Editorial: Sometimes hospitals have to close

Yesterday's report from the Commons Public Accounts Committee paints a disturbing picture of NHS finances, less because of the actual bottom line, than because of the confusion, unaccountability and wide disparities it reveals. Three points should be of particular concern.

A surplus of £2.1bn across the NHS as a whole cloaks the reality that a substantial minority of trusts face acute financial difficulties. And one reason – though not the only one – is the burden of continuing payments for PFI projects. It would appear to be too late for an inquiry into who signed these deals, after what advice and on whose authority, and illegal to revise the contracts retrospectively. So the NHS is stuck with bailing out the trusts that cannot pay.

The second reason for concern is the seemingly ad hoc and inconsistent nature of government bailouts. MPs found no standard procedure to be followed if trusts went into debt, and no transparency in the way such help was provided and reported. Add the lack of real sanction for poor financial management, and this makes a mockery of any claim to sound accounting in the NHS. Nor did MPs find any sign that things would improve once the new commissioning boards were in operation.

The sharp disparities that exist between different trusts are a third reason for concern, but one that may hold part of a solution. PFI enabled trusts to build new facilities at the very time that the tide started to turn against big general hospitals. But people have an often irrational affection for their local hospital, which vote-hungry politicians have done little to discourage. Whenever there is talk of hospital closures or mergers – both of which need to happen – the argument tends to be dominated by claims about cuts. The clinical case for the concentration of expertise, and the management case for the best use of resources, must both be made much more forcefully than they have.