and Edinburgh.
The report, Inside Hospital Trusts, is published by the Research Committee of the Institute of Chartered Accountants of Scotland. The authors are Professor Irvine Lapsley, Ms Sue Llewellyn and Mr Gavin Burnett of the Institute of Public Sector Accounting Research at Edinburgh University. They found that the dominant way in which accounting impacted on the organisation of trusts was in the annual search for efficiency savings.
''These efficiency savings - more appropriately described as cost savings - are set as part of the finding of these hospitals, with a 3% reduction in the budgets in 1996-97. This process, however, has been in place for a decade.
''The cumulative effect of the annual search for such savings in a labour-intensive service is rationalisation, re-organisation and a reduction of services. All the hospital managements included in this study reported on this as a most significant challenge.''
There was competition between hospital trusts at the margins, but the general tendency was for the local health board to act as a monopoly purchaser of services from its main provider unit, which was in effect a monopoly supplier.
Nevertheless researchers observed what they described as ''a new management dynamic''.
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