Comment / Club vs country

The two-year planning guidance is exactly what we professionals wanted. NHS finance practitioners have long called for early guidance, more time to plan and the ability to plan for the longer term – giving us the opportunity for greater stability.

So we should be grateful NHS Improvement and NHS England have listened and given us what we called for.

The themes in the planning guidance – two year contracts, earlier planning and a move to a system focus – were the key messages delivered by the national planning workshops facilitated by the HFMA and Future-Focused Finance on behalf of system leaders over the summer.

Those messages have been taken on board. So we should acknowledge that this is a major step forward.

But we also need to understand these changes do not provide a magic solution to the extreme financial challenges facing the service. And some aspects, while desirable in terms of the bigger picture, will create big headaches for finance teams in the short term.

The point of ‘contracts signed and finalised plans’ by 23 December is that, as of January, the service should be focused on delivery.

But getting there almost certainly means heroically long hours and weeks for our departments and changing some of our approaches.

Major issues still need to be worked through. While there are moves in the planning guidance towards system regulation, how can this work in practice?

We now have system wide control totals as well as organisation totals. And movement away from organisational control totals is ‘by application’ only. At the same time, providers must balance in aggregate in both years and the commissioning sector must live within its resource limit. So it is not clear how much flexibility this delivers in practice.

But how do we marry up organisational sovereignty with system governance?

When push comes to shove, how do we avoid forcing organisations to choose between club and country?

The planning guidance forces the issue by creating system-wide risk reserves. Commissioners may be familiar with the requirement to set aside uncommitted funds to support the overall position, but providers will also see 0.5% of local CQUIN funds linked to the achievement of the system control total.

There’s an expectation that all organisations planning sustainability and transformation will act to achieve system goals, not just organisational ones.

There is a huge challenge for the finance function here. The contract deadlines are tight, but the main task is for us to become real system leaders. This will mean changing some adversarial behaviours the regulatory system has required of us.

We must be pragmatic, leaning on contracts only when there are problems. We must be experts in the greater good and system thinking, helping boards make the right decisions.

But central bodies must take the same pragmatic approach to regulation. If organisations are to put the best interests of the system ahead of the organisation, system context must be fully recognised when holding organisations to account.

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