The NHS trust which runs Edgware Community Hospital has been criticised for not controlling its finances properly. COLIN O'TOOLE reports

All is far from well with the Wellhouse Trust.

But the latest round of ward closures, job losses, and accompanying £7 million cost-cutting plan at Edgware Community and Barnet General hospitals has a familiar ring to it.

"Weaknesses were most apparent in the poor quality of the financial information produced... where the absence of adequate financial controls allowed the reports to suggest a more satisfactory position than in fact existed," said a damning sentence in the trust's annual report for 1992/3.

Five years on it was the same story at the trust's board meeting, when it emerged that no individual was even responsible for monitoring the trust's debtors.

A staggering £1.7 million was allowed to go unpaid for six months or more, and no-one put the breaks on the trust's failed strategy of treating patients when they had not been paid for.

Worse still, the trust's chief executive Nigel Beverley admitted that its accounting systems were so bad there was no way of knowing if the current crisis had "bottomed out".

That may explain the inexorable rise of the trust's annual budget deficit which has been put variously at £2.9 million, £4.2 million and £5.6 million.

Yet there is an air of unreality to the current debate. The Wellhouse Trust is not like a normal business. The North Thames region of the NHS Executive admitted that even if a trust failed to resolve its financial problems, hospitals would not be allowed to shut. In such an artificial market, it is all the more important that the financial data used to justify cuts to services is accurate.

There are those who think the trust is being set up, unfairly, for a fall. For evidence they need only point to the vagaries of the NHS's internal market. Even now, ten months into the year, the trust has not agreed a final contract with its main customer, Barnet Health Authority.

Health Secretary Frank Dobson is not just blaming the Wellhouse Trust for the problems at Barnet and Edgware.

"The cash increase for Barnet health authority next year is £6,176,000 and for this winter alone it received more than £1 million, but it really must put its house in order -- even if under the previous government it was a disorderly house," he told the House of Commons.

Health watchdog Barnet Community Health Council has criticised the reactive management style of both the trust and authority and launched legal action to force a consultation on the latest cuts.

"This is a power struggle and the patients are the bargaining chips," said its chairwoman Elizabeth Manero.

"If you just scraped all the money out of the corners of the system and applied it against a set of logical priorities there would be enough money for patients."

Given its scale, there will be no quick fixes for the trust's financial problem. If its teetering PFI deal for the second phase of Barnet General founders, it could even be forced into a merger with neighbouring Chase Farm Hospital, in Enfield, or the Royal Free, in Hampstead,

In the meantime, it must consider Sir Leslie Turnberg's strategic review of health services in London, published this month.

"London probably has fewer beds available to its population that the average and ... further bed closures should not be planned," it said.

Patients will hope that Sir Leslie's political masters will translate his "should not" into a more reassuring "will not".

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