21 April 2011
The government’s shake-up of the NHS is creating huge uncertainty over the accountability of billions of pounds of public money and the future role of finance professionals in the sector, Public Finance has been told.
The problem came under the spotlight recently as the controversial Health and Social Care Bill, which will transfer £60bn of public funds from primary care trusts to new GP consortiums, suffered a series of setbacks.
After months of attacks on the plans, Health Secretary Andrew Lansley launched a ‘listening exercise’ to consult further. The Commons’ health select committee has flagged up a series of practical concerns, including the absence of a finance director from consortiums’ management.
It is unclear when the Bill will resume its passage through Parliament, but many of the changes are already under way. Some 220 GP consortium ‘pathfinders’, covering 90% of the population, have been identified ahead of the April 2013 deadline, while England’s 152 PCTs are merging into 50 clusters to save resources prior to full abolition. This has prompted predictions of concessions in the Bill, rather than major U-turns.
Alan Maynard, professor of health policy at York University, told Public Finance: ‘There’s been a great deal of undue haste without thinking through the governance and financial issues.’
He said the government’s listening exercise was ‘mostly PR’. He expected the Tories to ‘do enough twiddling around [with] the legislation to keep the LibDems in the coalition’.
As the Bill stands, finance officers would be shared locally. Consortiums are required only to have an accountable officer ‘responsible for proper stewardship of public money’, not a chief finance officer. The Department for Health said the NHS Commissioning Board would be able ‘to specify certain requirements… They may decide a chief financial officer would be necessary.’
Independent consultant and former NHS finance director Noel Plumridge told PF that consortiums would need a high calibre of financial leadership, given the sums of public money they would be handling and the scale of savings the NHS was attempting to make.
‘It’s not about a steady hand on the tiller, it’s about driving major change,’ he said, adding that with the coalition aiming for ‘small government’, financial management might well be bought in from external organisations.
He said the £20bn of NHS savings required by 2014/15 were ‘non-negotiable’ and probably a higher strategic priority than structural change.
Plumridge also highlighted concern about the abolition of the Audit Commission, currently responsible for auditing NHS trusts, PCTs and strategic health authorities. ‘With £60bn of public money at stake, unclear accountability processes, growing uncertainty about timing of changes and significant risks during the changeover period, it would be really good to have an Audit Commission or something rather like it overseeing the process,’ he said.
Tom Lewis, assistant policy and technical director at CIPFA, told PF: ‘With a fairly substantial amount of NHS money going through these bodies [GP consortiums] you have got to have an appropriate level of governance… It’s critically important that a qualified chief financial officer must be a full member of the leadership team.’
The Healthcare Financial Management Association said it expected the new configuration to give ‘more opportunities for finance professionals’. According to Chris Calkin, chair of the HFMA policy forum, this would not necessarily be at director level, but in helping consortiums to provide budget reports, business plans, and the evaluation of tenders.
Calkin also warned against the LibDem call for consortiums to opt in when ready. ‘Having several systems running at once with some people opting in and others out makes it incredibly difficult to manage and keep control. From an accounting, finance and management perspective I actually think that would not be conducive to good financial management,’ he said.
