Comment / The right message?

June was a big month for the reform programme as the Department of Health’s listening exercise came to a close, the NHS Future Forum gave its recommendations for change and the Department produced immediate plans to ‘reform the reforms’. But lost among the barrage of reading material was a potentially damaging proposal to remove the mandatory board status of the chief finance officer from the new clinical commissioning groups.

While the formal consultation exercise may be over, we can only hope the Department is still in listening mode, as this would be a massive retrograde step. It would be wrong at any time, but coming now, when the country faces huge economic challenges and the NHS is tackling its biggest financial test ever, the step is difficult to understand.

The ‘proposal’ – the status is uncertain – comes in the Department’s response to the Commons Health Committee’s report on commissioning. The Department clarifies that each commissioning group must have a governing body (effectively its board), which would include an accountable officer. Each would also have to have a chief financial officer, but would be free to decide ‘whether or not this officer should be a full member of the governing body’.

The HFMA, which plans to raise this issue with the Department, believes most groups would themselves recognise the importance of having the chief finance officer on the board. But allowing flexibility at a local level sends out powerful wrong messages and appears to fly in the face of established good practice and current government guidance.

Even the Treasury’s own Managing public money, the bible for administration of public funds, says: ‘The finance director of a public sector organisation should be a professional finance director [and] have board status equivalent to other board members.’

Finance directors have been mandatory members of NHS boards for more than two decades. For all existing NHS bodies, PCTs, trusts and foundation trusts, boards must include a finance director, even where flexibility is given over other executive team members. It is hard to see why such important new bodies would break with this mould.

Finance directors have become pivotal members of their boards, and for good reason – solid financial foundations and effective control are essential both to the delivery of high-quality services and the stability of an organisation. Implying that financial control and management need not be at the heart of a commissioning group’s leadership team could undermine their potential for success. And it would send out a clear but very damaging message to the organisation and beyond that financial  management is not that important and need not be taken seriously.

This is a dangerous time to change the precedent over finance directors’ board status or to confuse the roles of finance directors and accountable officers. The challenges facing the NHS over the next spending review period and beyond will only be met by joint working between clinicians and finance staff – a point made in last year’s joint statement from the HFMA and Academy of Medical Royal Colleges. That joint working starts from the top – at board level – and continues down through the organisation.

Commissioning groups holding significant budgets represent a big change to the way the NHS operates. They aim to deliver far greater clinical input into the design of patient pathways and use of public money. But to have the best chances of success, they need to be correctly constituted from the outset – and that means a chief finance officer on the governing body.