CIPFAs health finance conference news October 6 NHS tariffs promised by Christmas

12 Oct 06
The payment by results tariff and other information needed to create financial plans for 2007/08 will be published before Christmas, according to Richard Douglas, the Department of Health's director general for finance and investment.

13 October 2006

The payment by results tariff and other information needed to create financial plans for 2007/08 will be published before Christmas, according to Richard Douglas, the Department of Health's director general for finance and investment.

He told delegates at the annual CIPFA health finance conference on October 6 that there would be no repeat of the delays and mistakes that marked the run-up to the current financial year.

The tariff for this financial year was published on January 31 but was withdrawn a month later after it was found to contain material errors. Trusts and primary care trusts had to scrap figures based on the original tariff document and could not recalculate them until a corrected form was issued a fortnight before the beginning of the new financial year.

An inquiry into the incident recommended earlier publication of the tariff and greater consultation with the NHS.

'We have got to give you information in a timely fashion and I know we didn't do that this year,' Douglas told the London conference. 'We are committed to getting the information to you no later than Christmas and we will do it in a more transparent way – we are “road testing” the tariff and we won't make the mistakes of last year.'

He added that the health secretary was currently considering the future of resource accounting and budgeting in NHS trusts following this summer's report on NHS finance by former Audit Commission chair Sir Michael Lyons. This said Rab doubly penalised trusts in deficit by making them repay the deficit and taking an equivalent amount from their following year's income. Douglas insisted the report did not call for the total abolition of resource accounting.

It is widely believed that the department will accept the commission's recommendation to set up a buffer fund to cover deficits but Douglas said the suggestion had some drawbacks – it would be created by top-slicing PCT allocations, for example.

'Rab will still apply to the department and Lyons said it was appropriate for PCTs but not consistent with the NHS trust finance regime. It recognised that was not a straightforward thing to fix as there must be some way of managing overspends,' he added.

KPMG team finds £338m of savings at crisis trusts

A private sector turnaround team has identified savings worth more than £338m in 23 of the most financially troubled NHS organisations.

Partners from KPMG, the firm contracted by the Department of Health to provide external support to the NHS bodies with the greatest financial problems, told the health finance conference that many of the trusts they visited had failed to address fundamental areas where savings could be made.

The savings identified – in areas such as procurement of supplies and back-office functions – would wipe out much of last year's aggregate deficit of £500m.

Andrew Hine, KPMG health advisory services partner, added there were opportunities to increase productivity at clinical level.

'In one trust we found inpatients waiting five or six days for an MRI scan and the same amount of time again for the results. It is possible to unlock productivity improvements by understanding where the delays are,' he said.

Alastair Groom, the firm's head of health care, added: 'It's not complicated but it is hard work and it's difficult to do without resources.'

Richard Douglas, the DoH's director general for finance and investment, was confident that the NHS would balance its books by the end of March.

He insisted financial balance had to be achieved this year before the expected squeeze on NHS spending.

'The Home Office has agreed flat real-terms growth for the next Spending Review period while the Treasury will have a 5% reduction. We are not going to get the 7% or 7.5% real terms growth we have seen since 2000,' he said.

Younger GPs 'might shun commissioning role'

Private firms could step in if a new generation of GPs turns its back on commissioning, the conference was told.

Noel Plumridge, author of CIPFA's guide to payment by results, New financial flows in the NHS in England, said the health service was relying on older, mostly male, doctors to lead GP practice-based commissioning. These GPs fondly remembered the fundholding experiment of the 1990s but their younger colleagues might have no interest in commissioning.

'A huge demographic change is taking place. Your GP is more likely to be female and young and increasingly likely to be a south Asian woman. Almost certainly they will be more preoccupied with work-life balance than the previous generation,' he said.

'What if they are not interested in resuming control of rationing? The role of the independent sector then becomes more interesting. In some urban areas of England, supermarkets and pharma companies are interested in setting up primary care chains because there's money in it.'


Did you enjoy this article?