When is a deficit not a deficit?

Being retired I don’t often meet Health Service managers, but merely snipe at them from the sidelines.  However I met some the other day and sniped face to face about the impossibility of squaring good clinical services with “good” financial management.  I pursued my usual line of “If every acute Trust is in deficit then it’s not the Trusts that are wrong, but the system.”

Well. I was put right on that.  The Trusts you had to worry about, they said, were the Trusts who could not explain their deficits.  In some cases these had sort of appeared out of the blue, and the managers found it most puzzling, but from outside you could see it coming so they had a problem.  “We have a £40m deficit” they said “but it’s not a problem because we know exactly why”.

Oh boy.

I thought that perhaps if I were to go to my bank and say “I have an overdraft of £10,000 but it’s not a problem because I know exactly why” then, adopting this principle, the bank would say “well, that’s all right then”.  Somehow I don’t think that’s very likely.  A deficit is a deficit.  It may be nice to know why it’s there but if it cannot be sorted (or written off) then I for one think that it is a problem.

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