Comment / On the reading list

Many of us will have recently been through the stress of exam results. Perhaps not personally, but we may have shared the nerves with friends, children or other relatives as they waited and received results for GCSEs, A-levels, highers and other exams. 

The focus is exclusively on the grades achieved. This is completely understandable as – rightly or wrongly – the grades are so important in enabling the students concerned to make their next step.

But from a learning perspective, they can be frustrating. Why did a student perform as they did – what went well, what went disastrously? There is no analysis – no performance report – that provides an insight into what the student had understood and got right and where work might still be needed if the goal was understanding the subject rather than simply meeting entry requirements for the next stage.

The Department of Health’s annual report can be treated somewhat similarly. From the media’s, and therefore the public’s, perspective, It is all about the result: in this case, did the Department achieve financial balance – not a given in recent years? 

In reality, we generally know the broad answer before the annual accounts and report hits the streets. Providers’ final figures for 2016/17 (a net deficit of £791m) were published in June. And, although, there was no formal confirmation, NHS England chief executive Simon Stevens used a mid-June conference to reveal that the commissioning sector had delivered its side of a system balance bargain by finishing the year with an underspend of just over £900m. 

The Department’s annual report, published in July, provides final official confirmation that the service crossed the financial line, adding in all technical adjustments and covering the wider departmental group. But unlike a simple pass/fail result card, the annual report does delve into performance, including performance against core standards, and drills into the detailed spending in different areas that underpin the overall financial position.

Okay, the report might in general put a positive spin on the figures, achievements and context within which the NHS is operating. But, nevertheless, there is a wealth of detail on offer. Much of it may not be ‘news-worthy’, but there is a huge amount of information that could be classed as ‘of interest’. 

Accounts clearly have a formal role in governance and holding organisations to account. But with such wide-ranging data on performance – some high level and some detailed – they should surely have a broader audience too.

At a simple level, the accounts should provide an authoritative source for wide ranging NHS financial figures. Various figures get bandied around by commentators for NHS or healthcare spending. Often, these are correct, but you need to know the context – are we talking about revenue and/or capital, gross or net spending, or spending within the NHS or including arm’s length bodies and the Department itself (see Reading the numbers feature)? The report provides some context for all these various figures.

And it is not all spin. The Department acknowledges that ‘the plan to deliver financial balance did not work as well as planned’ with funds earmarked for transformation diverted towards improving the overall position. And the Comptroller and Auditor General’s explanatory report, included within the publication, underlines that the system remains under considerable pressure and is still some way from achieving financial sustainability.

There are progress reports on the DH2020 change programme, aiming to ensure the Department has the right skills to lead the health and care system effectively, while operating with reduced running costs. 

Some 573 staff left the Department through early release or voluntary redundancy. This has helped to increase median earnings as a higher proportion of leavers have been from junior grades. Together with the highest earner in the Department earning less than in 2015/16, the ratio of highest paid director to median earnings has fallen.

Annual accounts are unlikely ever to become general reading matter for the whole population. Despite attempts to improve transparency, you still need a reasonable understanding of finance – and at times accountancy – to get a full understanding
of what the numbers mean. But there has to be a happy medium between the annual accounts being broadly ignored and them becoming a high-street best seller.