Comment / Finance to the fore

The NHS faces demands for management cost reductions – but the NHS needs finance professionals like never before.

The unprecedented summer Budget and a revised in-year operating framework (for England) means there will be no let-up in finance departments in the coming months. The new Conservative/Liberal Democrat coalition, with its early emphasis on increasing tax and reducing public spending and Andrew Lansley’s mid-year change of NHS policy, will put finance firmly at the fore for the rest of 2010.

It is concerning, then, that the need for finance staff in commissioners, providers and regional tiers to breathe life into sketchy policy initiatives comes amid a rush to slash management costs.

The media prefers issues to be black and white – it wouldn’t want anything to counter its portrait of legions of worthless pen-pushers draining scarce resources from the hard-pressed frontline. But our skills in finance will be needed like never before. We must fill in the fine detail of a major programme, much of which has to be delivered mid-year, without jeopardising fragile financial control or losing sight of the real goal: major productivity improvement. 

What should we make of the recalibration of English access to care targets? The emphasis on median rather than maximum waits will be applauded by many who point to the clinical illogicality of such targets and the levels of spending on so-called ‘waiting list initiatives’.

But the situation is more complex. Most PCT contracts require the delivery of such maximum access times and have been costed and funded as such. Are these contracts to be reopened and re-negotiated? What of the NHS Constitution right of citizens to a maximum 18-week pathway? How will financial arrangements between NHS bodies be affected by such changes? It’s up to finance professionals to sort out the detail and ensure a technical wheel doesn’t fall off in the process.

Early announcements have offered strong pointers to the government’s direction of travel – abolishing strategic health authorities, a reduced role for PCTs, GP clusters as the key commissioners. There’s also the development of an omnipotent economic regulator (Monitor), prioritisation of transforming community services,  and a wider responsibility for providers following hospital discharge.

Many in finance would support these reforms as getting the right levers for change in the right place. But delivering the detailed mechanics will place more strain on a function that is being actively reduced in number and is central to the productivity quest.

Is it all do-able in the timeframe? At the start of the 1990s, we faced similar challenges. In the middle of a recession, the government introduced new structures, funding and ways of working, including the purchaser-provider split. The national economic gloom meant minimal NHS funding growth and a series of below-inflation settlements. And despite protests to the contrary, major changes had to be delivered by finance departments in less than 12 months. In 1991, the service pulled it off – just.

It is some comfort that many of the senior staff who cut their teeth during this period are finance directors and chief executives today. Managing the service through recession requires a very different skill set to leading in a decade of growth.  

For me, a fledgling finance director in 1991, the counsel of experienced campaigners was invaluable. And I believe the HFMA, in its networking capacity, has a major role to play in supporting our members in similar circumstances through today’s challenges. Let’s get to it.