The New NHS Financial Battleground…

I remember one of the first things said to me on my bright-eyed and bushy-tailed first day as an NHS management accountant by someone who will remain nameless for fear of brutal retribution…“This job would be fantastic…if it wasn’t for the budget holders…”

In my naivety, I replied “but isn’t that why we chose the job in the first place?” The connection to the front line of healthcare, the absolute sense that the role we were in was actually making a genuine difference to patient care?

I was greeted with a knowing look and a wistful shake of the head…

Luckily, in my near quarter of a century NHS finance career, I’ve never worked with a budget holder I didn’t like, admire and wholly respect. Through them I gained a huge amount of knowledge about the way in which acute care actually worked, helping me to be better in every role. I certainly wouldn’t trade that time for anything…

But recently, I’ve worked with several organisations where these hugely important relationships – between the management accounts team and the finance business partners, and the budget holders out in the organisation, the service staff responsible for how the funds are actually spent – has become somewhat of a battleground.

Why?

Growing pressure engulfs both sides of the relationship

Not through anyone’s fault of course – every member of staff in the NHS understands the need for absolute financial probity and clarity of understanding of what is driving these often deficit financial positions within individual service lines and even cost centres. It’s more through the growing pressure that is currently engulfing both sides of the financial war being waged across and in the NHS.

Operational staff are expected to not just account for but understand the reason behind every pound spent. Oh, and they’re also expected to predict the future. With one eye on the complex monthly reporting structure and another on the constant ask for ‘finding CIP’ and ‘reducing run-rate’, budget holders find themselves having to know more about their financial position than ever before. And when that financial position is not right, it needs to be fixed immediately.

Whilst management accounts staff face their own challenges – dwindling numbers of bodies are coming into the profession, with shortening deadlines for month end and a sense that they are the ones being asked to fix issues with other systems and non-finance processes that only really manifest themselves in an error-strewn month end position (yes, ESR mis-coding and ever-reducing PO compliance, I’m talking to you). The management accounts team are finding their ability to deal with the growing demand for relatively minor adjustments (in their world), knowledge and time from budget holders is becoming severely hampered due to the external reporting demand from ICBs and an increasing need to deep dive into every single £ in every single cost centre, often through multiple different lenses.

Misaligned expectations

What’s become apparent is that there’s a gulf in expectations from what budget holders expect from their management accounts team and vice versa. The sense that an accountant isn’t doing what they should be to support the services by providing accurate and timely financial information can cause a huge amount of noise in the organisation and create a sense of pressure and frustration for all parties…but is everyone clear exactly what this is?

Faster close is a genuine challenge for all organisations – the date by which each organisation needs to have completed its entire month-end process and submitted its statutory PFR is being made earlier in the monthly calendar from October this year. Is the management accounts team clear on their priorities to the organisation, as well as their budget holders, when it comes to the production of the month end position? And are their budget holders?

The solution…

NHS Shared Business Services are working with a number of clients on making these expectations very clear for all.

Creating a clear set of these expectations is not about giving either team permission to stop doing what they perceive as low value tasks or pushing work onto others…it’s about establishing clear boundaries and understanding around tasks that maximise value for both parties and streamlining those tasks that add little value to either.

The best practice Accountability Framework we’ve co-created with our clients is designed to make sure everyone knows what is expected of them during these often-hectic periods.

Budget holders know that:

• Attendance at important meetings is vital to provide their management accounts teams with explanations for spend;
• They need to address source errors that lead to incorrect cost postings rather than rely on the management accounts team to fix the symptom rather than the cause;
• They are expected to take ownership of both the annual budgets and the ongoing performance against these, including the likely forecast position for the end of the year and asking for and analysing any and all revenant financial data to help manage their services more effectively.

While management accounts teams are similarly aware of exactly what their budget holders need from them, including:

• Giving them sufficient time to review and discuss position statements and specific investigations;
• Providing sufficient detail around key cost components to support and enhance their decision-making;
• Provision of training and supporting documentation (including Standard Operating Processes) to ensure understanding and expectation are supported with guidance and understanding;
• Extending clarity of support outside of the month-end process to cover other interactions, such as business case production and input and CIP partnering.

It is about each team understanding their own lines of accountability and responsibility and what it will take for these to be embedded within ‘business as usual’ (often neglected as something that will just ‘happen’), how the organisation monitors and reports on it and ultimately what the consequences of non-accountability could be in the future.

In Summary

The fact that this hugely important interface across most organisations comes with no rulebook, no handy guide to let everyone know exactly what they should be doing and certainly no real guidance as to what each party should expect from the other means as pressure mounts and timescales get ever shorter, this relationship can become a source of friction.

This level of formality and agreement of ’ways of working’ between finance and operational teams is new to the NHS – it’s always been something which was felt to not really be needed…however for all the reasons just mentioned, its absence is now being keenly felt and to help modernise NHS finance and make it more effective and efficient (ultimately by removing manual, lower value interactions – with the clear understanding that this won’t lead to a reduction in financial grip and control), transparency and understanding are desperately needed to help bring these relationships back onto firmer ground.

I mean this job would be fantastic…if it wasn’t for all the unnecessary stress and frustration that comes with not knowing what everyone should be doing…

I’d love to hear from NHS colleagues on both teams – finance and operational – about their experiences of bridging this divide and making this relationship work. So feel free to contact me at mark.costello8@nhs.net or via LinkedIn here to share your own hard-fought war stories…

This is Mark Costello, ex-NHS Management Accountant and Current NHS Finance Warrior signing off…

This blog was first published by One NHS Finance