CIPFA's Iain Murray stresses the crucial role of NHS CFOs in navigating service sustainability, advocating for long-term planning, and ensuring ethical financial management in an article for HSJ:
The NHS is a cornerstone of our public service landscape. It is unique in having both national recognition and identity while sitting at the heart of the local communities it serves. It is a service that most of us rely on at some point in our lives, one we all depend on – and one we all have an opinion about.
The challenges and pressures facing the NHS are well documented, perhaps most starkly in last year’s report by Lord Darzi. Demand is soaring, with persistent bed shortages and long hospital waiting times. In some areas, concerns about patient safety arise. But the problems extend far beyond the front line.
The Public Accounts Committee recently published a report on NHS financial sustainability, highlighting a worrying lack of ambition in prioritising the government’s three shifts: from hospital to community, analogue to digital systems, and treatment to prevention. The report also found that a narrow, short-term approach is threatening the NHS’s financial resilience. To future-proof the NHS organisations, a long-term perspective must be embedded in the development and implementation of the government’s 10-Year Health Plan.
Even amid such monumental challenges, the public expects the NHS to deliver an effective service that provides best value. Put simply, for the NHS to continue delivering the standard of care that people expect, its finances must be managed carefully and ethically. At the heart of its financial sustainability is the role of the chief financial officer.
The financial pressures within the service leave little room for anything but difficult choices. It is against this backdrop that the latest planning guidance was issued at the end of January. After reading the guidance and the accompanying financial documents, I found myself reading them again – and then once more – yet I am still not certain I have fully absorbed it all.
In my experience, the command-and-control nature of NHS financial management has always been a double-edged sword. On one hand, a central mandate provides consistency, enabling better like-for-like comparisons. It also always clears what outcomes the centre is trying to incentivise and what the impact for local bodies will be if these outcomes are or are not delivered.
The flip side of this is that the system is open to gaming, often played at a national scale. This can lead to behaviours and decisions that diverge from what I would consider sound financial management. As the rules grow increasingly complex, the potential for bending – or even breaking – them arises, leaving NHS bodies caught between public and governmental expectations and ever-tightening financial constraints.
Date: 31 March